AER final decision on AusNet’s pioneering customer led investment proposal

AusNet received the Australian Energy Regulator’s (AER) Final Decision today on the distributor’s customer led 2021-26 Electricity Distribution Price Review Proposal. 

The Proposal sets out AusNet’ plans for the delivery of electricity distribution services and was the first in Australia to have customer representation formally influence how future network investment is made. 

The Final Decision is an endorsement of the agreements reached with the independent Customer Forum that negotiated aspects of AusNet’ regulatory proposal on behalf of customers, as part of a trial of a new form of regulatory review process known as “New Reg”.  

AusNet is the first to trial the “New Reg” consumer engagement process, which was developed by the AER, Energy Networks Australia and Energy Consumers Australia to ensure consumers’ preferences drive regulatory proposals and outcomes.  Through this process, AusNet’ proposal was informed by feedback from over 8,400 customers.

Tony Narvaez, Managing Director, AusNet welcomed the AER’s Final Decision. 

“The Final Decision delivers price relief for our customers while also allowing for expenditures to maintain and improve network reliability and safety.  It will provide a stronger incentive to further improve the service experience of our customers during outages or when they connect.  I would like to thank the Customer Forum members for their invaluable insights on priority issues for our customers and their professionalism, dedication and hard work throughout the New Reg trial”, said Mr Narvaez.

This outcome will deliver substantive benefits to customers, including:

• An average cut to customer bills of $113 over the period (excluding higher insurance premium costs allowed by the AER), honouring the agreement reached with the Customer Forum in developing the proposal;
• Continued investment in network safety, security and reliability, including in assets that will help reduce bushfire risk, such as Rapid Earth Fault Current Limiter (REFCL) technology;
• Continued investment that will allow more customers to connect their solar panels and batteries to the network and export their power;
• Improved customer communication, including on outages, through better use of technology;
• A new incentive scheme that rewards improvements to the customer experience during outages and connections; and
• Pricing arrangements that reflect a Victorian-wide customer consultation.

Our estimated bill cuts reflect the average maximum amount we can charge to each of our current and future customers over the next 5 years.  The AER’s Decision presents expected bill increases.  This difference is because the AER’s analysis does not fully account for customer growth or expected per customer energy efficiencies.

AusNet will continue to put into action the agreed plans to improve customer outcomes and experience while supporting network investment that will enable the transition to a new energy future.

For a full copy of the Final Decision, please refer to the AER’s website www.aer.gov.au.