The Australian Energy Regulator (AER) today published its determinations on cost pass through applications received from AusNet Services, Jemena, Citipower, Powercor, United Energy, Evoenergy and Energex. These applications related to incremental distribution network costs arising from various recent regulatory changes, as well as Tropical Cyclone Alfred in March 2025.
Flexible Trading Arrangements rule change
The Victorian electricity distribution network service providers (AusNet Services, Jemena, CitiPower, Powercor, United Energy) and Evoenergy submitted cost pass through applications seeking to recover costs arising from the Australian Energy Market Commission's (AEMC’s) Unlocking CER benefits through flexible trading rule change.
The AER’s decision is to approve the following cost pass through amounts, to be recovered in 2026–27:
- AusNet Services – $0.18 million
- Jemena – $1.41 million
- Citipower – $0.89 million
- Powercor – $2.05 million
- United Energy – $3.26 million
- Evoenergy – $1.51 million (to be recovered over 2026-27, 2027-28 and 2028-29).
Other regulatory changes
Jemena separately applied to pass through incremental costs arising from the Australian Energy Market Operator's (AEMO’s) Market Interface Technology Enhancements, the AEMC’s Accelerating smart meter deployment rule change, and the October 2025 Victorian Emergency Backstop Mechanism 2 (VEBM 2) Ministerial Order.
The AER’s decision is to approve the following cost pass through amounts, also to be recovered in 2026–27:
- AEMO’s Market Interface Technology Enhancements – $0.67 million
- Accelerating smart meter deployment – $0.16 million
- VEBM 2 Ministerial Order – $0.74 million.
Natural Disaster Event
Energex submitted a cost pass through application seeking to recover incremental costs incurred due to Tropical Cyclone Alfred. The AER’s decision is to approve a cost pass through amount of $66.1 million. This decision will allow Energex to recover these costs across the 2026-27 and 2027-28 regulatory years.
Background
A cost pass through application allows network businesses to recover efficient costs, not accounted for in current revenue determinations, associated with certain specified events such as changes in regulatory obligations or service standards, and natural disaster events.
Under the National Electricity Rules, the AER is required to assess cost pass through applications from network businesses where such events result in a material change in the cost of providing services. In making our assessments, the AER has regard to relevant factors in the National Electricity Rules and seeks to ensure that consumers pay no more than necessary for safe and reliable energy.