The Australian Energy Regulator (AER) has released draft decisions on the 2024-29 revenue proposals from six Australian energy network companies.
The revenue proposals outline how much money the network businesses intend to recover from consumers over a five year period.
Electricity transmission and distribution network businesses are required to submit revenue proposals to the AER every five years.
The AER’s draft decisions on expected revenues for the 2024-29 period are:
- Ausgrid: $9,619.6 million, or $144.3 million (1.5 per cent) less than proposed
- Endeavour Energy: $5,597.8 million, or $5.6 million (0.1 per cent) less than proposed
- Essential Energy: $6,191.1 million, or $185.7 (3.0 per cent) less than proposed
- Evoenergy: $1,043.7 million, or $34.8 million (3.2 per cent) less than proposed
- Power and Water Corporation: $1,016.4 million, or $74.7 million (6.8 per cent) less than proposed
- TasNetworks: $1,826.0 million, or $111.5 million (6.5 per cent) higher than proposed (distribution); $880.1 million, or $13.2 million (1.5 per cent) higher than proposed (transmission)
The draft decisions follow a consultation and assessment process undertaken by the AER, and come at a challenging time for energy consumers and the sector more broadly.
The AER has sought to balance the need for efficient and prudent investments in new and emerging areas that support the energy transition, while ensuring consumers facing cost-of-living pressures pay no more than necessary for electricity services that meet their current and future needs.
The businesses have proposed expenditure in areas such as improved network resilience to address climate change, the uptake and integration of consumer energy resources (including rooftop solar, batteries and electrical vehicles), and cyber security and digitalisation measures.
The AER has approved proposed expenditures that are well justified and have made reductions to proposed expenditures that require further justification.
Movements in market variables such as interest rates, bond rates and expected inflation are currently acting to increase regulated revenues, and for TasNetworks these have resulted in higher draft decision outcomes than reflected in initial proposals. Updates for these movements are a standard part of the decision making process.
The New South Wales and ACT businesses have also proposed export pricing as part of their tariff arrangements. The AER has approved these proposals which would reward solar users who contribute energy to the grid when it is most needed.
The AER also notes that two of the businesses – Endeavour Energy and Essential Energy – were selected for the early signal pathway under the Better Resets Handbook.
These businesses have met most of the AER’s expectations, as set out in the Handbook. The AER has also accepted the majority of their proposals at the draft determination stage, and commends both businesses for their commitment and participation in this new process which places greater emphasis on genuine consumer engagement to support well-justified revenue proposals.
Next steps
The businesses now have until 30 November 2023 to respond to the respective draft decisions in a revised proposal.
The AER will hold online public forums on the draft decisions in early October:
- 9 October 2023: Ausgrid, Endeavour Energy, Essential Energy (NSW)
- 10 October 2023: TasNetworks (TAS)
- 11 October 2023: Evoenergy (ACT)
- 18 October 2023: Power and Water Corporation (NT)
Interested stakeholders are invited to provide written submissions on the draft decisions and revised proposals by 19 January 2024.
The AER’s final determinations, which will be made by 30 April 2024, will set revenues that will form the basis for charges for the 1 July 2024 to 30 June 2029 period.
