Summary of submissions Issue Respondent View The EBSS provides the incentive both to continually reduce costs General Actew AGL to gain a share of benefits of doing so and to avoid unnecessary increases in costs due to the penalty incurred. Considers the current EBSS operates to incentivise businesses to APA Group remain within expenditure allowances, without sufficient attention to whether this represents an efficient outcome. The default position should be that incentive schemes are linked to revealed costs, except in exceptional circumstances. CitiPower/Powercor/SA Support the current EBSS but suggest that where DNSPs are Power Networks approaching the frontier they should be provided with a higher sharing ratio to encourage further pursuit of efficiencies that are harder and riskier to obtain. Remain unconvinced that the current revealed cost approach to setting allowed opex, and the current EBSS are working as well as suggested in the Issues Paper. Council of Small Business Australia (COSBOA) It is difficult to conclude unequivocally that the existing split for benefit sharing should be supported, although it has about the right intuitive feel. Does not consider the available evidence demonstrates the existing revealed cost approach is deficient and isn't aware that a sufficiently robust exogenous method for determining base opex is open to the AER. For this reason supports the continued use of Energex the current EBSS. Concerned that the incentive framework is becoming increasingly complicated and suggests the AER adopt a simple approach and not attempt to pursue false precision. Supports the continued use of the EBSS. Has significant concerns around the proposed use of exogenous Energy Networks Association forecasting techniques. Considers that should the AER pursue (ENA) such an avenue then we should explore how this can be accommodated through adjustments to the opex base year, whilst retaining the current EBSS rather than implementing a new EBSS
Summary of submissions Issue Respondent View General Actew AGL The EBSS provides the incentive both to continually reduce costs to gain a share of benefits of doing so and to avoid unnecessary increases in costs due to the penalty incurred. APA Group Considers the current EBSS operates to incentivise businesses to remain within expenditure allowances, without sufficient attention to whether this represents an efficient outcome. CitiPower/Powercor/SA Power Networks The default position should be that incentive schemes are linked to revealed costs, except in exceptional circumstances. Support the current EBSS but suggest that where DNSPs are approaching the frontier they should be provided with a higher sharing ratio to encourage further pursuit of efficiencies that are harder and riskier to obtain. Council of Small Business Australia (COSBOA) Remain unconvinced that the current revealed cost approach to setting allowed opex, and the current EBSS are working as well as suggested in the Issues Paper. It is difficult to conclude unequivocally that the existing split for benefit sharing should be supported, although it has about the right intuitive feel. Energex Does not consider the available evidence demonstrates the existing revealed cost approach is deficient and isn't aware that a sufficiently robust exogenous method for determining base opex is open to the AER. For this reason supports the continued use of the current EBSS. Concerned that the incentive framework is becoming increasingly complicated and suggests the AER adopt a simple approach and not attempt to pursue false precision. Energy Networks Association (ENA) Supports the continued use of the EBSS. Has significant concerns around the proposed use of exogenous forecasting techniques. Considers that should the AER pursue such an avenue then we should explore how this can be accommodated through adjustments to the opex base year, whilst retaining the current EBSS rather than implementing a new EBSS
AER%20Explanatory%20statement%20-%20proposed%20efficiency%20benefit%20sharing%20scheme%20-%20August%202013_1.DOCX