The AER has today published its determination on Ausgrid’s cost pass through application relating to the storm event in January 2025.
Ausgrid applied to pass through $19.6 million ($2024) in costs associated with the January 2025 storm event, comprising $10.3 million in operating expenditure and $9.3 million in capital expenditure. Following an information request from the AER, Ausgrid reduced this amount to $16.1 million.
The AER has determined that the January 2025 storm event does not meet the requirements for a positive change event under the National Electricity Rules (NER). While the January 2025 storm was a natural disaster event, we are not satisfied the efficient incremental costs incurred by Ausgrid due to the event exceed the materiality threshold required for a cost pass through under the NER. As a result, we have not approved a cost pass through amount in relation to this event.
As the AER has not determined an approved pass through amount, there is no impact on network charges or customer bills arising from this determination.
Background
The storm event between 15 and 17 January 2025 caused damage to Ausgrid’s electricity distribution network and resulted in widespread outages across parts of the network, requiring significant restoration activities.
Under the National Electricity Rules, the AER is required to assess cost pass through applications for natural disaster events. The AER’s role is to determine whether a positive change event has occurred and, if so, the prudent and efficient costs that may be passed through to consumers, to ensure customers pay no more than necessary.
A positive change event is a cost pass through event which results in materially higher costs, defined as costs which exceed 1% of the network’s annual revenue requirement for a given year. Network businesses manage the cost of immaterial events within existing revenue allowances.