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AER’s Draft Decision on the Ausgrid 2019 to 2024 Distribution Determination: Submission

We appreciate the opportunity to respond to the Australian Energy Regulator’s (AER) Draft Decision: Ausgrid Distribution Determination 2019-24 (the Draft Decision).

We believe Ausgrid’s revised proposal is capable of acceptance. We have engaged heavily with Ausgrid since the release of the AER’s draft decision, and our view that Ausgrid’s revised proposal is capable of acceptance is based on our position that:

• Ausgrid will apply a productivity factor of no less than one per cent annually from FY21; and
• assessment by the AER that the proposed capital expenditure (capex) is efficient.

Important to our acceptance of the revised proposal are Ausgrid’s broader commitments to us on the transparency of governance processes around investment and expenditure decision making.

Our approach to considering whether Ausgrid’s revised proposal can be considered capable of acceptance, is on a decision-as-a-whole basis. Since the release of the Draft Decision, our
engagement with Ausgrid has focused on:

• reducing capex and improving utilisation of the existing assets;
• building productivity improvements into the business of no less than one per cent per annum
from FY21; and
• demonstrated commitment to more effective consumer engagement.

Ausgrid has amended its proposal to better align with the long-term interests of consumers, including through a better approach to risk management and reductions in planned capex. Together, this improves affordability outcomes for consumers.

The full submission can be read here.

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