AER explains why it disagrees with Australian Competition Tribunal ruling on on increased Victoria meter tariffs

First 10 of 10 paragraphs shown The AER was to refuse fees paid to related party to undertake the AMI rollouts; and define these as non-contract costs under the commercial standard test.
Review of the Victorian DNSPs' related party margins: The AER said it would now review of the Victorian DNSPs' related party margins and management fees generally as part of the upcoming distribution price review for 2011-15, which includes “broader considerations on the efficiency of such margins”.
Re-examination of associated contracts: The AER said it had closely re-examined the associated contracts in light of comments in submissions, and maintained its position in the draft determination that it was unable to conduct an efficiency assessment of these costs under the revised Order, particularly given the complexities involved in establishing a notional 'commercial standard' and determining 'substantial' departures from this standard.
Under the microscope: In reaching this conclusion the AER said it had closely reviewed the contracts between CP/PC and CHED Services, and between JEN/UED and AAM in relation to services associated with the AMI rollout.
Way to make more money for nothing? In both cases, the DNSPs' engaged their related party to undertake the AMI rollouts on their behalf, and perform all procurement, solution selection and project management required to achieve the AMI rollout obligations. In providing services to meet the DNSPs' rollout obligations, the related parties charge the DNSPs a margin on top of incurred costs.
SP Ausnet an exception: While SP Ausnet engaged some related parties to provide services as part of the AMI rollout, the AER did not identify any margins or management fees associated with SPI's related party contracts.

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