The Australian Energy Regulator has today released a final decision not to approve ActewAGL Distribution’s application to pass through to electricity customers a material increase in vegetation management costs.
ActewAGL manages the Australian Capital Territory (ACT) electricity distribution networks and is responsible for ensuring vegetation growth around its network assets is maintained in accordance with vegetation clearance requirements under ACT legislation.
On 1 November 2013, ActewAGL submitted a cost pass through application under clause 6.6.1(c) of the National Electricity Rules. ActewAGL proposed to recover an additional $1.9 million (plus $0.3 million for the time cost of money) for vegetation management costs in 2012-13.
On 4 July 2014, the AER made its final decision. The AER did not approve ActewAGL's vegetation clearance cost pass through application. The AER considers that ActewAGL's pass through application does not meet the criteria of a general nominated pass through event as specified in ActewAGL's distribution determination. This is because the AER is of the view that ActewAGL did not undertake prudent operational risk management which could have prevented or mitigated the effect of the proposed pass through event.