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Endeavour Energy Regulatory proposal 2019-24: Submission to the AER Issues Paper

Energy Consumers Australia considers that the long-term interests of consumers are served when current and future consumers pay no more than they need to for the services they prefer. We are looking to Endeavour Energy to adopt long-term strategies, and revenue proposals that align the interests of their shareholder with the interests of their customers. It is time that we move on from the adversarial processes of the past and move the consideration of these revenue proposals from the courts to the boardroom.

We appreciate the opportunity provided by the Australian Energy Regulator (AER) to respond to the Issues Paper. In this submission we are responding to the revenue proposal submitted by Endeavour Energy and the associated issues raised by the AER in its Issues Paper on the NSW electricity distribution determinations 2019-24.

We understand that the final outcome for consumers of Endeavour Energy’s 2019-24 proposal, when combined with the return of revenue to consumers from the remaking of the 2014-9 decisions by the AER, is expected to be decreases in real terms in average annual network prices for households and small businesses.

However, in our view there remain issues with the Endeavour Energy proposal, which means that the proposal as submitted is not yet able to be accepted by the AER, in making its Draft Decision.

In our view capital expenditure remains too high, largely due to expenditure on the replacement of assets ($800.5 million) and the change in approach to capital contributions ($309 million).

Further, we expect that the application of the 2018 Rate of Return Guideline (which is currently under review) could put further downward pressure on network prices charged by Endeavour Energy.

The full submission can be read here.

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