AUSTRALIAN COMPETITION TRIBUNAL Application by Ergon Energy Corporation Limited (Labour Cost Escalators) (No 9) [2011] ACompT 3 Citation: Application by Ergon Energy Corporation Limited (Labour Cost Escalators) (No 9) [2011] ACompT 3 Review from: Australian Energy Regulator Parties: ERGON ENERGY CORPORATION LIMITED (ACN 087 646 062) File number: 3 of 2010 Members: MIDDLETON J (DEPUTY PRESIDENT), MR R DAVEY AND MR R SHOGREN Date of determination: 10 February 2011 Date of hearing: 15, 16, 17, 19 and 22 November 2010 Place: Melbourne Number of paragraphs: 6 Counsel for Ergon Energy Corporation Limited: Mr P O'Shea SC with Mr Bradley Solicitor for Ergon Energy Corporation Limited: Minter Ellison Lawyers Counsel for Australian Energy Regulator: Mr P Hanks QC with Mr P Gray, Mr T Clarke and Mr L Merrick Solicitor for Australian Energy Regulator: Corrs Chambers Westgarth IN THE AUSTRALIAN COMPETITION TRIBUNAL FILE NO 3 of 2010 RE: APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A DISTRIBUTION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO ERGON ENERGY CORPORATION LIMITED PURSUANT TO RULE 6.11.1 OF THE NATIONAL ELECTRICITY RULES BY: ERGON ENERGY CORPORATION LIMITED (ACN 087 646 062) MEMBERS: MIDDLETON J (DEPUTY PRESIDENT), MR R DAVEY AND MR R SHOGREN DATE: 10 FEBRUARY 2011 PLACE: MELBOURNE REASONS FOR DECISION: (LABOUR COST ESCALATORS) INTRODUCTION 1 The Tribunal gave reasons in respect of labour cost escalators dated 24 December 2010. 2 Joint submissions by the parties have been received relating to those reasons by letter dated 27 January 2011. 3 In essence, the parties point to some findings made in paragraph [61] of those reasons as to: (a) the submission attributed to Ergon Energy as to the inflation rate to be applied to 2011 (2010-11); (b) the appropriate inflation rate for 2010-11 to be applied in converting the nominal escalator to a real escalator; and (c) the value of the real escalator produced by that conversion. 4 Having considered the joint submissions from the parties, the Tribunal agrees with the parties contentions contained therein. 5 An inflation rate of 2.5% should be applied for 2010-2011, for consistency with the cost escalator modelling framework in the Determination. This would produce a real increment of 1.95% for 2010-2011. 6 The Tribunal requests that the parties prepare minutes of the appropriate determination in light of the above reasons. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Middleton (Deputy President), RC Davey and RF Shogren. Associate: Dated: 10 February 2011