TransGrid has committed to a new business plan to reduce total capital expenditure by 28 per cent in response to the rapidly changing environment of the energy industry.
“If we compare our future plans against the current regulatory cycle, it will show that we have kept to our ongoing commitment to build only as a last option,” said TransGrid Managing Director Peter McIntyre.
In the electricity transmission network’s five-year revenue proposal to the Australian Energy Regulator (AER), TransGrid has contained forecast revenue growth to no more than the Consumer Price Index (CPI) providing real benefits for consumers.
In response to the changing energy environment and demand expectations, total capital expenditure is forecast to be down on the previous period – by 28 per cent.
With the energy market evolving like never before, TransGrid is transforming its operations to effectively and efficiently meet this changing environment. In the past five years, TransGrid has deferred more than $600 million of capital expenditure in response to these significant shifts in electricity demand patterns.
Operational efficiencies have also led to a cost saving of about $6 million annually.
As a regulated network service provider TransGrid is required to submit a revenue proposal to the AER in advance of each regulatory control period. This sets out the forecast expenditure and revenue for the upcoming regulatory control period that is required to meet the organisation’s objectives.
TransGrid is responsible for the safe, reliable and efficient supply of electricity to more than 3 million households across the state.
“Electricity transmission makes up about 7 per cent of the average household power bill and we certainly understand that every dollar is important, so this is why we are working so hard to minimise the price impact on all energy users,” Mr McIntyre said.
TransGrid is the major electricity transmission network service provider in New South Wales and the Australian Capital Territory and is recognised as the backbone of the National Electricity Market, enabling energy trading between the three largest states along the east coast and supporting the competitive wholesale electricity market.
Its network transmits electricity from generators to directly connected large energy users and distribution networks, which in turn distribute electricity to local households and businesses.
“We are pleased that in this proposal we have outlined how TransGrid will adapt our planning processes, respond to changing energy consumer demand and focus on non-network options rather than building new assets, in order to ensure the safe, reliable and efficient supply of electricity,” Mr McIntyre said.