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Submission to the AER Draft Determination and EQ revised proposals

We appreciate the opportunity to respond to the Australian Energy Regulator’s (AER) consultation on its Draft Decision for Energex and Ergon Energy and Energy Queensland’s revised revenue proposals for Energex and Ergon Energy for 2020-2025.

At this stage, the revised proposals for both Energex and Ergon Energy are considered by Energy Consumers Australia to be not capable of acceptance by the AER.

In forming our view, we note that Energy Queensland’s revised proposals include very last-minute and significant changes in approach and redacted material being made available but with little time for consideration.

We see our role in network revenue determination processes as providing assurance to the community that the projects being proposed and the costs of these projects will meet consumer needs for affordable, reliable, safe and secure energy services.

Advice to us from Dynamic Analysis is that:

• For Energex, there is an evidence gap of $180 million of which $165 million relates to incentive rewards re-included in the revised proposal and $15 million relates to the revenue effect of the capital program.

• For Ergon, there is an evidence gap of $310 million of which $240 million relates to incentive rewards re-included in the revised proposal and $70 million relates to the revenue effect of the capital program.

In the circumstances, we are not able to assure the community at a level that meets our standards that the outcomes proposed are in their interests.

The full submission can be read here.

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