Judgments on appeals against Australian Energy Regulator’s determinations

The Australian Competition Tribunal today published its judgement on several merits reviews of revenue reset decisions made by the Australian Energy Regulator (AER).  These appeals, the most complex of their kind ever seen in Australia, were brought by the Public Interest Advocacy Centre (PIAC) on behalf of electricity consumers, three electricity distributors in New South Wales (NSW), one electricity distributor in the Australian Capital Territory, and one gas pipeline network operator in NSW. Frontier (Australia and Europe, jointly) advised the networks involved in the appeals on all of these issues.

The revenue impact of the errors claimed by the appellants, over the forthcoming regulatory period, totalled in excess of A$8.5 billion. The issues on which review was sought were very wide-ranging.  In terms of revenue impact, the most substantive issues related to the AER’s decisions on the return on equity allowance, the return on debt allowance, the value of imputation credits (for determining the corporation tax allowance) and the AER’s use of benchmarking to determine operating expenditure allowances for the electricity distributors that sought review.

The Tribunal found that the AER had erred in relation to all of these matters, except the return on equity, and has remitted them back to the AER for reconsideration.  The Tribunal did not uphold the appeals brought by PIAC.

Frontier regularly advises companies and regulators on issues related to regulation of energy networks, including in respect of appeal proceedings.

For more information, please contact media@frontier-economics.com, or call +44 (0)20 7031 7000.