Tribunal confirms AER approach to setting Victorian electricity and ACT gas network prices

The Australian Competition Tribunal has confirmed the Australian Energy Regulator’s (AER) May 2016 revenue decisions for the five Victorian electricity distribution networks and ACT gas distribution pipelines, rejecting all grounds of review sought by the businesses.

The Tribunal’s decisions mean that AER determinations that reduced the revenue that AusNet Services, CitiPower, Jemena, Powercor and United Energy in Victoria and ActewAGL gas in the ACT can recover from consumers will stand.

The Tribunal found that the AER made no error in its approach and rejected the networks’ appeals which sought to increase the revenue they could recover from customers through energy bills – approximately $197 million - on all grounds.

AER Chair Paula Conboy said the Tribunal decision provides the stable regulatory landscape required to make decisions that deliver the best possible value for consumers.

“At a time when energy affordability is a serious concern, it is more important than ever that consumers have the confidence that we are carefully examining all aspects of network costs. This Tribunal decision affirms our decision making in this area.

“Network efficiency is a key driver in making sure that consumers do not foot the bill for unnecessary spending by businesses and will continue to be a key focus in all future AER determinations,” said Ms. Conboy.

The Commonwealth Government’s decision to abolish the Limited Merits Review (LMR) process, effective from June this year – the Senate passed the relevant legislation in October – means that network businesses will no longer be able to bring actions such as these to the Tribunal.

“With the abolition of the LMR process, the AER intends to work more closely with network businesses, consumer groups and other stakeholders to deliver the best possible results for consumers.

 “The AER works to make all Australian energy consumers better off now and in the future. This decision recognises that the AER’s regulation of businesses is founded on sound principles that can continue to deliver value for consumers,” said Ms. Conboy.

About the AER

The Australian Energy Regulator (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 do not set the prices consumers pay.

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.

Issued date: 
31 October 2017
AER reference: 
NR 33/17
AER Media 0466 409 921