The Australian Energy Regulator (AER) has approved the reimbursement of Endeavour Energy for network recovery costs following the 2019-20 bushfires in New South Wales.
The AER has approved a cost pass through application to reimburse Endeavour Energy for replacing powerlines and supporting infrastructure, and restoring services in the Blue Mountains, Southern Highlands and South Coast.
AER Chair, Clare Savage, said that while the regulator does not develop or propose the spending required to repair infrastructure damaged in bushfires and restore impacted services, it has a vital role in ensuring consumers do not pay more than required for the works.
“These devastating fires had a significant impact on local communities and their electricity infrastructure,” Ms Savage said.
“Consumers ultimately foot the bill to replace and repair infrastructure damaged in bushfires, and we must carefully assess the spending proposals from the energy businesses.
“In making this assessment, we’ve used the principle that consumers should pay no more than necessary for safe and reliable energy.”
The AER has approved a pass through amount of $26.7 million in expenditure for Endeavour Energy to replace infrastructure, including poles and wires and to restore services in the affected areas.
The AER has approved the costs to be recovered over the remainder of the 2019-24 regulatory period in order to smooth the bill impact for consumers.
This will increase the average annual bill of Endeavour Energy’s customers by approximately $5 for households and $19 for small businesses over the period 1 July 2021 to 30 June 2024. This will result in customers paying an additional $15 for households and $57 for small businesses in electricity bills in total over the three years.
Under the National Electricity Rules, the AER is required to assess cost pass through applications in relation to natural disaster events.
A cost pass through allows network businesses to recover their efficient costs associated with natural disasters such as bushfires that are not accounted for in their current revenue determination.