ALMONDCO AUSTRALIA LIMITED ABN 81 062 887 352 STURT HIGHWAY, PO BOX 1744, RENMARK, SA, 5341 TELEPHONE 08 8586 8800 FACSIMILE 08 8595 1559 EMAIL: admin@almondco.com.au

8th July 2015

Mr Sebastian Roberts

General Manager, Network Regulation

Australian Energy Regulator

GPO Box 520

Melbourne Vic 3001

Dear Sebastian,

On 22nd June our company tendered its letter of support to the AER for its original determination in relation to the five year Reglatory Proposal submission by SA Power Networks. In our letter of support we acknowledged that SAPN must be granted ‘fair’ grounds to calculate future cost structures and return on investment percentages but it was our opinion that such methodologies in their original proposal did not reflect current economic realities.

As expected SAPN have appealed the AER’s original determination based on a range of ‘technical’ interpretations, some admittedly being beyond our level of understanding. It would appear to us that they have disregarded many of the AER’s original determination recommendations and, as a consequence, are continuing with funding programs that themselves have little to no economic payback or risk mitigation purpose. The fact remains that their revised proposed increases for network supply charges to customers in years 2 and 3 of this 5 year regulatory period are in double digits – unprecedented in current economic terms. The real business world, operating in a competitive open market environment, would be scoffed at if attempting to pass on similar increases under current trading conditions.

Again we strongly urge the AER to apply caution when delivering their final determaination in relation to the Revised Regulatory Proposal submitted by SAPN. Our business fully supports a ‘fair’ review but strongly recommend that this be done in the context of the submission being prepared against a ‘competetive market backdrop’ which we fear may not be the case.

Yours Faithfully

Brenton Paige

Group Operations Manager

Almondco Australia Limited