The AER has published its determination on AusNet Services' application to pass through costs incurred to rebuild transmission towers following the February 2024 storm in Victoria.
The AER’s decision is to approve a cost pass through amount of $2.5 million ($nominal). This will allow AusNet Services to recover this amount through network charges in the 2026–27 year.
The AER has determined that the February 2024 storm met the definition of a natural disaster pass through event, and that AusNet Services incurred materially higher costs as a result.
The increased costs incurred by AusNet Services include capital and operating expenditure required to restore transmission services and replace collapsed towers on the Moorabool to Sydenham 500kV lines, which we consider to be prudent and efficient in the circumstances. However, we have excluded a portion of identified labour costs that we are not satisfied are incremental and solely incurred as a result of the event, reducing the pass through amount by $0.1 million ($nominal).
Our review also took into account the findings of technical investigations conducted by Energy Safe Victoria and the Australian Energy Market Operator. Based on our assessment, we are satisfied that AusNet Services did not do, or fail to do, anything that contributed to the occurrence of the pass through event or the magnitude of costs incurred.
On average, the estimated annual bill impact of this cost pass through for residential customers in Victoria is an increase of less than $1 in 2026–27.
Background
Victoria experienced a severe storm with damaging winds on 13 February 2024, which resulted in the collapse of six towers on the Moorabool to Sydenham 500kV transmission lines near Anakie, southwest of Melbourne. This resulted in the loss of the Moorabool to Sydenham 500kV No. 1 and No. 2 lines, which impacted the operation of the National Electricity Market (NEM). These two circuits are crucial to the operation of the NEM, as they form part of the network supplying the stations going to the southwest of Victoria, which connects the NEM to South Australia.
Under the National Electricity Rules, the AER is required to assess cost pass through applications in relation to natural disaster events. The AER's role is to determine whether a positive or negative change event has occurred, and if so to determine the amount of prudent and efficient costs that should be passed through, to ensure consumers pay no more than necessary.