How we can help…
Other industry stakeholders
Our engineering, technical and regulatory experience means we can help other industry stakeholders in their dealings with regulators, rule makers, network businesses, and other stakeholders, including:
assessing network businesses’ regulatory proposals or the regulator’s decision
economic regulatory design and application advice
strategic industry reviews and regulatory-technical advice
We can be engaged as an independent advisor to a stakeholder, providing an independent report, which could form a supporting document to a submission. Or we can be engaged to work directly within the stakeholder’s team, providing resources for the analysis and advice supporting their submissions.
Assessing regulatory proposals and submissions
We have significant experience both assessing network businesses’ regulatory proposals on behalf of regulators and assisting network businesses prepare regulatory proposals. We typically focus on the expenditure elements of revenue proposals (ie historical and forecast capital and operating expenditure) and other technical components of these proposal (eg service standards and targets).
We have significant experience applying and reviewing the majority of the assessment techniques defined by the Australian Energy Regulator (AER) in its expenditure assessment guideline. We are also the developer of the repex and augex models that the AER uses to assess asset replacement and network augmentation capital expenditure forecasts. We have also applied these two models on numerous occasions to independently assess expenditure forecasts within a proposal and identify issues of most concern.
This means we are very well placed to assist other stakeholders in their own assessment of a proposal, the regulator’s decisions, or other stakeholder submission. We can provide a range of services for these purposes, including:
initial identification of proposal issues (ie for further consultation and investigation)
applying regulatory assessment techniques to the network business’ proposal and advising on their findings and limitations
reviewing and critiquing the draft and final regulatory decisions
reviewing and critiquing the network business’ response to specific matters and criticism
undertaking detailed reviews and critiques of specific project and program justifications
performing independent forecasting, analysis and reports, suitable for publication.
Economic regulatory design and application advice
Economic regulatory rules and the associated regulatory assessment methods and techniques are often being reviewed and improved. Our extensive work both assessing regulatory proposals and preparing proposals means that we are well placed to advise stakeholders on the rules, processes, methods, techniques, and information needs necessary to specify and assess expenditure components and other technical matters within a regulatory building block proposal.
The types of service we may provide to stakeholders, include:
education and guidance on the rules, process, methods and techniques to assess expenditure components of a regulatory proposal
advice, review and critique of assessment methods and techniques
conducting industry surveys and research eg national and internal surveys and literature searches
reviewing and critiquing other stakeholder analysis, reasoning and position
assistance in preparing internal documents or submissions to other parties eg submission to a regulator or rule maker
assistance in interacting with other stakeholders, including attendance at meetings and reviewing or responding to their submission or views
providing independent expert reports.
Policy advice and strategic industry reviews
Policy and regulatory settings associated with network businesses and their services are often being reviewed and changed. In addition, the industry is currently undergoing a significant change due to new technologies, including forms of distributed generation and storage and “smart grid” facilities, which are all changing how networks are operated, planned and managed now and in the future. These matters can all have a significant effect on the price and quality of the services provided by electricity network businesses.
We have broad knowledge and experience with many factors relevant to assessing changes, including:
industry and market arrangements
economic and technical rules and regulations
the network businesses’ systems, structures and asset management practices
the drivers of network expenditure and customer service quality
the effects and substitution possibilities of new technology and non-network solutions.
This means that we are well placed to advise stakeholders on the implications of possible changes. We typically can assist stakeholders by analysing and evaluating the implication of a change on a business’ expenditure, service quality or broader industry risks.
The types of service we can provide, include:
conceptual and design advice on the specification of technical aspects of rules, regulations and standards
advice on methodologies to evaluate changes, particularly with regard to predicting the effects of a change on network expenditure, customer service levels, and industry risks
the review and critique of the evaluation frameworks and models of other parties, particularly those responsible for making decisions
reviewing and critiquing of your analysis, reasoning and positions on particular matters
conducting industry surveys and research eg national and internal surveys and literature searches
assistance in preparing internal documents or submissions to other parties eg submissions to the primary reviewer
assistance in interacting with other stakeholders, particularly network businesses
providing independent expert reports.
Note on the AER’s repex and augex models
We are the original developer of the repex and augex models used by the Australian Energy Regulator (AER) to assess the asset replacement and network augmentation elements of a business’ proposal.
We can apply these or similar models to assess these expenditure components of a business’ regulatory proposal. Also we can often use these or similar models to make high-level and independent assessment of expenditure requirements due to a proposed change in rules, regulations, standards, or technology that will effect network replacement and augmentation drivers.
We can also develop other assessment models to suit the particular needs of our clients.
If you’d like to discuss the suitability of these models or something similar to help assess a particular matter – even if it’s just a speculative enquiry – then please get in touch.