The Australian Energy Regulator (AER) has released its determination, made on 19 October 2012, on SPI Electricity Pty Ltd’s (SP AusNet) cost pass through application for the recovery of costs arising from its implementation of certain Victorian Bushfire Royal Commission (VBRC) recommendations.
Under the National Electricity Rules (NER), where a positive change event occurs, a Distribution Network Service Provider (DNSP) may seek the approval of the AER to pass through to electricity customers higher costs associated with meeting new regulatory obligations. The pass through provisions of the NER allows a DNSP to recover additional costs during a regulatory control period, where certain conditions are satisfied. SP AusNet submitted, on 29 July 2012, a pass through application to the AER to recover additional costs arising from Energy Safe Victoria’s decision to accept a Revised Electricity Safety Management Scheme (ESMS) from the business. SP AusNet’s Revised ESMS incorporated two of the VBRC recommendations.
In its application, SP AusNet sought to recover expenditure of $134.2 million ($2012), over the course of the 2011–15 regulatory control period.
The AER has determined that these new regulatory obligations mean a positive pass through event has occurred and has approved additional capital and operating expenditure of $112.3 million ($2012) over the current period. This represents a reduction to SP AusNet’s proposed capital and operating expenditure of $21.9 million ($2012). The total approved pass through amount to be included in distribution charges is $20.2 m ($ nominal) over the period.