AusNet’s $3.5 billion investment proposal aims to ensure its network meets customers’ needs now and into the future – but this plan is not just for customers, it’s actively shaped by them.
On 31 January 2025, AusNet submitted its five-year regulatory proposal for the electricity distribution network to the Australian Energy Regulator (AER) as part of the electricity distribution price review (EDPR) process.
The EDPR proposal outlines the future plans and costs for AusNet’s electricity distribution network for 2026–31 and, if approved by the AER, will see a $3.5 billion capital investment to support the reliability and safety of the network and drive the transition to renewable energy.
But for AusNet, this proposal is really about its customers.
Having an honest conversation
The energy sector is entering the greatest era of change since the grid powered up for the first time, and AusNet knew the way it navigated this change needed to keep pace with its customers’ needs as they evolve.
To do that, this regulatory proposal needed to be built around an in-depth understanding of what challenges customers are facing, the level of service they want and how they use the network.
AusNet General Manager Strategy and Regulation (Distribution), Charlotte Eddy, explained that this process kicked off in late 2022 with an extensive engagement program to inform the draft plan.
“We recruited a number of customers and advocates through advertising in a newspaper and online. We wanted to attract a really diverse group to make sure that they could speak for all customers across our network – and we particularly wanted representation from regional areas,” Ms Eddy said.
“Those customers filled six panels that focused on different topics, and we also took a member from each of those groups to form an overarching Coordination Group, which was tasked with helping us bring the whole proposal together.
“We have had regular discussion and engagement with those reps over the past two and a half years. During that time, we also held three off sites at various locations across our network, where we all came together and spent two days as a group to discuss the proposal as a whole.”
The six panels that informed the 2026–31 proposal were:
Tariffs and pricing
This panel focused on fair revenue allocation, the role of tariffs in the transition to renewable energy, and principles for good tariff design and pricing objectives. It also looked at the relationship between tariffs and customer outcomes and how to build customer agency.
Future networks
This panel looked at demand forecasts and the potential implications of network investment plans. This group also discussed key topics around the transition to renewable energy, including how AusNet enables the connection of new generation, how it can support community energy projects, and how the transition can unlock value for customers – including through solar and battery investments.
Electricity availability
Customers in this panel discussed ways in which AusNet could improve the reliability of its network, particularly for its worst-served customers, as well as general reliability standards, planned outages and power quality. They also looked at resilience to climate change and extreme weather events.
Customer’s experience
This panel delved into how AusNet can provide a fit-for-purpose service for all its customers, discussing the connection process, communications and customer service channels, and a Customer Service Incentive Scheme. It also addressed how AusNet could minimise the impact of planned and unplanned outages on customers.
Benchmarking and operational expenditure
The goal for this panel was to look at AusNet’s approach to operational expenditure, step changes and trend parameters. It also discussed benchmarking methodologies and performance.
Customer research and engagement
This process-focussed panel was established to support the design of AusNet’s customer engagement activities, such as its Quantifying Customer Values research project. This group collaborated on the key design elements of 20 customer workshops and on AusNet’s new Customer Satisfaction (C-Sat) tracker design. They also interviewed 26 business customers to gather their own independent insights to help fill gaps and identify blind spots in AusNet’s engagement.
Ms Eddy said that several major customer research projects also underpinned AusNet’s proposal.
“We did several big pieces of customer research during that time to help inform our discussions and make sure that they were representative of the whole of our customer base,” she said.
“One of those things we did was a very large quantitative study asking customers about their willingness to pay for different levels of service, including reliability, network, resilience and exporting their solar. And we got some really strong quantitative data that we then fed into our proposal and tested the outcomes in various ways with customers.
“We also held customer workshops with residential and small business customers. They were face to face in Epping, Wangaratta and Morwell, and we also did two groups online.
“We held four rounds of those workshops with each of those groups.”
More than 17 unique research and engagement activities involving over 15,800 customers have informed AusNet’s draft plan, including:
Quantifying Customer Values study
This study quantified the value customers place on benefits that are not currently in investment evaluations. AusNet considered not only how much customers value certain benefits, but also what service changes they’d be willing to accept.
Energy Sentiments research
This bi-annual survey tracks how customers feel about AusNet, a range of energy-related matters, appliance use and purchasing trends. The questions in this study are high-level and are designed to monitor general sentiment for changes over time.
Customer Satisfaction (C-Sat) research
Building on AusNet’s business-as-usual research program, these monthly surveys track customer satisfaction with planned and unplanned outages, new connections, and complaints, helping AusNet identify areas where it is and is not meeting expectations and prioritise improvements.
Customer segmentation study
This innovative study combined residential customer attitude surveys with smart meter data to analyse how customers are using electricity today and forecast how that could change over time. The findings were used in the demand forecasting approach for its 2026–31 EDPR.
Digital Energy Futures study
In partnership with Monash University, Energy Consumers Australia, the Australian Research Council and Ausgrid, AusNet also took part in the most extensive study of energy demand and consumers’ energy futures in Australia. The Digital Energy Futures project involved 200 residential AusNet and Ausgrid customers and covered future lives and the implications for energy forecasting. This research informed conversations about the needs and expectations of AusNet’s future customer base, and what can be done to meet them.
In order to really understand its customers’ needs, it was important to AusNet that it committed to open, honest and genuine engagement, and that it did not shy away from challenging conversations.
By engaging on complex and divisive topics, Ms Eddy explained that the goal for the proposal was not to achieve 100 per cent customer consensus but address these topics in collaboration with customers and develop a solution that balanced the needs of everyone and was supported by a majority.
“There’s an increasingly large diversity of views and needs across our customer base,” she said.
“We’ve got to keep an eye on affordability, because we know that a lot of customers are struggling with cost of living, but there’s also customers that are early adopters with a big interest in EVs and batteries who have slightly different perspectives than others.
“There’s also a big diversity in the level of service they’re currently getting – some of our regional customers have quite poor reliability, whereas our urban customers tend to have fantastic reliability.
“Because we’re a network with a uniform price, our job is to balance the interests across our whole customer base and come up with a proposal that is acceptable to all of our customer panels.”
Taking action
A clear set of customer priorities emerged from AusNet’s engagement program, and Ms Eddy explained that balancing reliability with energy affordability was a key objective in the development of its 2026–31 EDPR proposal.
“Because we know that customers are concerned about cost of living, we really need to make sure that we’re balancing affordability with the investment that we’re proposing,” she said.
“A big priority area for [customers] is needing to us to improve our network reliability and resilience to large weather events.
“We have experienced four major storms over the last four years and a very significant bushfire events five years ago as well. Customers really want us to do more to try to avoid the prolonged outages that can be caused by those events.
“They also want us to respond quicker and be more visible in the communities to provide support should the power be off for a long period of time. It was actually one of the things that they were willing to pay the most for us to invest in, and they also want us to uplift reliability outside of those events.”
The energy transition was also a prominent area of interest for customers.
“They’re interested in how we’re adapting for the future – our need to innovate, and [how we] accommodate electrification of gas, electric vehicles and unlock more renewable energy,” Ms Eddy said.
Once it had identified the key areas of interest for its customers, AusNet turned these expectations into key tangible outcomes in its 2026–31 proposal:
- Prioritising energy affordability and value for money
- Delivering reliable and safe electricity
- Continuously improving customer service
- Innovating to find better, more efficient ways to do things
- Preparing the network for net zero
- Delivering a fair and equitable transition for all
- Building customers’ agency
- Staying accountable
- A range of initiatives and actions that AusNet will take are then identified within the proposal to deliver on these outcomes.
Reliable, safe, affordable
According to Ms Eddy, AusNet’s EDPR proposal includes several investments to boost reliability.
“We’ve got a $21 million program to uplift the reliability of our ten worst-served feeders, and we’ve also got a dedicated project in Euroa – which is a $22 million investment to deal with some acute reliability issues that we’ve seen up there in the last couple of years,” she said.
“We’re also proposing a $77 million regional reliability allowance, which will be overseen by a group of our customers and will be targeted at problem areas in the worst served parts of our network. But importantly, our customers have a say in how that money is spent, and we will report back on the outcome from that investment.
AusNet is also proposing a $264 million investment to make the network more resilient to extreme weather and a further $16 million to reduce the impact of outages on communities.
“Extreme weather events are expected to become more frequent and larger scale, so we’re reducing the risk that they will result in long power outages. But if they do [cause an outage], we’ll have more support on the ground of customers that are off supply, and more support to work with local councils and other critical utilities to prepare for those events,” Ms Eddy said.
AusNet’s 2026–31 proposal also includes a $1.35 billion investment to replace ageing network assets, maintain safety and reliability, and meet compliance obligations. While these upgrades are strongly supported by customers, AusNet knew it was also critical to keep its network charges as low as possible and strike that perfect balance between affordability and reliability.
To achieve this, the proposal outlines flat rates for residential customers that incorporates quantitative measurement of the value customers place on service improvements. It also includes an in-depth top-down assessment to identify potential areas to save and removes or defers investments areas that won’t significantly impact customers’ experience.
A greener future for all
Ms Eddy said that one of the key challenges AusNet found was that it needed really test the limits of the current regulatory framework.
“It was really designed for a different time and the energy transition is throwing some new challenges,” she said.
“As [customers] electrify, they’re more dependent on electricity and we need to make sure that they’re getting a level of service that’s commensurate with that.
“Another issue with the framework is that there’s more uncertainty over forecasts than there has been before. The regulator needs to make a decision on our expenditure out to 2031 but there’s quite a bit of uncertainty about what’s needed between now and then. So, we need to find ways of flexing the funding provided if things happen faster or slower than we expect today.”
To ensure that all its customers were positioned to benefit from the transition to renewable energy, AusNet needed to close the reliability gap between metropolitan and regional customers and ensure that everyone had access to the right information.
“Customers want more information about the transition, because there’s a lot of confusion out there, and our panels said that AusNet had more of a role to play in putting out trusted information,” Ms Eddy said.
“Whether it’s about how and when to use energy to lower costs, or [how they can invest in] consumer energy resources, that [information] will really help them build their agency to make their own decisions for the transition.”
AusNet’s proposal also looks at rolling out flexible solar export limits for all new systems, which Ms Eddy said will enable solar customers to export more most of the time, but means that AusNet can limit that export in times where it would be problematic for network security.
“As an extension of that, we’re also starting to look at flexible load and we want to offer large customers, and large grid scale batteries, flexible load connections in exchange for lower costs. We’re also intending to do a trial looking at flexible load for residential customers with electric vehicles,” she said.
“[The proposal also includes] a $15 million innovation fund, which will again be overseen by a customer governance panel called our Innovation Advisory Committee. It will be targeted at areas of innovation, where us and the wider industry need to learn more to support customers through the transition.”
While AusNet is seeing an increase in household electrification and greater uptake of electric vehicles, it’s also seeing large population growth, particularly in the south-east and north-east of Melbourne.
“We have a substantial $770 million proposal to increase the capacity of the network, which includes investing in two new zone substations – one in Wollert and one in Pakenham – as well as increasing the capacity of other growth areas,” Ms Eddy said.
To address constraints on the low-voltage network, Ms Eddy said that AusNet’s proposal also includes an upgrade program to ensure that the street level network can deal with the expected electrification over the next five years.
“If the proposal gets approved, we will also unlock new renewable generation to keep lower pressure on wholesale market prices,” she said.
“We proposed a proactive investment in large scale generation around the Morwell and Wodonga areas of our network so that we can utilise the existing capacity on the distribution network to unlock those connections at a lower cost than would otherwise be able to be achieved.”
Continuously improving
Once the draft proposal was released, AusNet’s customers were again called upon to provide feedback and refine the EDPR before it was submitted to the AER.
“We did a round of customer workshops to really test whether we have got the balance right,” Ms Eddy said.
“The most material change we made after that is deferring $70 million of expenditure on improving the resilience of our network to extreme events beyond 2031 to keep costs slightly lower.”
But, even with the proposal now in the hands of the AER, AusNet’s customers will still have a key role to play if it’s approved.
As the initiative under the proposal take shape, the Customer Consultative Committee will hold AusNet to account on things that matter to customers and there would be channels established for AusNet executives to hear directly from customers.
From the very beginning, AusNet put its customers at the heart of its 2026–31 EDPR proposal. Its goal was to create a plan that responds directly to what its customers have said they want and delivers those needs in a way that balances investment and affordability.
For the full 2026–31 EDPR, visit communityhub.ausnetservices.com.au/engage
