Under the National Electricity Rules and Gas Access Arrangements, the Australian Energy Regulator (AER) is required to assess cost pass through event applications from Network Service Providers.
These applications, if approved by the AER, allow a Network Service Provider to recover material costs incurred from the event that are above the provider’s insurance policy limit or coverage.
Network operators face changing liability insurance market conditions. The AER’s final guidance note, released today, provides the industry and consumers with greater clarity on the principles we will use, and the evidence we will require, to guide and inform our decision making when assessing an insurance coverage pass through event application.
Network service providers are encouraged to use the guideline when making any application.
The final guidance note takes into account the feedback we received from the 18 submissions in response to our consultation paper and draft guidance note.