Strong transmission investment continues: Fifth electricity regulatory report

The fifth electricity regulatory report covering transmission network service providers in the National Electricity Market was issued today.

Australian Energy Regulator, Chairman, Mr Steve Edwell, said the AER report aims to provide transparency about the financial and operational performance of the transmission businesses.

The report provides revenue, profit, expenditure and service standards information on each transmission business for the 2006/07 reporting year.
The businesses covered are Directlink, ElectraNet, EnergyAustralia, Murraylink, Powerlink, SP AusNet, Transend, TransGrid and VENCorp.

Mr Edwell said three main trends were identified in the 2006/07 report.

"First, capital expenditure is relatively high. Total expenditure over the past five years is close to $3.2 billion, and was almost 23 per cent higher than forecast for 2006/07.

"Second, operating and maintenance expenditure stands at almost $1.8 billion during the past five years and is close to forecast levels for the 2006/07 year.

"Third, service standards are improving, with most transmission businesses outperforming against their historic levels. The businesses have been rewarded with service standards incentive payments totalling almost $3.9 million for the 2006 calendar year.

"These trends indicate that transmission businesses have responded to increases in summer peak demand. Further, solid investment and service standards results are being achieved with relative stability in transmission charges."

Mr Edwell said overall, these trends are encouraging, however there is room for further improvement.

"The AER has introduced a new market impact measure in the service standards regime that will place incentives on TNSPs to better manage network outages and minimise the affect of outages on spot prices. This regime will ensure that TNSP service performance will continue to improve."

In publishing the report, the AER took into account confidentiality considerations and comments from the transmission networks. The full report will be posted on the AER website.

The AER report builds on work undertaken by the Australian Competition and Consumer Commission in previous reports.

Background

*Electricity transmission is the high voltage wires network between towns, cities and states used to transport electricity from generators to distributors. Electricity distribution, by contrast, is typically lower voltage radial networks that transport electricity from the transmission take off points to end household and business users. In a few cases large businesses are directly connected to the transmission system (eg aluminium smelters).

Sector: 
Segment: 
Issued date: 
11 August 2008
AER reference: 
NR 012/08
Contact: 
Steve Edwell, AER Chairman 03 9290 1421 0423 047 554
Brent Rebecca, Media 02 6213 1317 0408 995 408
Infocentre general enquiries 1300 302 502 AERInquiry@aer.gov.au