A distributor's cost allocation method (CAM) governs the manner in which the distributor is allowed to allocate costs to the services it provides. Allocation of costs between services is required to accurately represent costs incurred in providing the respective services. This prevents cross-subsidisation between distribution services and other services a distributor provides.
On 17 October 2014, the AER approved the revised CAMs submitted by CitiPower and Powercor in accordance with chapter six of the National Electricity Rules. On 19 December the AER approved the revised CAMs submitted by AusNet Services, Jemena and United Energy. Each revised CAM replaces the previous CAM approved by the AER in 2010. Each of the five Victorian distributors submitted their revised CAM for approval ahead of the upcoming regulatory control period, so its regulatory proposal for the new control period may be prepared accordingly. Regulatory proposals are due in April 2015. Note that except for the Jemena CAM changes which have effect from 1 January 2015, these CAMs will apply from 1 January 2016.