On 3 October 2019, the AER made a final decision in relation to tranche three of AusNet Services' contingent project application.
We have accepted most of AusNet’s proposal, but we believe that their proposed expenditure for additional capital works at Kalkallo is not cost-effective. Instead, we have approved a lower cost solution to meet the REFCL obligation in this area.
We estimate that this decision will add 60 cents to the amount paid by AusNet’s residential customers, and $1.50 by business customers, for electricity in 2020.
Background
On 31 May 2019, AusNet Services submitted an application to the AER seeking a determination, with respect to the Victorian State regulatory requirement to install Rapid Earth Current Fault Limiters (REFCLs), that funding for a contingent project be approved and their maximum allowed revenue be adjusted in accordance with clause 6.6A.2 of the NER.
On 1 May 2016, the Electricity Safety (Bushfire Mitigation) Amendment Regulations 2016 (Amended Bushfire Mitigation Regulations) came into effect in Victoria. The amended regulations require Victorian distributors to install REFCLs at designated zone substations. The purpose of the REFCL devices is to reduce the risk of a bushfire caused by a fallen powerline. AusNet Services are required to meet a defined quota of zone substations with operational REFCLs by 1 May 2019 with an additional quota to be operational by 1 May 2021 and the remaining designated zone substations fitted with REFCLs by 1 May 2023.
This contingent project application seeks funding for the third (and final) tranche of REFCL installations and associated works for the following zone substations:
- Benalla
- Kalkallo
- Lang Lang
- Mansfield
- Sale
The installation of REFCLs will necessitate other capital replacement and upgrade works across the distribution network. AusNet Services' application seeks funding of expenditure for both REFCL installation and consequent works.
Submissions in response to AusNet Services' contingent project application closed on 26 July 2019.