TransGrid has finalised its transitional business plan and revenue proposal for 2014/15 and submitted it to the Australian Energy Regulator (AER).
TransGrid operates the NSW and ACT high-voltage transmission network. As a regulated monopoly, the company applies for funding approval to the AER. The 2014/15 transitional revenue proposal sets out the indicative expenditure and revenue that TransGrid requires to effectively manage its operations.
Peter McIntyre, TransGrid’s Managing Director, said that the company has worked hard to pursue efficiencies, implement continuous improvement programs, manage costs and defer capital expenditure.
“These achievements will benefit all consumers with our forecast revenue growth for the next 5 years constrained to CPI or less,” said Mr McIntyre.
“We understand that every dollar is important and that recent electricity price rises have added to household and business financial pressures, so that’s why we have deferred over $600 million of capital expenditure in response to changes in electricity demand patterns.”
“Bill payers will directly benefit from these decisions in this revenue proposal, with forecast revenue over the next five years $230 million lower due to the deferrals. This means lower transmission costs passed on to the bill payers of NSW and the ACT,” Mr McIntyre said.
TransGrid’s proposed transitional revenue for 2014/15 is $930 million. This takes into consideration the outlook over the next five years and represents the smoothest revenue path for customers.
“We understand that consumers are concerned about the cost of electricity, and with transmission at approximately 7% of the household electricity bill, we have worked hard to ensure that we are accountable for our proportion of the bill,” said Mr McIntyre.
“I believe that consumers should pay no more than necessary for their electricity supply that’s why I’m committed to running TransGrid in an efficient and responsible manner,” he said.
Indicative capital expenditure for 2014/15 is $375 million with capital expenditure for the next 5 years forecast to be around 20% lower than the current period.
“TransGrid is aware of the pressure electricity prices place on consumers and even with an extensive program to replace some of our aging assets we have been able to keep our capital expenditure lower that previous years.” Mr McIntyre added.
The transitional revenue proposal provides indicative estimates only with the full and final proposal being submitted to the AER in May 2014. The AER is expected to release its draft determination in November 2014 and its final determination in April 2015.
Full details of TransGrid’s transitional revenue proposal for 2014/15 can be viewed in the Have Your Say site.