On 21 August 2017, the AER made a final decision in relation to Powercor's contingent project application. In accordance with the National Electricity Rules and for the purpose of undertaking the contingent project, the AER has determined:
- the amount of capital and incremental operating expenditure for each remaining year of the regulatory period reasonably required for the purpose of undertaking the contingent project;
- the total capital expenditure reasonably required for the purpose of undertaking the contingent project;
- the likely commencement and completion dates for the contingent project; and
- the incremental revenue likely required in each remaining year of the regulatory period as amended by the contingent project.
Background
On 28 March 2017, Powercor 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. Powercor 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 first tranche of REFCL installations and associated works for the following zone substations:
- Camperdown
- Colac
- Castlemaine
- Maryborough
- Winchelsea
- Eaglehawk
The installation of REFCLs will necessitate other capital replacement and upgrade works across the distribution network. Powercor's application seeks funding of expenditure for both REFCL installation and consequent works.
Consultation
The AER called for submissions on the application by 8 May 2017. One submission was received.