We are calling for submissions on AusNet Services' cost pass through application relating to distribution network costs incurred as a result of a storm event in Victoria on 13 February 2024. The storm impacted around 25% of AusNet Services' distribution network and resulted in around 255,000 customers being off supply.
AusNet Services incurred total costs of $32.7 million ($2021), including $17.3 million in Guaranteed Service Level payments to affected customers, and $15.4 million for emergency response. This results in a proposed increase to its revenue allowance of approximately $26.5 million ($2021, smoothed). AusNet Services has proposed to recover one third of this amount ($8.8 million) in 2025-26 and the remainder early in the 2026-31 regulatory period.
We invite stakeholders to assist the AER in making our determination by making a submission on AusNet Services' cost pass through application by 19 August 2024. Please refer to the AusNet Services’ storm cost pass though application webpage for instructions on how to make submissions.
On 20 June 2024, AusNet Services' also submitted a separate cost pass through application to the AER relating to transmission network costs resulting from the 13 February 2024 storm event. We are awaiting additional information from AusNet Services on the cost of replacing the six collapsed transmission network towers on the Moorabool to Sydenham 500kV transmission lines before seeking submissions on that application. We will notify stakeholders of this consultation in late 2024 or early 2025.
Background
A cost pass through application allows network businesses to recover its efficient costs, not accounted for in its current revenue determination, associated with natural disasters such as severe storms.
Network service providers are required to make Guaranteed Service Level payments to customers where certain levels of service are not met in accordance with the Electricity Distribution Code and the conditions of AusNet Services' distribution licence. These payments can be recovered under the cost pass through framework as they are a regulatory obligation on AusNet Services.
Our role
Under the National Electricity Rules, the AER is required to assess cost pass through applications in relation to natural disaster events. In making this assessment, the AER uses the principle that consumers should pay no more than necessary for safe and reliable energy.