We are calling for submissions on Powercor’s, United Energy’s and Jemena’s Victorian Emergency Backstop Mechanism (VEBM) cost pass through applications.
The VEBM requires all new and replacement solar systems connected to distribution networks to be able to be remotely interrupted or curtailed when directed by the Australian Energy Market Operator (AEMO) in a minimum system load event to maintain whole of system security.
Total costs expected to be incurred across capital and operating expenditure to comply with the VEBM in the current regulatory period (2021-26) are $19.7 million ($2021) for Powercor, $10.8 million ($2021) for United Energy, and $13.3 million ($2021) for Jemena.
This results in a proposed increase in revenue allowance to commence recovery of these costs in the current regulatory control period of approximately $12.7 million ($2021) for Powercor, $7.1 million ($2021) for United Energy, and $7.8 million ($2021) for Jemena.
We invite stakeholders to assist the AER in making our determination by making submissions on Powercor’s, United Energy’s and Jemena’s cost pass through applications by 31 July 2024. Submissions can be sent electronically to AERInquiry
aer [dot] gov [dot] au (subject: Attention%3A%20Sebastian%20Roberts%2C%20General%20Manager%2C%20Transmission%20and%20Gas%20%E2%80%93%20Submission%20on%20Endeavour%20Energy%27s%20cost%20pass%20though%20application) (AERInquiry[at]aer[dot]gov[dot]au).
Background
A cost pass through application allows network businesses to recover its efficient costs, not accounted for in its current revenue determination, associated with a pass through event. Powercor, United Energy and Jemena have all submitted that the VEBM constitutes a service standard event under the cost pass through provisions of the National Electricity Rules (NER). Our role is to determine whether a positive change event has occurred, and if so to determine the amount of prudent and efficient costs that should be passed through, to ensure consumers pay no more than necessary.