The AER released the 2024 annual benchmarking reports for distribution and transmission on 26 November 2024.
In this year’s distribution report we finalised implementation of our approach to addressing differences in capitalisation between network service providers. Given this, the results in this report are not directly comparable with those in previous reports (other than the 2023 Annual Benchmarking Report, which contained initial implementation of our approach).
We have also released ‘easy to read’ Fact Sheets that summarise what benchmarking is, how we use it, and some of the key results from the 2024 annual benchmarking reports for distribution and transmission.
The AER’s 2024 annual benchmarking reports are supported by two expert reports from Quantonomics.
In addition, the AER engaged the University of Queensland’s Centre for Efficiency and Productivity Analysis (CEPA) this year to conduct an independent review. This was in relation to the non-reliability output weights used in the Total Factor Productivity (TFP) and Multilateral Total Factor Productivity (MTFP) models in the annual benchmarking reports. The findings of CEPA’s review are outlined in its final report.
Our distribution benchmarking reports include productivity results from econometric opex cost function models. As a part of incrementally refining elements of the benchmarking methodology, we are continuing to examine options to improve the performance of these models and address some technical issues. Quantonomics has prepared a memorandum for this purpose that we are initiating consultation on. Section 8.3 of the distribution benchmarking report also provides an overview of the issues.
We invite network businesses, energy consumers and other interested parties to make submissions on the memorandum by Friday, 28 February 2025.
Submissions should be emailed to: %20AERInquiry
aer [dot] gov [dot] au (AERInquiry[at]aer[dot]gov[dot]au) (Attention: Networks Benchmarking Team).
We prefer that all submissions be publicly available to facilitate an informed and transparent consultative process. We will treat submissions as public documents unless otherwise requested. All non-confidential submissions will be placed on the AER's website. For further information regarding the AER's use and disclosure of information provided to it, see the ACCC/AER Information Policy.
We request parties wishing to submit confidential information:
The underlying data and calculations used in the AER’s 2024 annual benchmarking reports is also made available.
Under the National Electricity Rules, the AER must consult with network service providers in the development of performance reports and we may also consult with other stakeholders who we consider have an interest in the relevant performance report. We received the following submissions from electricity network service providers and other industry stakeholders in the development of the 2024 annual benchmarking reports.
In addition, the AER also received the following submissions during the process of the independent review of the non-reliability output weights undertaken by the University of Queensland’s CEPA.