Review of the VIC electricity distribution determinations by the Australian Competition Tribunal

Dear Sir/Madam

Application for review

I am writing to inform you that the distribution determinations made by the AER in October 2010 relating to electricity distribution networks owned/operated by United Energy Distribution Pty Limited (UED), SPI Electricity Pty Ltd (SPI), CitiPower Pty Ltd (CitiPower), Powercor Australia Limited (Powercor) and Jemena Electricity Networks (Vic) Ltd (JEN) are the subject of applications for leave to review in the Australian Competition Tribunal (Tribunal).

UED, SPI, CitiPower, Powercor and JEN each seek review of the AER's decisions on alleged grounds of material errors of fact, incorrect exercise of discretions and unreasonable decision-making in relation to various aspects of the decisions.

All five distributors allege (or seek to allege) grounds of review regarding aspects of the conclusions reached by the AER on the debt risk premium, value of imputation credits (gamma) and the indexation of their respective regulatory asset bases.

In addition, there are a number of other aspects of particular distribution determinations that are the subject of alleged grounds of review:

• UED, CitiPower, Powercor and JEN allege grounds of review of various aspects of the AER’s conclusions on their respective operating expenditure forecasts and allowances.
• CitiPower and Powercor allege grounds of review of aspects of the AER’s conclusions as to nominated events subject to cost pass through arrangements (specifically, in relation to measures resulting from recommendations of the Victorian Bushfire Royal Commission).
• SPI alleges grounds of review of other aspects of the AER’s conclusions as to cost pass through arrangements.
• UED and Powercor allege grounds of review of the application of pre-existing service incentive and efficiency incentive schemes.
• JEN has sought review of an aspect of its capital expenditure allowance.
• SPI seeks to amend its application to include certain other matters raised by other distributors that it has not yet specified.

The grounds of review are fully set out in the applications for review, copies of which may be obtained from the Tribunal or by contacting the Applicants directly.

Notice to potential interveners

Pursuant to directions made by the Tribunal on 1 December 2010 (copy attached), the AER is required to provide notice to interested parties about the applications for review made by UED, SPI, CitiPower, Powercor and JEN.

The AER hereby advises you that interested parties (other than the Victorian Minister) are required to file any applications for leave to intervene with the Tribunal by 4.00pm on 15 December 2010. Copies of the application must also be provided to UED, SPI, CitiPower, Powercor and JEN and to the AER by the same date.

The National Electricity (Victoria) Law allows certain individuals or bodies, with the leave of the Tribunal, to intervene in an application for review. If leave is granted an intervener is permitted to provide written submissions and, at the final hearing, may be permitted to address the Tribunal orally on specific points.

If you are interested in intervening in any of the matters before the Tribunal please contact the Australian Competition Tribunal to notify it of your interest and to find out more about the procedure.

The Principal Office of the Tribunal is located within the Federal Court Registry in Melbourne:

Australian Competition Tribunal
Commonwealth Law Courts
305 William Street
MELBOURNE VIC 3000
Tel: (03) 8600 3505
Fax: (03) 8600 3522

Yours faithfully

Chris Pattas
General Manager
Network Regulation South
Australian Energy Regulator