NECF 6.4 6.4 New regulatory obligation Customer engagement 0.5 0.5 Capitalisation policy change Reset costs 7.9 7.9 Capitalisation policy change Annual regulatory reporting 1.9 – Not a new regulatory obligation Efficient response to change in market Marketing 6.6 6.6 conditions. Insurance premiums 0.6 0.6 Prudent change in risk management Total step changes 23.9 22.0 Source: JGN, Access Arrangement Information, June 2014, p. 76. National Energy Customer Framework JGN proposed a step change of $6.4 million to comply with the National Energy Customer Framework (NECF) from 1 July 2015. We have included this step change in our opex forecast because it is driven by a change in JGN's regulatory obligations and the costs are not captured in base year expenditure. We had regard to the supporting information JGN provided and we assessed the underlying assumptions of the forecast cost of complying with the NECF. We consider that the assumptions and method JGN used to forecast the opex step change is reasonable. The NECF governs the rights, obligations and consumer protections with respect to the retailer-customer relationship and distributor-customer relationship. Under the NECF, JGN has a direct contractual relationship with gas consumers, whereas previously retailers provided the interface between JGN and customers. Specifically, under the NECF: customers can seek a range of retail support services directly from JGN that are currently performed by, or administered through, gas retailers householders, in addition to builders and developers, can make connection applications directly to JGN rather than via retailers. Further, JGN consider they will not be able to charge connection applicants an administration fee where currently they are able to.
NECF 6.4 6.4 New regulatory obligation Customer engagement 0.5 0.5 Capitalisation policy change Reset costs 7.9 7.9 Capitalisation policy change Annual regulatory reporting 1.9 – Not a new regulatory obligation Marketing 6.6 6.6 Efficient response to change in market conditions. Insurance premiums 0.6 0.6 Prudent change in risk management Total step changes 23.9 22.0 Source: JGN, Access Arrangement Information, June 2014, p. 76. National Energy Customer Framework JGN proposed a step change of $6.4 million to comply with the National Energy Customer Framework (NECF) from 1 July 2015. We have included this step change in our opex forecast because it is driven by a change in JGN's regulatory obligations and the costs are not captured in base year expenditure. We had regard to the supporting information JGN provided and we assessed the underlying assumptions of the forecast cost of complying with the NECF. We consider that the assumptions and method JGN used to forecast the opex step change is reasonable. The NECF governs the rights, obligations and consumer protections with respect to the retailer-customer relationship and distributor-customer relationship. Under the NECF, JGN has a direct contractual relationship with gas consumers, whereas previously retailers provided the interface between JGN and customers. Specifically, under the NECF: customers can seek a range of retail support services directly from JGN that are currently performed by, or administered through, gas retailers householders, in addition to builders and developers, can make connection applications directly to JGN rather than via retailers. Further, JGN consider they will not be able to charge connection applicants an administration fee where currently they are able to.
AER%20-%20Draft%20decision%20Jemena%20Gas%20Networks%20Access%20arrangement%20-%20Attachment%207%20-%20Operating%20expenditure%20-%20November%202014.DOCX