AER releases draft of proposed approach to regulatory ‘resets’ for network businesses

The Australian Energy Regulator (AER) has today released the draft of its proposed approach to network revenue determinations, the Better Resets Handbook - Towards consumer-centric network proposals, and is calling for comment from network businesses and consumer groups.

Revenue determinations, often referred to as 'resets', involve an extensive regulatory process in which the AER confirms how much a network distribution or transmission business can recover from its customers over a five-year period.

The draft Better Resets Handbook proposes changes in the way the process is undertaken, placing greater emphasis on high quality consumer engagement and offering more clarity on what the AER considers would be in a proposal that is capable of acceptance.

With the overarching aim of creating a more efficient process that is better for consumers now and in the long-term, the Better Resets Handbook outlines AER expectations in the key areas of tariffs, forecast expenditure, and depreciation.

It also outlines what genuine consumer engagement looks like in a reset process and establishes a new targeted review stream that would allow network businesses to receive earlier guidance from the AER on their proposal.

The targeted review stream is a key innovation, as it creates the opportunity for the AER to provide networks with early guidance at the Issues Paper stage. This will enable network businesses to focus on improvements that would make their consumer-centric proposal more likely to be accepted at the draft decision stage.

Discussions with stakeholders have informed the draft, and the AER now seeks comments before releasing its final version.

An online forum on the Better Resets Handbook will be held on 6 October.

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