Values of Customer Reliability consultation paper

PIAC responded to the Australian Energy Regulator’s (AER) consultation paper on Values of Customer Reliability (VCR). The VCR represents the values different customers place on having a reliable electricity supply and is determined by the AER. The VCR has long been a key element of NEM energy market frameworks, and how it is determined and applied is of increasing importance.

PIAC supports the AER having responsibility for developing VCR values and considers the AER values should be the default. AEMO’s VCR guidelines are a useful reference point, but further work is required.

PIAC considers the AER will need to employ different, and necessarily more complex, approaches to understand contemporary VCR as VCR is increasingly being applied in circumstances and at a level of granularity which were not anticipated, and for which it was not designed.

PIAC recommends the AER should develop a guideline for the application of VCR and that it should seek changes to the National Energy Rules to provide stronger guidance for industry.

PIAC considers in producing the VCR, the AER should seek to better understand consumer preferences on a range of reliability related issues.