Australian Competition Tribunal overules AER , allows untendered Victoria Advanced Interval Meter Rollout contract billed to end users |
First 12 of 12 paragraphs shown Victorian small consumer tariffs would increase about 3 per cent on top of other rises, after a 25 January ruling by the Australian Competition Tribunal overuled a determination by the Australian Energy Regulator (AER) and allowed an untendered internal contract between related firms (AIMRO Services Requirements) for Advanced Interval Meter Rollout (AIMRO) to Alinta Asset Management, to get billed to end customers. This decision allowed fees of $13.1 million by United Energy Distribution Pty Ltd (UED) to be billed to end users. Jemena Electricity, too: Related party margins/management fees of $8.4 million were allowed for Jemena Electricity Networks (Vic) Ltd One million meters at consumer cost: Each appellant is a monopoly distributor, (DNSP) and required to install smart meters at its existing customers’ premises. In all they are required to install approximately one million meters. The self-contracting deal: Each local area monopoly) appellant retained Alinta Asset Management Pty Ltd (now known as Jemena Asset Management Pty Ltd) (AAM) to carry out its obligations under what is referred to as the Advanced Interval Meter Rollout (AIMRO). A joint program was seen as an opportunity for the appellants, Jemena Electricity Networks (Vic) Ltd (JEN) and United Energy Distribution Pty Ltd (UED), to reduce the cost and the risk associated with meeting their respective rollout obligations. Mates rates: AAM is related to each of JEN and UED. JEN and AAM have the same holding company. That holding company also holds 34.1% of the shares in UED. The arrangement “the JEN agreement”. Clause 4 of the JEN agreement: In substance that work involves managing a program, and providing services, for the design, procurement, implementation and deployment of the AIMRO. - preparation of management plans - preparation of budgets’ - provision of core personnel to oversee the works, among them persons who are to be dedicated to the project - costs of a program director and program management officer. A cost-plus deal: The AAM Management Fee is [commercial-in-confidence]. Although the fee is described as a “management fee”, it comprises both a fee component to recover certain management costs and associated overheads, and a profit component. ...Log in to read rest of Article or image. |