Contestable costs in the electricity industry refer to expenses or expenditures associated with elements of a project or service that are open to competition among multiple providers or contractors. These costs can vary depending on the specific project or context and often include expenses related to design, construction, installation, maintenance, and other services that can be offered by different companies through competitive bidding processes.
For example, in a large electrical infrastructure project, contestable costs might encompass expenses related to the design and installation of substations, power cables, or metering systems. By allowing multiple companies to bid for and provide these services, contestable costs aim to encourage cost-efficiency and innovation in the industry. This competitive approach can potentially result in cost savings and improved service quality for consumers.