The Australian Energy Regulator today issued the 2008-09 electricity performance report for transmission network service providers (TNSPs) in the National Electricity Market (NEM). TNSPs covered in the report are Directlink, ElectraNet, EnergyAustralia, Murraylink, Powerlink, SP AusNet, Transend, TransGrid and AEMO.
TNSPs manage the high voltage lines that transmit electricity to cities, towns and across state borders within the five interconnected jurisdictions of the NEM. Large users of electricity such as aluminium smelters typically connect directly into the transmission network.
Transmission network charges generally make up about 10 per cent of a household customer's bill, but a much bigger proportion of a larger customer's electricity costs.
As electricity transmission networks are natural monopolies, the AER puts controls on the TNSPs' maximum allowed yearly revenues.
The performance report provides information on the financial performance and reliability of transmission networks managed by the TNSPs, and how they are performing in comparison to performance targets. This facilitates informed public input into the AER's decision making and ensuring accountability for performance outcomes.
AER chairman, Andrew Reeves said three trends were identified in the 2008-09 report. "First, 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 $5.6 million for the 2009 calendar year."
"Second, capital expenditure is continuing to trend upwards and was 12 per cent higher in 2008-09 than the previous year, primarily reflecting the continuation of investments by TNSPs to upgrade and replace ageing networks to meet network performance requirements. Total capital expenditure during the past five years has exceeded $5 billion."
"Third, TNSPs continue to remain profitable with aggregate profits of TNSPs increasing to $388.7 million in 2008-09. Since 2002-03 TNSPs have continually recorded stable return on assets of between 7.4 to 7.9 per cent."
Mr Reeves said these results show that businesses are delivering higher service standards through improved operating practices and the investments they are making in their networks.
In publishing the report, the AER took into account confidentiality considerations and comments from TNSPs. The full report is available on the AER website.