PIAC made a submission to the Australian Energy Regulator’s draft decision on Transgrid’s revenue proposal for the Waratah Super Battery.
The most notable features of Transgrid’s application were their proposal to waive the two consumer protections, the Capital Expenditure Sharing Scheme (CESS) and Efficiency Benefit Sharing Scheme (EBSS), for the project, and to manage an alleged financeability problem by calculating depreciation on an as-incurred, rather than as-commissioned basis, the latter of which is the norm.
These consumer protections are important tools to manage the agent-actor problem in energy spending; while consumers foot the bill for projects, they generally have little capacity for oversight of the spending made on their behalf.
PIAC did not support the waiving of the CESS but supported the AER’s position in the draft decision to wait until the end of the first regulatory period to make a decision on applying the EBSS.
In its final decision, made on 15 December 2023, the AER ruled that the CESS would be applied to the project and that depreciation would be calculated on an as-commissioned basis.
