Value of Customer Reliability

What is the Value of Customer Reliability?

In dollar terms, the Value of Customer Reliability (VCR) represents a customer's willingness to pay for the reliable supply of electricity. The values produced are used as a proxy, and can be applied for use in revenue regulation, planning, and operational purposes in the National Electricity Market (NEM).

In network planning, AEMO uses the VCR to assess the economic merits of carrying out additional investment in the electricity network. It is important that the VCR figures accurately reflect the value of reliability across a range of customers.

VCR Fact Sheet

The VCR Fact Sheet gives an overview of the VCR's meaning, how it was developed, and the resulting figures and relevance for network planning.

VCR Fact Sheet
10 Nov 2015 | 424 KB (.pdf)

Value of Customer Reliability review

After a request by the Standing Council of Energy and Resources (SCER) (which from December 2013 became the Council of Australian Government (COAG) Energy Council), AEMO reviewed the Value of Customer Reliability (VCR) during 2013–14.

The review aimed to improve understanding of the levels of reliability customers expect, and to produce a range of VCR values for residential and business customers across the NEM.

The VCR review commenced on 11 March 2013 with the publication of the Issues Paper. All papers published as part of the VCR review, including stakeholder submissions received, are below.

Value of Customer Reliability final report
28 November 2014
Value of Customer Reliability final report appendix
28 November 2014  
Value of Customer Reliability Updated Statement of Approach
07 March 2014
Value of Customer Reliability Statement of Approach
11 November 2013
Value of Customer Reliability Directions Paper
3 June 2013
Value of Customer Reliability Issues Paper
11 March 2013 

VCR application guide

To accompany the VCR review results, AEMO published the VCR application guide in 2014. The VCR application guide provides stakeholder guidance on the current and potential application of the results of the VCR review. The final report document incorporated feedback following stakeholder consultation on the draft report.

Application Guide: Final Report
23 December 2014 | 1.84 MB (.pdf)
Application Guide: Draft Report
13 October 2014 | 1.5 MB (.pdf)

Submissions to VCR application guide

ActewAGL Energy Supply Association of Australia
GreenSync Grid Australia
Major Energy Users Inc. Networks NSW
United Energy Victorian Electricity DNSPs
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