Revenue Proposal 2019–2023

ElectraNet’s formal Revenue Proposal 2019–2023 was submitted to the Australian Energy Regulator (AER) on 28 March 2017, outlining our expenditure plans and revenue requirements for the five year period commencing 1 July 2018.

ElectraNet has proposed significant reductions in costs, while maintaining a safe, secure and reliable transmission service.

The Revenue Proposal is built on the extensive engagement we have undertaken with our customers and stakeholders to date, and reflects their feedback and input. We’ve already lead the industry with our Preliminary Revenue Proposal and early engagement program.

The Revenue Proposal 2019–2023 will now undergo formal assessment and public consultation before a decision is made by the Australian Energy Regulator in early 2018.

Our proposals are explained in our Revenue Proposal Overview and accompanying information sheets which provide an overview of our RP, as well as the proposed capital and operating expenditure programs.

Further information on the full Revenue Proposal and AER assessment process is available on the AER’s website

We’d be interested to hear what you think about our Revenue Proposal.

Feedback can be provided as follows:

• Complete the feedback form
• Email mailto:consultation@electranet.com.au
• Send feedback marked “Revenue Proposal” to Simon Appleby, Senior Manager Regulation and Land Management, PO Box 7096, Hutt Street PO, ADELAIDE SA 5000
• Call us on 1800 243 853

 

Preliminary Revenue Proposal

The formal Revenue Proposal builds on ElectraNet’s Preliminary Revenue Proposal (PRP) released in September 2016, which presented our indicative expenditure plans. The PRP was developed to promote effective early engagement with our customers and other stakeholders, develop shared understanding and facilitate feedback to help shape our formal Revenue Proposal.

ElectraNet’s 2016 annual transmission network stakeholder forum provided an overview of the Preliminary Revenue Proposal, together with the Network Vision which outlines the directions and priorities for the transmission network, and Customer Insights Report, which outlines the feedback gathered through the first phase of our engagement program. View the presentation to see what was covered.

 

Revenue Determination Process

Every five years, ElectraNet submits a Revenue Proposal to the Australian Energy Regulator (AER), which outlines the program of work and forecast revenue required to maintain and operate a safe, reliable and efficient transmission network.

The AER uses a range of evidence to review and assess the Revenue Proposal, including historic trends of past costs, benchmarking against comparable businesses and expert advice. Once the AER has independently reviewed our costs and investment plans it sets the maximum revenue we are allowed to earn for the regulated services we provide. Transmission prices are then set to recover this revenue from customers using a methodology approved by the AER.

We have implemented a detailed early engagement program to help us understand the views and priorities of South Australia’s electricity customers. This input is reflected in our plans and Revenue Proposal for the 2019–2023 regulatory period. More information is available from our Consumer Engagement information sheet.

ElectraNet is committed to genuine and ongoing engagement with electricity customers. We continue to use a range of methods to engage with our customers and stakeholders, including our Consumer Advisory Panel.

Read our Customer Engagement Outcomes Report to find out more about how we have incorporated findings and input from our stakeholder engagement into our Revenue Proposal. You can also find out more about the responses and input we received:

 
 

Framework and Approach

ElectraNet must notify the AER of the need for the Framework & Approach (F&A) process. The notification is to include ElectraNet’s approach to the application of a number of guidelines and schemes for the next regulatory control period.

 

 

Draft F&A published

The AER publishes a position paper on a draft F&A for consultation. This sets out the AER’s proposed approach to the application of the following:

  • Service Target Performance Incentive Scheme
  • Expenditure Efficiency Benefit Sharing Scheme (EBSS) and Capital Expenditure Sharing Scheme (CESS)
  • Expenditure forecast assessment guidelines
  • Whether depreciation will be based on forecast or actual capital expenditure in updating the regulatory asset base
 

Expenditure Forecast Methodology

ElectraNet advises the AER of its approach to forecasting capital and operating expenditure.

Expenditure Forecast Methodology

 

Preliminary Revenue Proposal

ElectraNet releases its Preliminary Revenue Proposal (PRP) which will focus on capital and operating expenditure forecasts, and provide an indicative revenue and price path outlook for the 2019-2023 regulatory period.

 

Consultation on the Preliminary Revenue Proposal

Stakeholders will be invited to provide feedback on the PRP.

 

Revenue Proposal

ElectraNet’s Revenue Proposal (RP) outlines the program of work (capital and operating expenditure forecasts) and forecast revenue required to maintain and operate safe, reliable and efficient network services. The RP must meet the long-term needs of electricity customers.

 

Issues Paper

The AER publishes an Issues Paper in which it identifies early key issues likely to be relevant to its assessment. This includes a ‘first pass’ assessment indicating its preliminary view on ElectraNet’s RP.

 

Public Submissions on Revenue Proposal and Issues Paper

The Revenue Proposal and Issues Paper are published for public consultation.

 

Public Forum

The AER and their Consumer Challenge Panel present the early issues to stakeholders and discuss how they can provide input into the process. ElectraNet is provided the opportunity to give a summary of the RP.

 

Draft Determination

The AER uses a range of evidence to review and assess the RP, including historic cost trends, benchmarking against comparable businesses and expert advice. The Draft Determination (DD) includes the draft total capital and total operating expenditure forecasts, and the draft revenue the AER considers efficient, taking into account stakeholder consultation feedback.

 

Pre-Determination Conference

The AER and the Consumer Challenge Panel present to stakeholders to explain the DD.

 

Public Submissions on DD and Pre-Determination Conference

The DD and Pre-Determination Conference are published for public consultation.

 

Revised Revenue Proposal

ElectraNet’s Revised Revenue Proposal (RRP) sets out revisions made to the RP to incorporate changes arising from the DD made by the AER and comments from stakeholders.

 

Public submission on Revised Revenue Proposal

The Revised Revenue Proposal is published for public consultation.

 

Final Determination

The AER publishes the Final Transmission Determination which contains the maximum allowed revenue (MAR) that ElectraNet may recover from customers through transmission network charges. It also includes the final total capital and operating forecasts the AER considers efficient, taking into account the long term interests of customers.