AER’s Jemena draft decision favours consumers

Jemena

The AER has issued a draft remade decision for Jemena Gas Networks’ (JGN) 2015-20 access arrangement period, and says consumers can look forward to stable and predictable gas network charges as a result.

AER chair Paula Conboy said consumers do not want to pay any more than needed for safe and reliable gas services.

“Australian businesses and households can take confidence from decisions like this,” she said.

“This decision promotes network charge stability for consumers and also guarantees that many millions of dollars will be returned to bill payers in coming years.

“At a time when energy affordability is a major concern, this decision is a big win for consumers.”

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In 2015, JGN proposed to recover $2,605.2 million ($ nominal) from consumers over the 2015-20 access arrangement period, but the AER approved the lower amount of $2,229 million in its final decision.

Legal action followed, resulting in the AER’s 2015 final decision being set aside by the Australian Competition Tribunal.

The AER has remade this set aside decision and if implemented in full, JGN will be allowed to recover $2,246.6 million ($ nominal) from its customers over the 2015‑20 access arrangement period.

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If implemented this will result in a revenue allowance of $17.6 million (or 0.8 per cent) above the AER’s 2015 final decision after incorporating updated information, and $169 million ($2019-20) as at 30 June 2020 being returned to consumers in the next access arrangement period (2020‑25).

Ms Conboy said the process demonstrated the AER’s commitment to helping ensure efficient spending by networks.

“This outcome is also a great example of how engaging with consumers in a revenue setting process can benefit everyone, and it’s a process being applied more broadly to other network decisions,” she said.

“This is the type of approach the AER is keen to model with network businesses to drive a more efficient reset process across the National Energy Market.

“We are satisfied this decision is in the long-term interests of consumers and will promote price stability at a time when affordability is a major concern for many consumers.”