AER makes final decision on Jemena gas arrangement

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The Australian Energy Regulator (AER) says households and businesses are the big winners from the Australian Energy Regulator’s (AER) remade final decision on Jemena Gas Networks’ (JGN) 2015-20 access arrangement.

The final decision is consistent with the AER’s January 2019 draft decision allowing JGN to recover $2,246.6 million ($ nominal) from consumers in the access arrangement period.

“We are satisfied this decision is in the long-term interests of consumers and will promote price stability at a time when energy affordability is a key concern for many consumers,” AER Chair Paula Conboy said.

In 2015 JGN proposed to recover $2,605.2 million from consumers over the 2015‑20 access arrangement period, but the AER found that the company could operate safely and reliably with $2,229 million. Legal action followed, resulting in the AER’s 2015 final decision being set aside by the Australian Competition Tribunal.

This final remade decision is $17.6 million above the AER’s set aside 2015 final decision, meaning JGN will return $169 million ($2019-20) to its customers from the commencement of the 2020-25 access arrangement period.

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This decision marks the end of the process in which the AER was required to remake its 2015 revenue decisions for five NSW/ACT electricity and gas distribution businesses – Ausgrid, Essential Energy, Endeavour Energy, Evoenergy and JGN.

“This outcome is a great example of how businesses engaging with consumers in a revenue setting process can benefit everyone, and it’s a process that has been applied successfully in facilitating resolutions in each of our 2015 remitted decisions, which I am pleased to say have now all been resolved,” Ms Conboy said.

“In total, consumers in NSW and ACT will save nearly $6.4 billion as a result of these remade decisions than what the businesses sought to recover in their 2015 final proposals. To their credit, the businesses have transformed their organisations and responded to the revenues largely in line with what we set for them in 2015.”