Negotiating framework

In the Australian Energy Regulator’s (AER) final determination for ETSA Utilities 2010/11 - 2014/15, distribution services were classified into:

• direct control services;
• negotiated services; and
• unregulated services,

with direct control services being further sub-classified into:

• standard control services; and
• alternative control services.

The provision of negotiated services are subject to ETSA Utilities’ negotiating framework, which was approved (with minor amendments) by the AER in its final determination. The amended framework was detailed in Appendix C of the AER’s final determination.

The negotiating framework specifies the process by which applicants can negotiate the terms and conditions (including price) for the provision of the negotiated distribution service. Schedule 1 of the negotiating framework details the classification of negotiated services into individual negotiated services and price list services.

We have split negotiated services into two categories, which are:

• individually negotiated services (which are services for which an individual quotation, terms and conditions of supply and charges will be prepared and for which no indicative price is published by us in our Default Price List); and
• price list services, which are services for which an indicative price is given in the Default Price List published annually by ETSA Utilities.

In the case of price list services, the applicant can either:

• accept the default terms and conditions (including price) and the application will proceed on that basis; or
• the applicant can negotiate the terms and conditions (including price) and once the negotiation has been completed the application will proceed

The default prices have been developed on the basis of average prices for such services across our entire service area. If an applicant requests to negotiate a price for their specific service, the applicant is required, under the AER-approved negotiating framework, to pay a non-refundable fee prior to the negotiation proceeding. The negotiation fee will be based on our reasonable estimate of the cost to determine a price for the applicant’s specific service, and undertaking the negotiation. The fee is non-refundable and there will be a minimum charge based on minimum expected time to complete the negotiation, generally a few hours. As it is a tailored price for the applicant’s specific service, such negotiated prices may be higher or lower than the default price, depending upon the specific circumstances.

ETSA Utilities’ negotiating framework and price list services are detailed in the attachments below:

Negotiating framework July 2010

Network tariffs and negotiated services July 2010

N51 Connections and Construction terms

Connection and Supply contract