EUAA Submission: AER Draft Capital Expenditure Incentive Guidelines 2025
Emily Wood | June 27, 2025
The Capital Expenditure Sharing Scheme for which these Guidelines apply is critical to consumers maintaining some form of level ground in network capital projects that have cost overruns. While this is a “scheduled” review, networks are pushing for more of the cost overrun to be passed through to consumers, reducing their risk and incentive to manage capital projects properly.
‘…At the EUAA, we support the design of rules, legislation and procedures that achieve efficient, cost effective and equitable outcomes for networks, developers and consumers and risks are appropriately allocated to those best able to manage them. In the energy sector under most circumstances, this is best achieved through a national approach and a sharp focus on the NEO. From our perspective, an equitable balance has not been reached in the Draft Guidelines and there is a high likelihood of transfer of risk from NSP’s managing projects to consumers.
We understand that the Draft Guidelines attempt to establish a mechanism that encourages NSP’s to limit overspend on their regulated capital expenditure allowance for both their allowance during the regulatory control period and for ISP projects….’
Please download attachment to read our full submission.
