The AER today published its determination on AusNet Services' cost pass through application to recover costs related to the Victorian Emergency Backstop Mechanism (VEBM).
Our decision is to approve a positive pass through amount of $17.2 million (nominal, smoothed). This is a decrease of $0.4 million (nominal, smoothed) from AusNet Services' proposed pass through amount. AusNet Services will be able to recover this amount in the 2025–26 regulatory year.
Our review of AusNet Services’ application found that the introduction of the VEBM in Victoria met the definition of a service standard event under the National Electricity Rules, and that AusNet Services has incurred materially higher costs as a result of the event. While we found that the majority of AusNet Services’ proposed costs were reasonable, some of the proposed new systems costs were not necessarily required to comply with the VEBM obligations and have not been included in our approved pass through amount.
The average annual bill impact will be approximately $14 (nominal) for residential customers in the 2025–26 regulatory year.
We expect to make determinations in relation to the Powercor, United Energy and Jemena distribution networks’ VEBM cost pass through applications shortly.
Background
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 AEMO in a minimum system load event to maintain whole of system security.
The National Electricity Rules recognise that distribution and transmission network service providers may apply to adjust allowed revenues within a regulatory period to account for changes in costs incurred during a regulatory control period if predefined events occur. Our role is to determine whether a positive or negative 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.