About the framework and approach The Australian Energy Regulator (AER) is the economic regulator for transmission and distribution services in Australia's national electricity market (NEM). We are an independent statutory authority, funded by the Australian Government. Our powers and functions are set out in the National Electricity Law (NEL) and National Electricity Rules (the rules or NER). The framework and approach (F&A) is the first step in a process to determine efficient prices for electricity distribution services. This paper sets out our proposed approach on which services we will regulate and how we propose to apply the relevant incentive schemes. It also assists network service providers to prepare regulatory proposals. TasNetworks Distribution (formerly Aurora Energy) is a licensed regulated operator of the Tasmanian monopoly electricity distribution network. The network comprises the poles, wires and transformers used for transporting electricity across urban and rural population centres to homes and businesses. TasNetworks Distribution (TasNetworks) designs, constructs, operates and maintains the distribution network for Tasmanian electricity consumers. We regulate a variety of services provided by TasNetworks. Where there is considerable scope to take advantage of market power, our regulation is more prescriptive. Less prescriptive regulation is required where the prospect of competition exists. In some situations we may remove regulation altogether. In 2015 we decided to replace the current Tasmanian F&A for the next regulatory control period. This decision arose following consultation with stakeholders. Our main reason for this decision was because of significant changes to the rules to introduce new incentive schemes and revised regulatory requirements, making elements of the current F&A no longer relevant. TasNetworks sought a new or amended F&A. Submissions received also supported the amendment or replacement of the current F&A. Copies of all submissions are available at http://www.aer.gov.au/node/30748. The current five year Tasmanian distribution regulatory control period concludes on 30 June 2017. This paper relates to the two year regulatory control period commencing 1 July 2017 and sets out our proposed approach on: distribution service classification services are to be regulated) control mechanisms (how will prices be determined) and the formulae that give effect to the control mechanisms service target performance incentive scheme efficiency benefit sharing scheme capital expenditure sharing scheme demand management incentive scheme application of the expenditure forecast assessment guidelines whether depreciation will be based on forecast or actual capital expenditure jurisdictional and legacy issues.
About the framework and approach The Australian Energy Regulator (AER) is the economic regulator for transmission and distribution services in Australia's national electricity market (NEM). We are an independent statutory authority, funded by the Australian Government. Our powers and functions are set out in the National Electricity Law (NEL) and National Electricity Rules (the rules or NER). The framework and approach (F&A) is the first step in a process to determine efficient prices for electricity distribution services. This paper sets out our proposed approach on which services we will regulate and how we propose to apply the relevant incentive schemes. It also assists network service providers to prepare regulatory proposals. TasNetworks Distribution (formerly Aurora Energy) is a licensed regulated operator of the Tasmanian monopoly electricity distribution network. The network comprises the poles, wires and transformers used for transporting electricity across urban and rural population centres to homes and businesses. TasNetworks Distribution (TasNetworks) designs, constructs, operates and maintains the distribution network for Tasmanian electricity consumers. We regulate a variety of services provided by TasNetworks. Where there is considerable scope to take advantage of market power, our regulation is more prescriptive. Less prescriptive regulation is required where the prospect of competition exists. In some situations we may remove regulation altogether. In 2015 we decided to replace the current Tasmanian F&A for the next regulatory control period. This decision arose following consultation with stakeholders. Our main reason for this decision was because of significant changes to the rules to introduce new incentive schemes and revised regulatory requirements, making elements of the current F&A no longer relevant. TasNetworks sought a new or amended F&A. Submissions received also supported the amendment or replacement of the current F&A. Copies of all submissions are available at http://www.aer.gov.au/node/30748. The current five year Tasmanian distribution regulatory control period concludes on 30 June 2017. This paper relates to the two year regulatory control period commencing 1 July 2017 and sets out our proposed approach on: distribution service classification services are to be regulated) control mechanisms (how will prices be determined) and the formulae that give effect to the control mechanisms service target performance incentive scheme efficiency benefit sharing scheme capital expenditure sharing scheme demand management incentive scheme application of the expenditure forecast assessment guidelines whether depreciation will be based on forecast or actual capital expenditure jurisdictional and legacy issues.
AER%20-%20Final%20framework%20and%20approach%20for%20TasNetworks%20distribution%20regulatory%20control%20period%202017-19%20-%209%20July%202015_0.docx