case for excluding 'innovation' costs. Supported the guidelines including principles for determining what ActewAGL can be excluded from the CESS. Supported capex being adjusted for actual growth and achieved MEU replacement before the CESS is applied. Supported capex associated with contingent projects, pass throughs and re-openers being excluded from the CESS. CitiPower, Powercor and Suggested that the AER develop a defined and agreed list of SA Power Networks principles or criteria for capex that could be excluded from the CESS. Noted that demand, the form of price control, the length of the Grid Australia regulatory period and the treatment of less certain projects and unexpected costs can all result in windfall gains/losses. Respondent Comments Issue Supported the guidelines including a defined and agreed set of Exclusions from the ENA principles and criteria for identifying potential exclusions from the CESS CESS with NSPs able to apply for these exclusions. Supported adjustments for growth assumptions, labour and DSDBI materials COSBOA Did not support any exclusions being allowed. Inclusion of the power of the CESS in the Supported the power of the CESS (or the method for determining PIAC guidelines the power of the CESS) being included in the guidelines. CitiPower, Powercor and Supported the power of the CESS being included in the guidelines SA Power Networks with flexibility for higher rewards for more efficient NSPs. Supported the incentive rates (or methodology for determining Grid Australia these) being included in the guidelines. Recommended a range and criteria be included in the guidelines ENA with the specific power to be determined in the framework and
case for excluding 'innovation' costs. ActewAGL Supported the guidelines including principles for determining what can be excluded from the CESS. MEU Supported capex being adjusted for actual growth and achieved replacement before the CESS is applied. CitiPower, Powercor and SA Power Networks Supported capex associated with contingent projects, pass throughs and re-openers being excluded from the CESS. Suggested that the AER develop a defined and agreed list of principles or criteria for capex that could be excluded from the CESS. Grid Australia Noted that demand, the form of price control, the length of the regulatory period and the treatment of less certain projects and unexpected costs can all result in windfall gains/losses. Issue Respondent Comments Exclusions from the CESS ENA Supported the guidelines including a defined and agreed set of principles and criteria for identifying potential exclusions from the CESS with NSPs able to apply for these exclusions. DSDBI Supported adjustments for growth assumptions, labour and materials COSBOA Did not support any exclusions being allowed. Inclusion of the power of the CESS in the guidelines PIAC Supported the power of the CESS (or the method for determining the power of the CESS) being included in the guidelines. CitiPower, Powercor and SA Power Networks Supported the power of the CESS being included in the guidelines with flexibility for higher rewards for more efficient NSPs. Grid Australia Supported the incentive rates (or methodology for determining these) being included in the guidelines. ENA Recommended a range and criteria be included in the guidelines with the specific power to be determined in the framework and
AER%20Explanatory%20statement%20-%20draft%20capital%20expenditure%20incentive%20guideline%20-%20August%202013.DOCX