Application by EnergyAustralia and Others (No 2) [2009] ACompT 9

Application by EnergyAustralia and Others (No 2) [2009] ACompT 9

The Tribunal found that the AER's exercise of discretion regarding withholding agreement to the proposed averaging periods for the risk free rate and debt risk premium was incorrect and unreasonable, required variation of WACC parameters, and certain operating expenditure decisions required revision or affirmation as specified. The control mechanism for public lighting was set aside and remitted with directions, in accordance with the established grounds for review.

Jurisdiction
Australia
Judgment Date
25 November 2009
Procedural Posture
Application for Review of Regulatory Decisions / Tribunal Determination on Merits Review
Outcome
Varied in part, affirmed in part, some matters remitted with directions
Legal Topics
['merits Review of Regulatory Determinations' 'distribution and Transmission Pricing' 'weighted Average Cost of Capital (wacc)' 'public Lighting Pricing' 'operating and Maintenance Expenditure' 'bond Yield Methodology' 'control Mechanisms']
['administrative Law' 'energy Law' 'competition Law'] ['merits Review of Regulatory Determinations' 'distribution and Transmission Pricing' 'weighted Average Cost of Capital (wacc)' 'public Lighting Pricing' 'operating and Maintenance Expenditure' 'bond Yield Methodology' 'control Mechanisms']

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Procedural Posture

Application for Review of Regulatory Decisions / Tribunal Determination on Merits Review

Legal Issues

  1. 1 ['Whether the AER erred in its exercise of discretion regarding averaging periods for risk free rate and debt risk premium' "Whether AER's decisions on forecast operating expenditure and control mechanisms were unreasonable" 'Whether the AER should allow certain operating expenditure step changes' "Scope of Tribunal's power in remitting matters for reconsideration"]

Ratio Decidendi

The Tribunal found that the AER's exercise of discretion regarding withholding agreement to the proposed averaging periods for the risk free rate and debt risk premium was incorrect and unreasonable, required variation of WACC parameters, and certain operating expenditure decisions required revision or affirmation as specified. The control mechanism for public lighting was set aside and remitted with directions, in accordance with the established grounds for review.

Court Disposition

Varied in part, affirmed in part, some matters remitted with directions

Orders

  • ["The AER's decisions on averaging periods for risk free rate and debt risk premium for each applicant are varied to adopt the averaging periods proposed in revised revenue proposals." 'WACC parameters for applicants are varied as specified (i.e. Nominal Vanilla WACC to 10.02% for applicable distributors).' 'Certain...