We appreciate the opportunity to comment on AusNet Services’ proposal to the Australian Energy Regulator (AER) to vary their access arrangements for 2023-28.
- In summary, our submission makes the following points:
Electrification of end uses historically supplied with gas is a structural shift that has been foreseeable for many years, predating AusNet Services’ existing access arrangement. Therefore, accelerated depreciation of the asset base is not justified because AusNet Services (and others) have already had reasonable opportunity to recover their efficient costs.
- The precise speed of electrification is more difficult to forecast. Coupled with an existing problem with persistent supernormal profits across all networks, there is a strong case for broader AER reform in the interests of consumer affordability.
- The AER should close the loop on forecasts by implementing regular ex post evaluation that leads to reinvestment of supernormal profits and/or higher efficiency benchmarks.
- The AER should formally plan for how the costs of gas network redundancy will be fairly apportioned.
Read the full submission below or download it here >>