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Can S4 HANA drive Utility AER Compliance?

Wednesday, 18 March 2020

Electricity Transmission and Distribution companies spend a significant amount of time each year translating data collected in the ordinary course of business into a form that can be reported in the Regulatory Information Notices (RINs) to the Australian Energy Regulator (AER). Can SAP S4HANA simplify this process and drive Utility AER Compliance? The short answer is yes.

Who is the AER / What are RINs?

The Australian Energy Regulator is part of the Australian Competition and Consumer Commission and essentially enforce the rules established to regulate the wholesale electricity and gas markets, in all jurisdictions except Western Australia.

The AER uses “Regulatory Information Notices (RINs) to collect information from the businesses we regulate. The information is gathered to allow us to undertake our regulatory functions, including monitoring outcomes against the determinations, developing performance reports and preparing for future determinations.”

There are 3 Annual RINs that collect operational and financial information that enable the AER to perform benchmarking analysis and prepare for future determinations. At the time of their regulatory determinations business typically every 5 years business submit a further RIN to assist in the determination of their revenue requirements for the forthcoming 5-year regulatory period.

RIN is more than just Management Reporting

Traditionally many businesses have used their ERP systems to collect data to assist with their operational and financial reporting. RIN reporting brings a new dimension to the traditional paradigm, as business must also capture transactional level data to support the regulatory requirements.

As we build up our ERP solution in an Australian Regulatory environment, we are required to consider the Management Reporting requirements from an operational and financial point of view; and determine how that data is collected, stored and retrieved through transactional processing. With the additional requirements of the RINs, much of the operational and financial data is aligned to the Management Reporting requirements and can form an adjunct to that information. The implementation teams must therefore formulate a design that results in a balance of collecting data for both requirements and yet not placing an onerous burden on the users.

SAP S/4HANA provides organisations with an opportunity to extend the data collected throughout the normal course of business without placing an undue burden upon the users.

The ‘universal journal’ provides opportunities for ‘extensibility’ either through the ledger or alternatively through account-based CO-PA to capture extra data elements that are readily accessible for reporting.

For example, the Category Analysis RIN contains a table related to Maintenance that is used to report operational and financial data related to maintenance of the network assets, from a routine and non-routine maintenance point of view. With the combination of maintenance order master data, equipment (asset) master data, statistical key figures and financial data collected through the day-to-day transactional processing much of the data to complete this table can be accessed through a real-time report based upon HANA CDS views.

The power of SAP S/4HANA can assist your business to meet your growing Management and AER RIN reporting requirements with a balanced approach.

Our Think180 Intelligent Regulatory Compliance and Analytics solutions for S/4 HANA can deliver immediate value to your RIN requirements and drive Utility AER Compliance.


By Peter Butler

Think180 Director