The electricity performance report for transmission network service providers (TNSPs) in the National Electricity Market was issued today. TNSPs covered in this report were Directlink, ElectraNet, EnergyAustralia, Murraylink, Powerlink, SP AusNet, Transend, TransGrid and VENCorp.
Australian Energy Regulator chairman, Steve Edwell, said the 2007/08 report is an important step to improving the transparency of the financial and operational performance of transmission businesses in the National Electricity Market. The report provides revenue, profit, expenditure and service standards information on each TNSP for the 2007/08 financial year.
Mr Edwell said three important trends were identified in the 2007/08 report. "First, capital expenditure is continuing to trend upwards, primarily reflecting the continuation of investments by TNSPs to upgrade and replace ageing networks to meet network performance requirements. Total capital expenditure over the past five years has exceeded $4 billion, and was 7.8 per cent higher than forecast for the 2007/08 financial year.
"Second, operating and maintenance expenditure stands at almost $1.9 billion during the past five years. The operating results also show that the sector remains financially healthy.
"Third, service standards are improving, with most TNSPs' outperforming relative to historic trends. As a result, businesses have been rewarded with service standards incentive payments totalling almost $10 million for the 2008 calendar year."
Mr Edwell said: "These results are encouraging and show that the regulatory regime has matured. Nonetheless, there is still scope for improvement and the AER has introduced a market impact measure in the service standards regime to strengthen the incentives for TNSPs to better manage network outages and minimise the effect of outages on spot electricity prices. This regime will ensure that TNSP service performance will continue to improve."
In publishing the report, the AER took into account confidentiality considerations and comments from the transmission networks. The full report will be posted on the AER website.
Electricity transmission is the high voltage wires network between towns, cities and states used to transport electricity from generators to distributors. Electricity distribution, by contrast, is typically lower voltage radial networks that transport electricity from the transmission take off points to end household and business users. In a few cases large businesses are directly connected to the transmission system (e.g. aluminium smelters).
The AER report builds on work undertaken by the Australian Competition and Consumer Commission in previous reports.