EUAA Submission: AER Values Of Customer Reliability Methodology – Draft Determination

EUAA Submission: AER Values Of Customer Reliability Methodology – Draft Determination

Emily Wood | April 24, 2024

‘… In our earlier submission on this matter[1], we set out our reasons for not supporting the proposed expedited process with particular focus on the proposed methodology for residential and small business customers. We are generally happy with the direct cost methodology being used for customer with demand >10MVA, though we would appreciate the opportunity to review the large customer questionnaire to ensure it reflects the actions our members are taking behind the meter to improve their reliability. They do not want to pay twice.

We noted that we have strongly supported past AEMO and AER VCR valuation processes and looked forward to being able to do so again in 2024. Our objective in objecting to the expedited process was not to get a lower VCR. Our objective was to get a robust VCR that is the result of a comprehensive engagement process to give all stakeholders confidence in the methodology and results. The risk of failing to do that is consumers (and networks) lack confidence in the results. This then rebounds on networks when they are seeking to meet their obligations under the Better Reset’s Handbook in their engagement on expenditure proposals reliant on the new VCR values.

We argued that the AER had not made the case that minor amendments to the 2019 methodology enabled it to remain ‘fit for purpose’ in 2024. The AER’s justification seemed to place greater emphasis on a consistent methodology with 2019 than the relevance of the methodology to what is the situation in 2024 and what might develop over the next 5 years. We suggested that the AER should be seeking the best measure – that may or may not be consistent with the 2019 results. We acknowledged that the AER may be right. Our issue is that the engagement process needs to allow for that conclusion to be transparently tested….’


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