Tribunal rejects gas networks’ appeal against AER

The Australian Competition Tribunal has confirmed the Australian Energy Regulator’s (AER) May 2016 revenue decisions for the five Victorian electricity distribution networks and ACT gas distribution pipelines.

The Tribunal’s decisions mean AER determinations that reduced the revenue AusNet Services, CitiPower, Jemena, Powercor and United Energy in Victoria and ActewAGL gas in the ACT can recover from consumers will stand.

The Tribunal found the AER made no error in its approach and rejected the networks’ appeals, which sought to increase the revenue they could recover from customers through energy bills – approximately $197 million – on all grounds.

AER Chair Paula Conboy said the Tribunal decision provides the stable regulatory landscape required to make decisions that deliver the best possible value for consumers.

“At a time when energy affordability is a serious concern, it is more important than ever that consumers have the confidence that we are carefully examining all aspects of network costs,” Ms Conboy said.

“This Tribunal decision affirms our decision making in this area.

“Network efficiency is a key driver in making sure that consumers do not foot the bill for unnecessary spending by businesses and will continue to be a key focus in all future AER determinations.”

The federal government’s decision to abolish the Limited Merits Review (LMR) process, effective from June this year – the Senate passed the relevant legislation in October – means network businesses will no longer be able to bring actions such as these to the Tribunal.

“With the abolition of the LMR process, the AER intends to work more closely with network businesses, consumer groups and other stakeholders to deliver the best possible results for consumers,” Ms Conboy said.

“The AER works to make all Australian energy consumers better off now and in the future.

“This decision recognises that the AER’s regulation of businesses is founded on sound principles that can continue to deliver value for consumers.”