AER releases Draft Determination on TransGrid's Revenue Proposal

On Thursday 27 November, the Australian Energy Regulator released their draft revenue determinations for a number of energy networks.

This included their determination on the Revenue Proposal that TransGrid submitted in May 2014. Click here to view the AER's determination.

Below is a quick wrap up of the AER's Draft Determination.

TransGrid Proposal
AER Decision
Revenue Impact
WACC8.83%7.24%-$494 m
Opex$785 m
$660 m (-16%)
-$125 m
Capex$1,387 m
$922 m (-34%)
-$55 m
0.4-$41 m

The business continues to stand by our proposal, which keeps revenue within inflation and meeting our regulated responsibility to maintain a safe, reliable and efficient supply of electricity. As discussed over the last year of consultation, we are taking steps to deliver efficiencies to bring down costs as shown by the deferral of more than $600 million of Capex in the last regulatory period.

The reality is that these proposed cuts may come at the cost of some of our existing programs such as innovation to expand the demand management market, replacement projects and consumer engagement.

Weighing up which initiatives provide the most benefit to consumers is a tough decision. We will be working with consumer representatives, large energy users and other stakeholders to help us make these possible decisions.