The Australian Competition Tribunal has this morning handed down its decisions on the limited merits review of the Australian Energy Regulator's April and June 2015 electricity and gas revenue decisions in New South Wales and the Australian Capital Territory.
These appeals were brought by the NSW and ACT electricity and gas distribution network businesses seeking greater revenue to be recovered from customers through electricity and gas bills. The Public Interest Advocacy Centre (PIAC) also appealed the AER’s decisions seeking lower revenues to be recovered from customers.
The Tribunal has largely endorsed the AER’s approach in terms of equity, but accepted some aspects of the appeals, notably in the areas of debt and the methodology to determine operating expenses.
AER Chair Paula Conboy said the AER has not yet had a chance to review the Tribunal’s decision in full, so at this stage it is too early to estimate the impact of the Tribunal’s decision on consumer bills.
“The Tribunal found we were correct to conclude that the electricity distribution businesses in NSW and the ACT were not operating as efficiently as other networks, so consumers were paying more than necessary for safe and reliable electricity and gas,” Ms Conboy said.
“Our April decisions did not accept the revenue proposals put forward by these businesses. Instead the AER determined how much revenue the businesses should be allowed to recover from consumers based on its assessment of the costs for an efficient network business to provide a safe and reliable service to customers.”
“The AER’s aim continues to be setting network revenues in the long term interests of consumers as required under the National Electricity Law. With that aim in mind, we are now looking at the Tribunal’s decisions in these large and complex revenue determinations to identify what happens next,” Ms Conboy said.
“We are considering the implications the Tribunal’s decisions will have both for the revenue that the businesses will be allowed to recover from consumers in NSW and ACT, and the prices those consumers will have to pay, as well as our processes for future determinations.”
Further information on the AER’s original decisions can be found at www.aer.gov.au.