The Australian Energy Regulator is seeking views on its draft decision on the access arrangement that will apply to Australian Gas Networks’ (AGN) South Australian distribution network from 1 July 2016.
“The AER’s draft decision provides for reductions in revenues below those proposed by AGN. This is because of a lower rate of return and reductions in forecast capital expenditure”, AER Chair Paula Conboy said.
“The AER’s role is to ensure that consumers pay no more than necessary for the safe and reliable delivery of gas by approving the overall revenue that is used to set AGN’s network charges,” Ms. Conboy said.
“This means allowing sufficient revenue for AGN to maintain its existing network, and to meet new growth and augment the network where necessary.”
The AER’s draft decision reflects an improved investment environment with significantly lower interest rates compared to previous years, which translates to lower financing costs necessary to attract efficient investment.
The AER is now seeking feedback from AGN and other stakeholders. The AER will consider AGN’s revised proposal and all stakeholder views before making its final decision April 2016.