The AER is required to determine the revenue allowance for AusNet Services under the National Electricity Rules. The first step in developing the revenue allowance for the next regulatory control period is to develop a Framework & Approach (F&A) paper for AusNet Services. The F&A sets out which incentive schemes are to apply to AusNet Services and our approach to expenditure forecasting and depreciation for the next regulatory control period, which will commence in 2017. We have published our final decision on the F&A and it is available for download.
AusNet Services raised two issues for consideration in conjunction with the F&A process:
- Length of the regulatory control period (AusNet proposed that the period should be longer than 5 years); and
- Application of the ex post review of capital expenditure to the current regulatory control period (AusNet proposed this review be deferred).
One submission was received in the consultation period, from AusNet Services. We have taken their submission into account in making our decision.
The length of the next regulatory control position has not been decided. Under the NER it is not a matter we can decide in the F&A process. The period must be decided in response to a regulatory proposal. AusNet Services will make a further submission when it lodges its regulatory proposal for the next regulatory control period in October 2015.
We have decided we will conduct the ex post review of any over expenditure of the capital allowance. This is because the review is a requirement under schedule 6A.2.2 of the NER if an over expenditure occurs. AusNet Services has advised that on current projections, an over expenditure is unlikely to occur. If so, an ex post review would not be required.