Techno-economic masterstroke - CutlerMerz supports several networks to satisfy the Australian Energy Regulator’s expectations
CutlerMerz has successfully combined expertise in the areas of asset management, economics, statistics, and software engineering to create an electricity network risk vs expenditure model. The model was used to support several network service providers (NSPs) in their recent and ongoing interactions with the AER.
In recently releasing the draft determinations for Evoenergy and Essential Energy, the AER mentioned it was 'encouraged' by the approach adopted where CutlerMerz successfully applied a top-down assessment to the replacement expenditure forecast. Further, the AER’s consultant noted that Essential Energy’s entire replacement expenditure forecast was prudent and efficient, as supported by CutlerMerz’ risk versus expenditure modelling.
Workshops held between NSP asset managers and CutlerMerz consultants, which were aided by the CutlerMerz techno-economic risk vs expenditure model, identified specific areas where expenditure profiles could be optimised. By documenting the workshop outcomes, and detailing the resultant adjustments to the expenditure forecast, the top-down challenge delivered on the AER’s expectations.
The AER was satisfied that the forecasts included sufficient efficiency and synergy gains and that the top-down assessments supported the determinations that the repex forecasts were prudent and efficient.
