The Australian Energy Regulator (AER) has released its Final Service Classification and Asset Exemption Guidelines. The Guidelines take effect on 1 October 2018.
The Service Classification Guideline aims to provide clarity, transparency and predictability for DNSPs, and also to facilitate competition in markets for energy related services. It does this by looking at how the AER classifies distribution services across the National Electricity Market, rather than focusing on one particular jurisdiction or one distributor, which has been the standard approach to classification up until now. This harmonised approach will provide clarity for stakeholders.
The Restricted Asset Exemption Guideline aims to provide a robust, transparent process for assessing distributor applications for permission to recover revenue for restricted assets. Restricted assets are devices that sit on the customer side of the connection point and cannot be included in the regulated asset base to be recovered by all customers. However, networks can apply to the AER for an exemption to this restriction if they can show there is no detriment to competition or if benefits to customers outweigh any detriments. Examples of restricted assets are behind-the-meter battery storage and solar panels. Network devices (devices which monitor, operate or control the network and do not generate electricity) are not restricted assets and do not require an exemption.