PIAC made a submission to the AER’s consultation on Distribution Network Service Provider (DNSPs, AKA energy networks) expenditure on Information and Communication Technology (ICT).
Good ICT is important for network security and business efficiency and efficacy. We generally support investment in this area but think it needs to be assessed carefully to avoid costs to consumers that outweigh the benefit.
ICT expenditure is currently assessed the same as any other DNSP expenditure. In our submission, we recommend the AER look for methods of assessing that are fit-for-purpose, even if they aren’t in line with the current framework.
We also provided feedback on a number of other related matters:
- We support the AER having the discretion to ensure operating cost savings resulting from ICT investment are incorporated into expenditure proposals so they are not double-recovered through incentive schemes.
- We support the onus being placed on DNSPs to provide justification that their proposed ICT expenditure is both necessary and prudent.
- We also support DNSPs conducting post-implementation reviews of their ICT investments and sharing these with the AER and stakeholders.