Regulatory and Market Support
Our consultants operate throughout the regulatory cycle and have assisted numerous gas and electric utilities in preparing responses to the AER for regulatory determinations. In addition to this we have done several public domain reports for the Australian Energy Market Commission and Australian Energy Market Operator.
Our consultants operate throughout the regulatory cycle and have experience in assisting on regulatory responses for network businesses with our work breaking down into 3 main areas:
- Expert Inputs on Submissions
- Business Case Assessments
- Review of Regulatory Submissions
Our work includes supporting documentation for initial submissions to the AER as well as response documents to resolve challenges that the AER may have raised in their draft response. We have been successful in assisting our clients in securing significant increased funding between the draft and final determination.
DGA Consultants are recognised as leading experts in Operational Technology (OT) with a comprehensive knowledge of the solutions being applied in different utilities. Given this knowledge we have been requested by utilities to confirm that their planned OT policies and solutions are in line with industry standards and represent best practice. This assists in justifying the need for investment in new/replacement solutions and providing defendable evidence that can be assessed by the regulator on the need for a particular solution.
Increasingly the Australian Energy Regulator relies on a business case showing positive net market benefits for investments requested by a utility. To align with these expectations DGA Consulting work with utilities to demonstrate the societal benefits that can be derived from their investments. These business cases are highly transparent and demonstrate how the costs and benefits of any potential projects build up, the stakeholders that benefit and the key variables that could impact on a positive business case.
The aim of the analysis is to demonstrate to the regulator how consumers will ultimately gain from any investments justifying its inclusion in the Regulated Asset Base. To help with demonstrating these benefits, DGA Consulting typically undertake sensitivity and monte-carlo analysis to reflect the uncertainty associated with key parameters in the model. This allows us to demonstrate the probability of the solution having positive net market benefits and any key parameters that could impact the business case. An example is shown in the chart below.
DGA Consultants have been asked to review planned submissions to the AER covering IT and OT and includes providing feedback on:
• Alignment of justification with regulatory requirements
• Review of costs and benefits for the projects
• Strengthening of justification for the projects
• Any inconsistencies between planned projects
This could involve several iterations to end up with a stronger and consistent set of business cases to provide product justification that is accepted by the AER.