Rule Changes: Completed

Participant derogation - NSW DNSPs Revenue Smoothing

Reference:
ERC0210
Proponents:
Ausgrid, Endeavour Energy, Essential Energy
Decision:
Rule made
Amending rule:
2017 No. 6
Commenced:
15-Aug-2017
Amending chapters:
8A
Rule version:
Other rule versions:

Overview

On 1 August 2017, the AEMC published a final rule determination and final rule that allows Ausgrid, Endeavour Energy and Essential Energy (NSW DNSPs) to recover any changes in revenue in the current regulatory control period (2014-19) over the current and subsequent regulatory period. The need for this rule is a result of the outcome of the judicial review proceedings where the Australian Energy Regulator (AER) is required to remake the 2015 distribution determinations.

On 1 August 2017, the AEMC published a final rule determination and final rule that allows Ausgrid, Endeavour Energy and Essential Energy (NSW DNSPs) to recover any changes in revenue in the current regulatory control period (2014-19) over the current and subsequent regulatory period.  The need for this rule is a result of the outcome of the judicial review proceedings where the Australian Energy Regulator (AER) is required to remake the 2015 distribution determinations.

The rule will benefit consumers through minimising price volatility that may occur as a result of the judicial review proceedings. The rule will also allow the NSW DNSPs an opportunity to recover all the revenues they are entitled to for the current regulatory control period in the subsequent regulatory control period (if they are unable to do so in the current period). While the rule is a more preferable rule, it incorporates elements proposed in the rule change request and is designed to achieve the same outcome of minimising price volatility for NSW DNSP customers.

Background

On 26 April 2017, the AEMC published a draft rule determination on the rule change request for consultation.

The AEMC commenced consultation on the rule change request on 17 November 2016. On 9 February 2017 the Commission extended the period of time to make a draft determination on the rule change request to 27 April 2017, under section 107 of the National Electricity Law. The Commission considered the extension to be necessary, in order to provide additional consultation with the proponents and relevant stakeholders on the complex implementation issues related to the participant derogation. 

The rule change request was submitted to the AEMC on 15 July 2016.

The AEMC has also published a final rule determination in response to a similar rule change request (link to ERC0216 webpage here) submitted by ActewAGL.  ActewAGL’s request has sought to address a similar issue that may affect its customers in the Australian Capital Territory.

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Documentation