Endeavour Energy welcomes AER Regulatory Determination for 2024-2029

Key points

• As a regulated business, every five years Endeavour Energy proposes detailed plans on behalf of our customers for future investments, expenditure, service levels and tariffs. The AER assesses the efficiency of those plans and determines a capped revenue allowance for the 5-year period ahead.
• The AER has largely accepted the Endeavour Energy’s Revenue Proposal 2024-2029, determining that our plans balance affordability and service outcomes, and demonstrate efficient, value-for-money investments in innovation to serve our customers’ long-term interests.
• The Determination states that Endeavour Energy’s future service plans are supported by customers and stakeholders and have been informed by extensive and genuine customer engagement.

Sydney 30 April 2024: Endeavour Energy welcomes today’s Revenue Determination by the Australian Energy Regulator (AER) for the coming 5-year period from 1 July 2024 to 30 June 2029, and its acknowledgement of Endeavour Energy’s ongoing focus on balancing future service and investment plans with customer affordability.

The AER’s decision states: “Affordability and value for money for its customers has been a central theme throughout Endeavour Energy’s Proposal…Endeavour Energy’s revised proposal maintains the balance between affordability for its customers, while delivering on its expectations set out in its proposal.”

Endeavour Energy CEO, Guy Chalkley said, “Over the past three years of engaging with our customers and stakeholders, we have been single-minded in ensuring our continued focus on our customers’ interests. At a foundational level, that means affordability.  It also means maintaining a safe, resilient, reliable electricity network, servicing the growth of our communities, and increasingly facilitating new customer energy choices.

“The annual average price increase in electricity distribution services over the 2024-29 period is capped by the AER’s Determination at $26 for a typical residential customer and $46 for small-medium businesses, which represents an increase of approximately 1% in the customers’ total electricity bill, with distribution services comprising less than 25% of a customer’s total power bill,” he added.

“We know that cost of living is a key concern for our customers and have been working hard to keep our costs stable by tightly managing what we can control, keeping our part of customer bills as low as possible.”

Under the Determination, Endeavour Energy is permitted to recover $5.71B ($ nominal, smoothed) in revenue over the 2024-2029 period. The increase in revenue is driven by external economic factors, including the inflation rate influencing Endeavour Energy’s asset depreciation.

The AER’s final decision accepts Endeavour Energy’s revised total capital expenditure of $1.85B ($2023-24) for the 2024-29 regulatory period, and its revised total operating expenditure of $1.5B ($2023-24), determining that these revised proposals reflect prudent and efficient costs on behalf of our customers.

“Today’s determination is the outcome of three years of honest and rigorous engagement more than 1800 customers, informed stakeholders and the regulator, in which we have listened to their feedback and adapted our plans.

“We are pleased the AER has acknowledged our consistently authentic and transparent approach which resulted in a plan that customers and stakeholders could support and proposed services at a cost they told us was affordable.”

“We look forward to efficiently implementing our plans to deliver the reliable, resilient and sustainable future energy services our customers value.

“We remain committed to ongoing, high quality customer engagement, making agile responses that benefit our customers to the challenges and opportunities of the energy transition over the next five years.”

The AER’s Revenue Determination available here.

Background

• Every five years, Endeavour Energy is required to submit a plan to the Australian Energy Regulator (AER) that details our proposed service delivery and prices for the next five-year period.
• This Regulatory Proposal covers the period 1 July 2024 to 30 June 2029 and was required to be submitted to the AER by January 2023.

About Endeavour Energy

• Powers the lives of more than 2.7 million people, living and working in Sydney’s Greater West, central NSW, the Blue Mountains, Southern Highlands, Illawarra, and South Coast of NSW.
• Our electricity supply area includes one of the fastest growing regions in Australia, with 3 million people and businesses living in Sydney’s Greater West by 2029.
• We are working with our customers to support the transition to a modern grid, where solar, batteries, microgrids and smart meters will support the shift to a low carbon environment.
• Endeavour Energy is an electricity distribution network.  Distribution is part of a larger energy supply chain that includes generation, transmission and retailers.
• Distribution charges make up less than one quarter of the customer’s total energy bill, with the remainder including generation, transmission, government subsidies and retailer costs.