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Submission to the AER Preliminary Framework & Approach for AusNet Services Transmission 2022-27

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Energy Consumers Australia

We appreciate the opportunity to respond to the Australian Energy Regulator’s (AER) consultation on its Preliminary Framework and Approach for AusNet Services (Transmission) (AusNet) regulated revenue determination process for 2022-27.

In this submission, we will discuss our observations across electricity revenue determination setting processes and market developments that may have an impact on the application of the incentive regime. Our focus in this submission is on four incentive schemes covered in the Framework and Approach paper:

  1. Service Target Performance Incentive Scheme (STPIS)
  2. Efficiency Benefit Sharing Scheme (EBSS)
  3. Capital Expenditure Sharing Scheme (CESS)
  4. Customer Service Incentive Scheme (CSIS)

We are seeking assurance that these incentives will deliver value for consumers. We have not commented on the demand management incentive scheme/demand management incentive allowance, expenditure forecast assessment guideline or depreciation.

We support the principle of incentive-based regulatory regimes and where justified by performance, investors receiving a share of the rewards of efficiency sharing arrangements. Networks must demonstrate that savings are from true efficiency measures rather than a reward for not delivering projects that were contemplated in regulatory proposals.

The full submission can be read here.

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