The AER is undertaking a review into improving the annual pricing process for electricity distribution network service providers (distributors). The aim of this review is to develop a process to facilitate more timely and accurate annual pricing approvals as well as improve the presentation of pricing outcomes for stakeholders.
The initial phase of this review will be undertaken in two stages:
- Firstly, the AER will consult with distributors to develop a better process for the AER's assessment of pricing proposals, including a formal pre-lodgement engagement process and a standardised pricing model. This stage is expected to be completed in December 2021 to be implemented for the 2022/23 pricing process.
- Secondly, the AER will consult more broadly to further develop the standardised pricing model to improve the transparency and accessibility of the pricing proposals and relevant outcomes. This second stage is likely to also consider the development of standardised templates to be used for the pricing proposal documents. This stage is expected to be completed in December 2022 to be implemented for the 2023/24 pricing process.
The development of these aspects for the annual pricing approval process follows our commitment in the AER Strategic Plan 2020–2025 to design our systems to work in ways that deliver efficient regulation of monopoly infrastructure.
Final position - first stage
On 20 December 2021, we released a final position paper on stage 1 of our annual pricing process review. This paper sets out the outcome of the first stage of our review.
This final position paper is accompanied by a document outlining the formal pre-lodgement engagement process, pricing model and price-capped ACS pricing model templates, and a handbook to accompany the models. These documents and models will be used by the AER and electricity distributors in the upcoming 2022/23 annual pricing process.