Australian Competition Tribunal releases judgments on appeals against Australian Energy Regulator’s determinations
Today the Australian Competition Tribunal published its judgments on several merits reviews of revenue reset decisions made by the Australian Energy Regulator (AER). These appeals, the most complex of their kind ever seen in Australia, were brought by the Public Interest Advocacy Centre (PIAC) on behalf of electricity consumers, three electricity distributors in New South Wales (NSW), one electricity distributor in the Australian Capital Territory, and one gas pipeline network operator in NSW. The revenue impact of the errors claimed by the appellants, over the forthcoming regulatory period, totalled in excess of A$8.5 billion. The issues on which review was sought were very wide-ranging. In terms of revenue impact, the most substantive issues related to the AER’s decisions on the return on equity allowance, the return on debt allowance, the value of imputation credits (for the purposes of determining the corporation tax allowance) and the AER’s use of benchmarking to determine operating expenditure allowances for the electricity distributors that sought review. Frontier (Australia and Europe, jointly) advised the networks involved in the appeals on all of these issues. The Tribunal found that the AER had erred in relation to all of these matters, except the return on equity, and has remitted them back to the AER for reconsideration. The Tribunal did not uphold the appeals brought by PIAC.
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