Application by United Energy Distribution Pty Limited - [2012] ACompT 1

AUSTRALIAN COMPETITION TRIBUNAL
Application by United Energy Distribution Pty Limited [2012] ACompT 1

Citation: Application by United Energy Distribution Pty Limited [2012] ACompT 1

Review from: Australian Energy Regulator

Parties:
UNITED ENERGY DISTRIBUTION PTY LIMITED (ABN 70 064 651 029)

SPI ELECTRICITY PTY LIMITED (ABN 91 064 235 776)

CITIPOWER PTY (ABN 76 064 651 056)

powercor australia limited (abn 89 064 651 109)

JEMENA ELECTRICITY NETWORKS (VIC) lTD (ACN 064 651 083)

File numbers: ACT 6 of 2010
ACT 7 of 2010
ACT 8 of 2010
ACT 9 of 2010
ACT 10 of 2010

Tribunal: FOSTER J (DEPUTY PRESIDENT), MR G LATTA AM AND PROFESSOR D ROUND

Date of decision: 6 January 2012

Legislation:
Acts Interpretation Act 1901 (Cth)
Competition and Consumer Act 2010 (Cth), s 44AAF
Corporations Act 2001 (Cth)

Electricity Safety (Bushfire Mitigation) Amendment Interim Regulations 2010
Electricity Safety Act 1998 (Vic) s 113A of Div 2A of Pt 10

Electricity Safety (Electric Line Clearance) Regulations 2005, cll 9, 9.1, 9.3, 12, reg 10
Electricity Safety (Electric Line Clearance) Regulations 2010, Table 2
Interpretation of Legislation Act 1984 (Vic), s 27, s 28(2)
National Electricity Law, ss 2, 2B, 2C, 2D, 3, 5, 7, 7A, 8, 9, 11(2), 14B, 15, 16, 16(1)(b), 18, 28D, 28ZC, 57B, 71B, 71C, 71C(1), 71C(1)(c), 71C(1)(d), 71C(2), 71J(b), 71L, 71M, 71N, 71O, 71O(2), 71P, s 71P(2)(a), 71R, 71R(3), 71R(3)(b), 71R(4), 71R(5), 71R(6), Part 4 Div 1, Part 6 Div 3A, Part 3 Div 6, Part 7, Schedule 1, Schedule 2
cll 1, 1(2), 2, 7, 8, 11, 12, 13, 15, 17, 19, 23–26, 31–34, 39, 42 and 43
National Electricity (South Australia) Act 1996, ss 11, 12 and 15
National Electricity (Victoria) Act 2005, ss 3, 16(4)(b), s 23
National Electricity (Victoria) Amendment Act 2007, s 5
National Gas Law, s 245
Electricity Safety (Electric Line Clearance) Regulations 2005, cl 9
National Electricity (Economic Regulation of Distribution Services) Amendment Rules 2007
National Electricity Rules (Version 39) Chapter 6,
Ch 10 Glossary, Pt C and Pt E of Ch 6, Sch 6.1 and Sch 6.2 to Ch 6, cll 1.7.1, 6.2.5(b)(4), 6.3.1(a), 6.3.1(b), 6.3.1(c)(1), 6.3.1(c)(2), 6.4.1, 6.4.2, 6.4.2(a), 6.4.2(b)(1), 6.4.2(3), 6.4.2(4), 6.4.3, 6.4.3(a), 6.4.3(a)(1), 6.4.3(a)(2), 6.4.3(a)(5), 6.4.3(a)(6), 6.4.3(a)(7), 6.4.3(b)(1)(i), 6.4.3(b)(2), 6.4.3(b)(5), 6.4.3(b)(6), 6.4.3(b)(7), 6.5.1, 6.5.1(a), 6.5.1(e), 6.5.1(e)(3), 6.5.1(f), 6.5.2, 6.5.2(a), 6.5.2(b), 6.5.2(c), 6.5.2(d), 6.5.2(e) ,6.5.3(b)(2), 6.5.6, 6.5.6(a), 6.5.6(b), 6.5.6(c), 6.5.6(d), 6.5.6(e), 6.5.7(a), 6.5.7(b), 6.5.7(c), 6.5.7(d), 6.5.7(e), 6.5.8, 6.6.1(a), 6.6.1(c), 6.6.1(d), 6.6.1(e), 6.6.1(i), 6.6.1(j), 6.6.2, 6.6.2(a), 6.6.3, 6.12, 6.12.1, 6.12.1(2), (3) and (4), 6.12.1(4)(ii), 6.12.1(5), 6.12.1(6), 6.12.1(11), 6.12.1(12), 6.12.1(13), 6.12.1(14), 6.12.1(18), 6.12.2, 6.12.3, 6.12.3(a), 6.12.3(f), 6.14, 6A.7.3, S6.1.2, S6.2.1, S6.2.1(a)(1), S6.2.1(a)(2), S6.2.1(b), S6.2.1(c), S6.2.1(c)(1), S6.2.1(c)(2), S6.2.1(c)(3), S6.2.1(d), S6.2.1(e), S6.2.1(e)(1), S6.2.1(f), S6.2.2, S6.2.3, S6A.2.1(f)(1), 9.29.5(b)(2)
Victorian Public Lighting Code, cl 2.1(c)

Cases cited: Application by ActewAGL Distribution (2010) ATPR 42-324
Application by Energex Limited (Gamma) (No 5) (2011) ATPR 42-356
Application by EnergyAustralia and Ors (2009) ATPR 42-299
Application by Epic Energy South Australia Pty Ltd (2003) ATPR 41-932
Application by Jemena Gas Networks…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] ACompT 1
Decision Date: 6 January 2012

CaseChat Overview and Summary

The Australian Competition Tribunal reviewed applications by five electricity distribution service providers (DNSPs) against final distribution determinations made by the Australian Energy Regulator (AER). The DNSPs contested various aspects of the AER's decisions, including public lighting issues, operational expenditure (opex) and internal and related party costs, closeout of the Essential Services Commission of Victoria's (ESCV) "S" Factor Scheme, establishment of the regulatory asset base, debt risk premium (DRP), capital expenditure, disallowance of enterprise support function costs, gamma, materiality threshold for nominated pass-through events, efficiency carryover mechanism, and vegetation management opex step change. The Tribunal considered the legislative framework, the AER's methodology, and the DNSPs' submissions and arguments. The Tribunal found that the AER erred in its application of the ESCV's "S" Factor Scheme, its methodology for indexing the regulatory asset base for inflation, its annualisation of DRP, and its substitution of costings for the vegetation management opex step change. The Tribunal also found that the AER erred in its disallowance of certain enterprise support function costs and its application of the 2001-2005 accrued negative carryover. The Tribunal remitted certain issues to the AER for reconsideration and varied the distribution determinations accordingly.

Orders