Issue date
AER reference
AC 152/08

The Australian Energy Regulator (AER) is responsible for the economic regulation of electricity transmission and distribution networks in the national electricity market (NEM). The AER is also responsible for the regulation of gas transmission and distribution networks under the national gas law in all jurisdictions except Western Australia.

The AER is currently considering approaches to best manage the assessment of a number of regulatory proposals from regulated electricity and gas distribution businesses that are due to be submitted to the AER in 2009. The AER expects to receive regulatory proposals from the following businesses:

Electricity distribution businesses

  • Queensland – Energex and Ergon Energy – due 31 May 2009
  • South Australia – ETSA Utilities – due 31 May 2009
  • Victoria – Jemena, CitiPower, Powercor, SP AusNet and United Energy – due 30 November 2009

Gas distribution businesses

  • Australian Capital Territory – ActewAGL – due 30 June 2009
  • New South Wales – Jemena (formerly Alinta) and Country Energy – due 30 June 2009

The AER is seeking expressions of interest from suitably qualified consultants to provide services to the AER in relation to its upcoming assessment of the regulatory proposals listed above. In particular, expressions of interest are sought from consultants who could provide technical advice to the AER with regard to the forecasts of capital expenditure (capex) and operating and maintenance expenditure (opex) in the regulatory proposals from one or more of the distributors listed above.

The AER is required to establish that the capex and opex forecasts of the electricity distribution businesses comply with the requirements of the National Electricity Law and the National Electricity Rules (NER), particularly Chapter 6 of the NER. The consultant(s) would be primarily concerned with providing technical advice regarding the efficiency and prudence of capex and opex forecasts proposed by the distributors. The AER takes into consideration its consultants views in making its assessments under the rules.

Similarly, in relation to gas distribution businesses, the consultant would be required to provide advice that would be considered by the AER in determining the compliance of the distributors’ proposals with Part 9 of the National Gas Rules, which deals with price and revenue regulation. In particular, section 79 sets out the criteria for assessing capex and section 91 sets out the criteria governing opex.

The AER’s determinations are subject to merits review by the Australian Competition Tribunal and judicial review in the Federal Court. The consultant’s analysis and reports must be produced at a standard that is commensurate with this context.

Expressions of interest are sought by 12 December 2008 and can be emailed to Helen [dot] Ritsonataer [dot] gov [dot] au (Helen[dot]Ritson[at]aer[dot]gov[dot]au).

Inquiries regarding this call for expressions of interest should be directed to Scott Haig in relation to Queensland electricity distribution networks on (02) 6243 1207. Adam Petersen in relation to South Australian electricity distribution network on (08) 8213 3458, Darren Kearny in relation to Victorian distribution networks on (03) 9663 1966 and John Bastick in relation to the gas distribution networks on (02) 6243 1364.

Disclaimer: The Commonwealth is not committed contractually in any way to those parties registering a preliminary expression of interest. This request does not commit or otherwise oblige the Commonwealth to proceed with any part of the requirement described herein.