Costs to replace power lines and supporting infrastructure destroyed in eastern Victoria during the 2019-20 bushfire season have been approved by the Australian Energy Regulator (AER) through AusNet Services’ cost pass through application.
AER Chair Clare Savage said that while the regulator does not develop or propose the spending required to repair infrastructure, the regulator has a vital role in ensuring consumers do not pay more than required for the works.
“These devastating fires had a significant impact on local communities and their supporting electricity and gas infrastructure.
“It is consumers who ultimately foot the bill to replace and repair infrastructure damaged in bushfires and we carefully assess the spending proposals that come in from the energy businesses.
“In making this assessment, we’ve used the principle that consumers should pay no more than necessary for safe and reliable energy,” said Ms Savage.
The AER has approved $20.3 million in expenditure for AusNet to replace infrastructure including poles, cross arms and transformers in eastern Victoria.
The AER has approved the costs to be recovered through the entire 2021-26 regulatory period in order to smooth the bill impact for consumers. This will add in between $2 to $3 more per year to residential household bills over the five year period.
Under the National Electricity Rules (NER) the AER is required to assess cost pass through applications in relation to natural disaster events.
A cost pass through allows network businesses to recover its efficient costs associated with natural disasters such as bushfires that are not accounted for in its current revenue determination.
The AER is currently assessing or awaiting other cost pass through applications resulting from the 2019-20 bushfires from:
- Essential Energy
- Endeavour Energy
About the AER
The AER works to make all Australian energy consumers better off, now and in the future.
- We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
- We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
- We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland.
- We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.