Values of customer reliability

Sector: 
Status: 
Date completed: 
16 September 2020
Date initiated: 
19 October 2018
Effective date: 
31 December 2019
Contact: 
General enquiries - Values of Customer Reliability vcr@aer.gov.au
AER reference: 
PRJ1003080

Overview

On 18 December 2019 we released our final decision on the Values of Customer Reliability (VCR) review, setting out the VCR values for unplanned outages of up to 12 hours in duration (i.e. standard outages) for the National Electricity Market and the Northern Territory. This is the largest VCR study ever conducted in Australia with over 9 000 residential, small business and industrial energy customers completing the survey.

On 23 March 20 we published a draft model developed with ACIL Allen to estimate the costs of Widespread and Long Duration Outages (WALDO) for stakeholder consultation. As a result of this feedback we have decided to discontinue the WALDO model and methodology, but are considering avenues for future work, such as AER led research partnerships with universities. We have published our final conclusions setting out the reasons for our decision, consideration of issues raised, and possible next steps.

Background

The VCR plays an important role in ensuring consumers pay no more than necessary for safe and reliable energy, helping energy businesses identify the right level of investment to deliver reliable energy services to customers.

The AER conducted a review to determine the values different customers place on having a reliable electricity supply, the last review was undertaken in 2014 by the Australian Energy Market Operator (AEMO). Our review updates the methodology AEMO employed to determine VCR to take account of changes in the National Electricity Market since 2014.