The Australian Energy Regulator (AER) has released its final decision on the gas access arrangement that will apply to APA’s Victorian Transmission System (VTS) for the period 1 January 2023 to 31 December 2027.
The decision allows APA to set gas network charges for the VTS which are expected to result in the recovery of $702.2 million from its consumers over the five-year access arrangement period. This is $4.3 million (0.6%) more than presented in APA’s revised proposal. This is because movements in market variables such as interest rates, bond rates and expected inflation are currently acting to increase regulated revenues. Updates for these movement are a standard part of our decision making process.
Importantly, the final decision confirms our acceptance of forecast expenditure for key investments in the Western Outer Ring Main and the installation of a second compressor at Winchelsea to mitigate the risk of forecast supply shortfalls in Winter 2023.
The expected revenue APA may recover from consumers comprises around 2% of a typical bill for residential customers and around 3% for small business customers. We estimate that by 2027 this final decision will increase the average annual retail gas bill by $14 (1%) for residential consumers and $119 (1.3%) for small business customers.