AER focus on efficient spending for Evoenergy

Ensuring ACT consumers pay no more than needed for infrastructure improvements is the key driver of the Australian Energy Regulator’s (AER) 2019-24 draft revenue determination for Evoenergy.

AER board member Jim Cox said that the AER has struck the right balance between cost and ensuring reliability by investing in the network, reflecting stakeholder views that this is a key priority for Evoenergy’s consumers.

“At a time when energy affordability is a key concern for all households, the AER has worked with Evoenergy and a wide range of stakeholders to make a determination that focuses on the efficient use of consumer’s money.

“We have taken Evoenergy’s proposals and rigorously tested them to determine efficient spending – spending that will ultimately be recovered from consumers. We’ve consulted with those consumers as much as possible, to help ensure that their money is spent where it is actually needed,” said Mr Cox.

The draft decision allows Evoenergy to recover $871.5 million ($nominal), which is a reduction of $80.3 million, or 8.4 per cent, from its proposal.

If this draft decision is implemented without amendment, the AER expects distribution network tariffs will make up about 25 per cent of the total retail bill Evoenergy’s customers pay.

This will mean, over the 2019–24 period, Evoenergy’s average distribution network tariff would rise 12.2 per cent in total, which will see a three per cent rise in annual household and small business electricity bills.

Mr. Cox said the AER needed to see further evidence from Evoenergy regarding some of its proposed spending to ensure consumers are getting value for money. This draft decision does account of Evoenergy’s increased responsibility for vegetation management.

“In many respects we agree with Evoenergy on the key drivers influencing its revenue requirements. However, a few areas remain in which we need further information before we accept their spending proposals, especially on capital expenditure,” he said.

Evoenergy will now have the opportunity to submit a revised proposal in response to this draft decision by 29 November 2018. The AER will issue its final determination by 30 April 2019.

Submissions from interested stakeholders on both this draft decision and the revised proposal are welcomed by 11 January 2018.

Issued date: 
27 September 2018
AER reference: 
NR 30/18
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