The Australian Energy Regulator has issued its final decision on Powerlink's proposal to operate the Queensland electricity transmission network for 1 July 2012 to 30 June 2017.
The AER’s determination controls the revenues that Powerlink can earn from its transmission network. The AER has set revenues of $4,679 million, or 6.3 per cent below Powerlink's revised revenue proposal.
"This decision will have a minimal impact upon Queensland residential power bills due to the relatively low share of transmission costs in consumers’ annual bills," AER chairman Andrew Reeves said.
"The AER has lower expectations of capital and operating costs over the five year forecast period, due to lower forecasts of peak electricity demand growth. The small growth in revenue necessary to fund capital expenditure is expected to be offset by growth in energy transmitted”.
The AER did not accept Powerlink’s capital costs to construct a 500kV capable electricity network to transport electricity from Western Queensland into the Brisbane area. This is based upon the AER’s view that alternative electricity demand and generation scenarios between now and 2017 reduce the need for the project expenditure.
"However, to provide some certainty, the AER has made the Halys-Blackwall 500kV project contingent on Powerlink undertaking regulatory investment tests in the next five years, the outcome of which may see project funding granted in the future”.
The AER's analysis indicates that by 2016–17, peak demand is likely to be about 6 per cent lower than predicted by Powerlink. This expectation will result in a capital expenditure reduction of approximately $450 million.
"This decision strikes a balance between Powerlink’s requirements for operating a safe and reliable transmission system and those of its customers to access the network”, Mr Reeves said.
Powerlink’s regulatory control period will commence from 1 July 2012 and cease on 30 June 2017.