The AER has remade its access arrangement decision for Multinet’s Victorian gas distribution network. The decision has been remade in accordance with orders from the Australian Competition Tribunal (Tribunal).
The AER’s original decision was made on 29 July 2013. Multinet applied for review of the AER's decision to the Australian Competition Tribunal (Tribunal). Multinet sought review of the AER's decision on the following matter:
- The AER's determination of Multinet's opening capital base as at 1 January 2013, specifically, the AER's adoption of the Essential Services Commission's (ESC) capital expenditure (capex) benchmark for 2012.
In July 2013, the parties applied to the Tribunal to make a determination by consent that the matter be remitted to the AER to remake its decision. On 31 July, the Tribunal made its determination and directed the AER to calculate the opening capital base by reference to conforming capital expenditure made by Multinet in 2012.
The AER’s remade decision will increase Multinet’s opening capital base for 2013 by approximately $30 million. This accounts for the difference between the AER’s original approach of using the ESC’s benchmark capex to adjust the capital base and Multinet’s actual capex for 2012. Under the AER’s original decision, Multinet would have been entitled to collect additional revenue during the 2018–22 regulatory period to account for this difference. The remade decision has brought this adjustment forward to the current regulatory period (2013–17).
The AER’s decision will result in average reference service distribution charges that are 3.2 per cent higher than average reference service charges per GJ for the 2008–12 access arrangement period. Over the entire access arrangement, a typical residential gas bill could be expected to increase by up to $3 or 0.3 per cent on average each year. Multinet’s revised proposal would have resulted in an average increase of $9 or 0.8 per cent each year.