The Australian Energy Regulator QLD Electricity distribution determination 2015–2020 Meeting with FNQ consumers/stakeholders 15 January 2014

TOPICS Welcome Role of the AER Qld electricity determination ◦ Reset timeline ◦ Framework and approach (F&A) Future engagement Questions 2

Electricity supply chain $$ Generation Customers Retail GWh Retailer pays Generator for Energy Retailer pays Distributor for Delivery of Energy Distributor Transmission Distributor pays Transmission for Delivery of Energy via Transmission Network AEMO Electricity Trading Pool Energy purchasing Sales Billing/payment processing Inquiries Customers pay Retailer for “bundled” service of delivered energy. Network Activities Transmission & Distribution The AER’s electricity reset for 2015–20 deals with the distribution network only.

NATIONAL ELECTRICITY OBJECTIVE “…to promote efficient investment in, and use of, electricity services for the long term interests of consumers of electricity with respect to: price, quality, reliability and security of supply and the safety, reliability and security of the national electricity system.” - National Electricity Law 4

OUR GOALS Promoting efficient investment and operation of energy networks Build consumer confidence in energy markets Promote competitive and efficient energy markets Strengthen stakeholder engagement in energy markets and regulatory processes 5

WHY ARE CONSUMERS IMPORTANT? AERConsumersBusinesses 6

QLD RESET PROCESS We are responsible for regulating the revenues Energex and Ergon Energy may earn. We conduct revenue resets every five years We have commenced the QLD reset process for 2015–2020 7

WHAT’S DIFFERENT THIS TIME Improve the AER’s ability to determine network prices so consumers don’t pay more than necessary for the services they require 2012 Rule changes Updating and improving the AER’s processes under the new Rules Seven new guidelines e.g. consumer engagement, expenditure incentives Better Regulation Program Transitional arrangements applied to the classification of services, control mechanism, incentive schemes. End of transitional arrangements 8

TIMELINES 9 Dec 2013 Preliminary positions F&A 30 April 2014 F&A published 31 Oct 2014 Businesses submit regulatory proposals Jan/Feb 2015 Submissions on regulatory proposals close April 2015 AER publishes preliminary determination June 2015 Revised regulatory proposals submitted 1 July 2015 Submissions on revised regulatory proposals close 31 October 2015 AER publishes final determination

QLD F&A | WHY IS IT IMPORTANT? Provides an opportunity for you to have a say in: ◦ which services to regulate (classification) ◦ meter bundling ◦ public lighting ◦ price controls (control mechanisms) ◦ incentive schemes 10

QLD F&A | GOING FORWARD Published December Available at Preliminary F&A Close on Wednesday 19 February 2014 Submissions on the preliminary F&A Must be published by 30 April We expect to publish early April. Final F&A 11

FURTHER CONSULTATION What do you want to know? How can we assist? Contact: or Moston Neck Robyn Lowien

QUESTIONS? 13