Electricity transmission sector performance report

The Australian Energy Regulator has today issued the 2009-10 electricity performance report for transmission network service providers (TNSPs) in the National Electricity Market (NEM).

The TNSPs covered in the report are:

  • ElectraNet
  • Ausgrid
  • Powerlink
  • SP AusNet
  • Transend
  • TransGrid
  • Directlink, &
  • Murraylink.

TNSPs manage the high voltage lines that transmit electricity to cities, towns and across state borders within the five interconnected jurisdictions of the NEM –South Australia, Victoria, Tasmania, NSW and Queensland. Large users of electricity such as aluminum smelters typically connect directly into the transmission network.

Transmission network charges generally make up about 10 per cent of a household customer's bill, but a much bigger proportion of a larger customer's electricity costs.

As electricity transmission networks are natural monopolies, the AER controls the TNSPs' maximum allowed yearly revenues.

The performance report provides information on the financial performance and reliability of transmission networks managed by the TNSPs and how they are performing in comparison to performance targets. This informs the public and increases accountability for performance outcomes.

AER chairman Andrew Reeves said three trends were identified in the 2009-10 report, similar to those in the 2008 -2009 report.

“First, service standards, which include the availability of the network to transport electricity and interruptions to supply, continue to improve, with most TNSPs' outperforming relative to historic trends. This reflects changing operating practices to be more attuned to customer and market needs. As a result, businesses have been rewarded with service standards incentive payments totaling $23 million for the 2010 calendar year.”

“Second, while capital expenditure was 6 per cent lower in 2009-10 than the previous year, this expenditure still remains at historically high levels primarily reflecting strong investments by TNSPs to meet increasing demand and to replace ageing networks to meet network performance requirements. Total capital expenditure during the past five years has exceeded $5 billion.”

“Third, TNSPs continue to earn commercial returns with the aggregate profits of TNSPs increasing to $460 million in 2009-10. Since 2002-03 TNSPs have continually recorded stable return on assets of between 7.4 and 8.2 per cent.”

Mr. Reeves said these results show that businesses are continuing to deliver higher service standards and meet demand through improving operations and investing in their networks.

In publishing the report, the AER took into account confidentiality considerations and comments from TNSPs.

Sector: 
Segment: 
Issued date: 
8 February 2012
AER reference: 
NR 003/12
Contact: 
Duncan Harrod, Media unit (02) 6243 1108 0408 995 408
Infocentre general enquiries 1300 302 502 AERInquiry@aer.gov.au