The AER has received a request from TransGrid dated 22 November 2006 for the revocation and substitution of its revenue cap under clauses 6.2.4(d)(2) and 6.2.4(e) of the National Electricity Rules. TransGrid 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)(2) 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. In its letter dated 22 November 2006, TransGrid identified parties that it considers may be affected for the purposes of clause 6.2.4(d)(2). The AER has written to each of these parties to ask whether they consider themselves to be a party affected by the re-opening of TransGrid’s revenue cap for the purposes of cl 6.2.4(d)(2) and, if so, whether they consent to the re-opening. The AER has asked these parties to respond by 20 December 2006.
Attached is a copy of TransGrid's letter to the AER dated 22 November 2006, as well as the text of the letter dated 8 December 2006 sent by the AER to the parties identified by TransGrid as being potentially affected