Dear Chair and Commissioners,
Ahead of our formal consultation response, we are writing to raise serious concerns about the AEMC’s draft determination on EV charging infrastructure.
The draft rule would enable the Commonwealth’s $40 million Accelerating EV Charging Program. It would allow distribution network service providers (DNSPs) to own chargers in regional areas and, where private operators do not take up metropolitan sites, install chargers as a provider of last resort and recover part of the costs from electricity consumers.
Australia needs more EV charging. We support action to improve access in regional areas and for households without off-street parking. We also support measures that make it easier for independent charging operators to connect and invest.
However, the AEMC has not yet established the case for network ownership funded through electricity bills. The prevailing international approach has been to use regulated utilities to facilitate charging deployment while preserving competition in the provision and operation of charging services.
Our key concerns are:
- The evidence does not yet establish that the draft rule is likely to advance the National Electricity Objective (NEO). The Commission may make a rule where it is satisfied that the rule is likely to contribute to the NEO; certainty is not required. But its conclusion still needs evidence proportionate to the costs and commitments imposed on electricity consumers. Without reliable estimates of charger use, additional EV uptake and emissions reductions, or a comparison of network and independent delivery costs, the draft determination has not adequately supported that conclusion.
- The AEMC’s own analysis does not show that network-owned kerbside charging will deliver enough benefit. It estimates that each charger would need to lead to 1.5 to 3.8 additional EV purchases but says it cannot conclude whether that threshold will be met. Electricity consumers should not be required to fund network-owned chargers when the Commission cannot establish whether their benefits will cover their costs. That is an insufficient basis for a rule intended to serve consumers’ long-term interests.
- A case for intervention is not a case for network ownership. Regional blackspots may warrant action, but the AEMC has not shown that DNSPs can deliver chargers more efficiently than independent providers. Nor does a private operator declining a site, by itself, demonstrate market failure.
- Consumers should not fund costs without proper scrutiny. The draft determination relies heavily on the Commonwealth tender process to discipline costs, rather than an upfront Australian Energy Regulator (AER) assessment of whether those costs are efficient. Customers who cannot afford an EV, do not own a car or live in a different area from the people using a charger would still have to pay. Nor is this simply a short-term trial: eligible DNSP assets could enter the regulated asset base, with cost recovery extending over their economic lives.
Competition encourages charging operators to choose safe, convenient locations with good amenities for EV drivers. This incentive is weakened when DNSPs can recover charger costs through electricity bills regardless of use.
Call to Action
Before making its final decision, we ask the Commission to:
- assess each part of the program separately;
- publish clear evidence of additional EV uptake, emissions reductions and consumer benefits from network-owned charging;
- demonstrate why network ownership is preferable to independent delivery or less intrusive alternatives; and
- focus on the barriers networks are uniquely placed to address: faster connections, clear information about network capacity and efficient access arrangements.
The level of concern across submissions should also give the Commission pause. Consumer groups, charging operators, retailers, councils and industry bodies have raised concerns about consumer funding, competition and ring-fencing. The draft determination should explain clearly why those concerns have been outweighed.
This decision is being made while the AEMC is separately considering the longer-term role of networks in EV charging. A temporary Commonwealth program should not create a precedent for expanding regulated network activities without strong evidence.
If the evidence cannot support network-owned kerbside chargers, that part of the final rule should be removed. Electricity consumers should not be asked to fund regulated investment unless the benefits are clear and the intervention is justified.
Read full statement here: Open letter to the AEMC Chair and Commissioners