The Wholesale Electricity Market Rules and the Gas Services Information Rules set out the requirement that the allowable revenue and forecast capital expenditure for service providers must consist only of costs that would be incurred by a prudent service provider, acting efficiently, and seeking to achieve the lowest practically sustainable cost of delivering the services in accordance with the Market Rules, while also effectively promoting the market objectives. Once approved, the service provider can recover costs from market participants through market fees. These costs are eventually passed through to consumers.
2019-2022 Allowable Revenue and Forecast Capital Expenditure
On 15 March 2019, AEMO submitted its proposal for allowable revenue of $104.241 million, and forecast capital expenditure of $78.477 million for the period 1 July 2019 to 30 June 2022 which covers AEMO’s function in the wholesale electricity and gas markets.
We received seven submissions, including two late submissions in response to our issues paper that we published on 20 March 2019.
On 8 May we published our draft determination. The submission period closed on 31 May 2019. We received seven submissions.
The ERA published its final determination on 14 June 2019. The final determination approved allowable revenue of $105.895 million and forecast capital expenditure of $66.324 million.
In period funding request 2020
On 25 September 2020, AEMO applied for additional forecast capital of $18.9 million to cover new obligations assigned to AEMO through the State Government's Distributed Energy Resources Roadmap. In November, AEMO revised this proposal to $17.9 million.
On 9 November 2020, the ERA published a draft findings report covering its initial observations about AEMO’s application.
The consultation period closed on Friday, 20 November 2020. Six submissions were received.
On 17 December 2020, the ERA published its determination, which approved additional forecast capital expenditure of $14.6 million.