As required by the National Electricity Rules (NER), the AER is preparing to undertake distribution determinations for the Queensland electricity distribution network service providers (DNSPs), Energex and Ergon Energy. In undertaking this role the AER will determine the network charges for the regulatory control period from 1 July 2010 to 30 June 2015.
Queensland DNSPs are currently subject to economic regulation by the Queensland jurisdictional regulator, the Queensland Competition Authority (QCA). The QCA is responsible for administering the distribution determination for the current regulatory period, 1 July 2005 to 30 June 2010.
The NER sets out the general process the AER must follow in making distribution determinations. This process involves the AER publishing a framework and approach paper, receiving a regulatory proposal from each DNSP and undertaking a review of that regulatory proposal to make the AER's distribution determination. The purpose of this notice is to consult with interested parties on the AER's likely approach to certain aspects of the upcoming distribution determinations for Energex and Ergon.
Framework and approach paper
The AER must prepare and publish a framework and approach paper prior to the commencement of every distribution determination. The paper is required to set out the AER's likely approach in a DNSP's determination to such matters as:
- the classification of distribution services
- the control mechanisms to be applied
- the application of a service target performance incentive scheme (STPIS)
- the application of an efficiency benefit sharing scheme (EBSS)
- the application of a demand management incentive scheme (DMIS).
As part of the transition process to the new regulatory arrangements, the framework and approach paper for Energex and Ergon Energy has been split into two stages:
- Framework and approach-classification of services and form of control mechanism
- Framework and approach-application of schemes
Clause 11.16.6 of the NER permitted Energex and Ergon Energy to submit proposals to the AER in relation to the classification of services and control mechanisms to apply for the next regulatory control period by 31 March 2008. This transitional arrangement is unique to Energex and Ergon Energy. The AER has received proposals from Energex and Ergon Energy and the AER is currently consulting upon them through a separate process. The AER must publish its framework and approach paper on these matters by 31 August 2008.
AER releases preliminary positions paper-application of schemes
The release of this preliminary positions paper on 30 June 2008 represents the commencement of the AER's consultation on its likely approach in the application of schemes to Energex and Ergon Energy over the 2010-15 regulatory control period. The paper sets out the AER's preliminary positions on the application of the AER's national EBSS and STPIS, which were released on 26 June 2008. The AER has developed a proposed DMIS for specific application to the Queensland and South Australian DNSPs, for which the proposed scheme and accompanying explanatory statement were released for consultation on 30 June 2008. This preliminary positions paper also sets out the AER's preliminary positions on the application of the DMIS to Energex and Ergon Energy over the 2010-15 regulatory control period.
The AER is required to publish its final framework and approach paper on the application of schemes to Energex and Ergon Energy by 30 November 2008.
Invitation for submissions
Interested parties are invited to provide written submissions on the preliminary positions contained in the paper to the AER by close of business 11 August 2008. The paper and information about the framework and approach process for Energex and Ergon Energy are available at the AER's website, www.aer.gov.au
Submissions can be sent electronically to AERerinquiry
aer [dot] gov [dot] au (AERerinquiry[at]aer[dot]gov[dot]au) or can be sent to:
Mike Buckley
General Manager
Network Regulation North Branch
Australian Energy Regulator
GPO Box 3131
Canberra ACT 2601
To facilitate an informed, transparent and robust consultation process, the AER prefers that all submissions be in an electronic format and publicly available. Accordingly, submissions will be treated as public documents and posted on the AER's website, except and unless prior arrangements are made with the AER to treat the submission, or portions of it, as confidential.
Enquiries about the paper, or about lodging submissions should be directed to the Network Regulation North Branch.