The AER has received a request from EnergyAustralia dated 11 May 2007 for the revocation and substitution of its revenue cap under clauses 6.2.4(d) and 6.2.4(e) of the National Electricity Rules. EnergyAustralia seeks the correction of material errors which it submits were made in setting its revenue cap, specifically, in estimating its cost of debt. Under clauses 6.2.4(d) and 6.2.4(e) of the Rules, the AER may re-open a revenue cap where there was a material error and where the AER has obtained the consent of parties affected by the re-opening.
While the AEMC has recently promulgated new rules for the regulation of electricity transmission networks (Chapter 6A), clause 11.6.2 provides that Chapter 6 of the Rules, as in force immediately before the commencement of the new rules, continues to apply to an existing revenue cap determination.
Under clause 6.2.4(d)(2) of the Rules, it is necessary to obtain the written consent of affected parties before a revenue cap may be revoked for a material error. The AER's current view (subject to any submissions that may be made to the contrary) is that there was a material error for the purpose of clause 6.2.4(d)(2) of the Rules as a result of the ACCC's failure to take TransGrid's submissions into account in setting EnergyAustralia's revenue cap.
EnergyAustralia has identified two parties that it considers may be affected for the purposes of clause 6.2.4(d)(2) Country Energy and TransGrid. The AER has written to both parties to ask whether they consider themselves to be a party affected by the re-opening of EnergyAustralia's revenue cap for the purposes of clause 6.2.4(d)(2) and, if so, whether they consent to the re-opening. The AER has asked these parties to respond by 29 November 2007.
Attached is a copy of EnergyAustralia's letter to the AER dated 11 May 2007, as well as the text of the letter dated 15 November 2007 sent by the AER to the parties identified by EnergyAustralia as being potentially affect.