Australian Energy Regulator Public Forum TransGrid and Directlink electricity transmission revenue proposals 10 July 2014

Agenda pmAER introduction - Andrew Reeves, Chairman AER pmTransGrid presentation pmAEMO presentation pmConsumer Challenge Panel (CCP) presentation pmDirectlink pmQ&A pmAER wrap-up - Jim Cox, Board Member, AER 2

Process to date AEMC rule change determination on 29 Nov 12 Deferral of full regulatory determination process for the TransGrid next regulatory control period Better Regulation guideline process in 2013 Placeholder revenue allowance for a transitional regulatory control period (1 Jul 14 to 30 Jun15) in March TransGrid Receipt of regulatory proposals 31 May 2014 Publication of proposals 20 June 2014 Publication of issues paper 8 July

Purpose of the public forum TransGrid and Directlink to present their proposals Presentation by AEMO Allow consumers and their representatives to ask questions of the businesses about their proposals Consumer Challenge Panel to present some initial views on the proposals Outline the process from here 4

How does the proposal affect consumers - TransGrid r 5

How does the proposal affect consumers - Directlink 6

AER approach Our analysis of the revenue proposal will necessarily consider each of the revenue components and any inter-relationships between these components as we must decide the businesses revenues as a whole. In assessing the proposed revenue, we will have regard to our ‘Better Regulation’ Guidelines, including: ◦For capex and opex we will have regard to our Expenditure Assessment Guideline – and the results from our first benchmarking report ◦For the cost of financing (require rate of return) we will have regard to our Rate of Return Guideline We will be interested in hearing consumer views on consumer engagement initiatives (including engagement on its proposed changes to the pricing methodology)

Presentations from TransGrid, Directlink, AEMO and Consumer Challenge Panel 8

AER wrap-up Jim Cox, AER board member 9

How to make submissions We are seeking submissions on TransGrid and Directlink’s proposals The issues paper is designed to draw attention to the important issues It is helpful if submissions are supported by evidence and analysis Submissions will be published on our website Submitters must provide both a public and (where applicable) confidential version of their submissions Submissions due by 1 August

Next steps 11 TaskDate Stakeholders submissions on revenue proposals close1 August 2014 AER issues draft decision30 November 2014 TNSPs submit revised revenue proposalsJanuary 2015 Stakeholder submissions on revised revenue proposals close Late February 2015 AER issues final decision30 April 2015

Key contact details Central mailbox: Central mailbox: ◦ ◦ Project director: Project director: ◦ ◦ (03)