The Australian Energy Regulator (AER) has made its final decision for the Country Energy Wagga Wagga gas distribution’s access arrangement proposal for the period 1 July 2010 to 30 June 2015. The final decision also includes the revisions to be made to Country Energy’s revised access arrangement and access arrangement information. The AER’s final decision approves network charges and the terms and conditions of access for the Wagga Wagga gas distribution network for the period.
There will be an average increase in network charges in 2010-11 of 17.8 per cent for most residential customers. The higher network charge will take effect from 1 July 2010. As a result, gas prices for residential customers are expected to increase by about $1.27 per week. Network charges for the 18 500 retail customers of the network will increase on average by 2.5 per cent per annum in real terms in the remaining four years of the access arrangement period.
The higher network charges reflect higher total revenue of $48.8 million ($2009–10). This is the result of the weighted average cost of capital (WACC) of 9.72 per cent, which is 1.2 percentage points higher than the current cost of capital. The total revenue also includes higher projected capital expenditure of $20.1 million ($2009–10) for the continuing programme to upgrade the pressure of the distribution network and to support network growth and new connections. Higher operating expenditure of $14.3 million ($2009–10) reflects step changes from the base year costs.
AER’s access arrangement proposal
The AER’s final decision does not approve Country Energy’s revised access arrangement proposal including the access arrangement information. Country Energy’s revised access arrangement proposal did not fully meet the requirements of the AER’s draft decision. The final decision includes the AER’s reasons and the revisions required to the revised access arrangement proposal and the access arrangement information.
The revisions are contained in the AER’s access arrangement proposal including the access arrangement information, which is an annexure to the final decision.
The AER intends to approve its access arrangement proposal on 23 April 2010.
Further information and inquiries
Relevant information including the AER’s final decision including the AER’s proposal can be found on the AER’s website. For any other inquiries about the gas distribution reviews 2009–2010, please contact the AER on (02) 6243 1233. Alternatively, inquiries can be sent electronically to nswactgas
aer [dot] gov [dot] au (nswactgas[at]aer[dot]gov[dot]au).