In December 2019, we released our Values of Customer Reliability (VCR) review that used survey techniques to estimate the dollar value customers in the National Electricity Market and Northern Territory place on energy reliability under localised outages lasting up to 12 hours.

Our final VCR methodology, published in November 2019, also included the use of modelling techniques combined with other approaches to estimate how much value customers in the National Electricity Market place on energy reliability under longer and widespread outages. We have looked to implement this aspect of the VCR methodology through the development of a draft model with ACIL Allen.

On 23 March 2020 we published the draft model developed with ACIL Allen to estimate the costs of Widespread and Long Duration Outages (WALDO) for stakeholder consultation. For the purpose of this modelling, WALDOs are considered severe outages ranging from 1 to 15 GWh of unserved energy, which can include long periods without electricity and impact large geographical regions.

Our accompanying consultation paper sought stakeholder views on a number of matters including:

• the scope of outages to be included in the model
• the assumptions and settings present in estimating the additional costs of widespread outages
• the assumptions and settings present in estimating social costs
• the results of the modelling.

Submissions on our consultation paper closed on 5 June 2020.

As a result of stakeholder feedback we have decided to discontinue the WALDO model and methodology, but are considering avenues for future work, such as AER led research partnerships with universities. We have published a our conclusions; setting out the reasons for our decision, consideration of issues raised, and possible next steps.