Electricity emergency

Gas emergency

Every five years, Evoenergy is required to prepare a detailed plan - a regulatory proposal - explaining how we will operate, maintain and invest in the electricity network to meet the future needs of our customers, including with regard to cost. This electricity five-year plan is submitted to the Australian Energy Regulator (the regulator) for review and approval or replacement with an alternative plan.

Our proposed plan for the 2019/20-2023/24 years was submitted to the regulator on 31 January 2018 and published on the AER website following a check for compliance by the AER. Evoenergy must produce an overview of the plan in plain language, which you can read here. The full regulatory proposal can be viewed on the AER website here.

As part of preparing our five-year plan we have consulted with customers, and will continue to engage as the regulatory process continues. The diagram below summarises the regulatory review timeline and our program of stakeholder engagement.

Regulator timeframe

What is in our five year plan

Our five year plan includes an estimate of the lowest sustainable cost of managing an electricity distribution business in the ACT. Such an estimate needs to take account of expected growth in the demand for services; all applicable regulations; quality, reliability and security of supply; and the safety of the system.

As part of our planning process we consider:

the expectations and long term interests of our customers
how best to operate and maintain a reliable network cost-effectively
the replacement and growth requirements of the network
cost reflective prices, and
how we deliver services to our customers.

The Regulator reviews our plan and conducts its own analysis to determine whether the proposed cost of providing electricity distribution services is prudent and efficient.

The Regulator considers the following factors when making its determination on efficient costs:

Operating expenditure – how efficiently we operate and maintain the electricity network; taking into account the levels of service, reliability and safety we provide.
Capital costs – how we plan to invest for expansion of the network to service new developments and replacement of assets within the existing network as they reach the end of their useful lives, including costs of funds and depreciation.
Tariff structure – how we group customers based on common characteristics (for example, residential customers are distinct from commercial customers), and how we refine our tariffs to increase the cost-reflectivity of the pricing signals we send to customers and take into account new technology such as smart metering.
Forecast consumption and demand – How consumers use the network, including the total quantity of electricity transported over the network every year, and peak demand, which is the highest quantity of electricity being transported at a single point in time. Demand is a critical determinant of the level of Evoenergy’s investment in the network.

Framework and approach

The Framework and Approach is the first step in the regulatory review. During the F&A process, the Regulator decides which services it will regulate (service classification), and how it controls the prices we charge and/or revenue we collect for offering these services (control mechanisms). The F&A also reveals the Regulator’s initial positions on the broad nature of the regulatory arrangements including incentive schemes, transmission assets and depreciation of regulatory assets among others.

As part of this consultation, the Regulator published a preliminary F&A position on 10 March 2017. We provided our submission to the Regulator’s preliminary F&A on 24 April 2017. The Regulator published its final Framework & Approach paper on 31 July 2017.

How can you learn more?

As part of preparing our plan we published two documents to provide information to our customers. In December 2016 we released an issues paper which provides customers with information on the types of issues we expect to explore as we prepare our five-year plan. We received feedback from a number of customer stakeholder groups, including members of our Energy Consumer Reference Council.

In July 2017 we released a discussion paper which builds on the Issues Paper and outlines the key areas we need to consider as part of planning and maintaining the electricity network. This Discussion Paper poses a number of questions that we are seeking particular feedback from our customers on.

As part of providing information to our customers and seeking feedback we have also developed two case-studies: one on operational expenditure and the importance of reliability, and one on technology and investing in the network

In 2015 and 2016 we undertook a review of electricity network tariffs as part of preparing our first Tariff Structure Statement. This review included a number of customer consultation activities.

As part of the electricity network plan for 2019/20 – 2023/24, a second Tariff Structure Statement is being developed and will be submitted to the Regulator in January 2018. Further consultation has been undertaken in preparation for this second Tariff Structure Statement.

Stakeholder feedback

We have gathered feedback from our stakeholders in a number of ways:

Issues paper - ‘A Safe, Reliable and Cost-Effective Electricity Network: Electricity Network 2019-24 Five Year Plan
Presentations to and discussions at ECRC meetings
Inclusion of information in industry publications
Distribution of information to Community Councils
Discussion Paper – ‘Priorities for the ACT Electricity Network ; ActewAGL Distribution Electricity Network 2019-24 Five Year Plan’
Customer workshops
Customer feedback
Written submissions
Power Panel Surveys

The feedback from customers has been summarised in a consultation summary. A more detailed report on stakeholder feedback, and how we have responded to this feedback, is included in the proposed plan to be submitted to the Regulator in January 2018.

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