The Australian Energy Regulator (AER) has today approved $2.6 billion to maintain and upgrade AusNet’s electricity distribution network across eastern and northern Victoria, along with $1.6 billion to operate the network over the next five years.
AusNet Executive General Manager Distribution, Andrew Linnie, thanked the AER for its consideration of its proposal and said that, while the decision was an improvement on the AER’s draft determination, it is around $800 million less than the investment AusNet proposed.
“The reduction on current spending levels falls short of what is needed to meet escalating network needs for our customers as electricity demand accelerates through electrification and population growth,” said Mr Linnie.
“This reduction will make it more challenging for our customers to unlock savings in gas and petrol bills by electrifying and for AusNet to equip the network to withstand more frequent and severe weather events,” Mr Linnie said.
Mr Linnie said AusNet’s priority remains delivering safe and reliable electricity services for customers and communities across Victoria.
The $2.6 billion includes:
- $970 million to replace ageing assets so the network can continue to operate safely and reliably.
- $840 million to increase the capacity of the network, connect new customers and support growth.
- $290 million on digital systems to maintain core services and improve our responsiveness to extreme weather events.
- $250 million to invest in our fleet and property assets, including $90 million to upgrade ageing lines-worker training facilities and depots.
- $84 million to make the highest risk parts of our network more resilient to extreme weather and improve reliability for some of our worst served customers.
- $61 million to integrate consumer energy resources, manage demand more flexibly and improve network data visibility.
The AER’s decision concludes a three year regulatory process, during which AusNet developed its plans with extensive input from customers, community groups and stakeholders.
Mr Linnie said the operating environment had shifted significantly, with global events contributing to faster than expected uptake of electric vehicles and increased volatility in weather conditions.
“These changes highlight just how complex it is to plan for an electricity network that must remain reliable today while also preparing for a rapidly changing future.”
“Given the complexity of the revenue determination, we will now review the decision in detail and carefully consider its implications for the customers and communities we serve,” said Mr Linnie.
More detail on the AER’s decision can be found here: News | Australian Energy Regulator (AER).