SA Power Networks has lodged a Revised Regulatory Proposal with the Australian Energy Regulator (AER). The proposal will hope to determine the revenue required to manage the SA electricity distribution network through 2015-2020.
The Revised Proposal ensures continued efficient and sustainable delivery of distribution services in the long term interests of customers.
Stakeholder Relations Manager, Paul Roberts, said, “We need to keep the electricity network delivering on the expectations of South Australians who want a reliable, safe and robust network that is ready to support their investments in new energy technologies, including solar and battery storage, in coming years.
“The Revised Proposal includes many initiatives identified through our comprehensive Customer Engagement program that were not approved in the AER’s Preliminary Determination,” said Mr Roberts.
These initiatives include:
- Changes to tree trimming around power lines to achieve more balanced outcomes between legislated clearance obligations and community expectations
- The undergrounding of power lines supplying bushfire safer places
- Investment in improving reliability for poorly served regional customers, consistent with the standards established by the Essential Services Commission of South Australia
- Investment to facilitate customers’ growing use of solar panels and new energy technologies such as battery storage and electric vehicles.
“We are also seeking to ensure that we have the funding required to meet our legal and risk management obligations under the Electricity Act, including those for bushfire mitigation.”
Mr Roberts said that the key financial settings for the funding of the business, including depreciation, rate of return and tax allowances are also addressed in the Revised Proposal.
“We believe that the positions on depreciation, the rate of return and tax matters adopted in the AER’s Preliminary Determination are inconsistent with the National Electricity Rules, the independent advice received by the AER itself, and precedent decisions of the Australian Competition Tribunal.
“The AER’s own benchmarking found us to be the most efficient electricity distributor on a state-wide basis. In that context, its decision to reduce our overall revenue by some 28 per cent on the current period from 2010 to 2015 doesn’t make sense.”
Mr Roberts said the Revised Proposal delivered a greater reduction in average distribution prices to customers of about 8 per cent compared to the original proposal submitted by SA Power Networks last October (which would have delivered about a 4 per cent reduction).
“Under the Revised Proposal, residential electricity customers will pay less in real terms in 2019/2020 for distribution network services than they did in the 2014/2015 financial year.
“As always, the final outcome for customers will depend on the final determination of the Regulator and whether retailers pass on the full reductions,” said Mr Roberts.
Customers are encouraged to participate in the AER’s consultations prior to its final decision due on 31 October 2015. View the SA Power Networks Revised Regulatory Proposal.