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Network Regulation Rule Change Proposals

George Maltabarow, Managing Director of Ausgrid, discusses the role of AEMC and the need for a stable and predictable regulatory framework. He highlights the failures of the previous framework and the benefits of the new framework. He also argues that the case for change has not been adequately made.

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Network Regulation Rule Change Proposals

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  1. Network Regulation Rule Change Proposals AEMC Public Forum George Maltabarow Managing Director Ausgrid

  2. I’ll talk about: Role of the AEMC and the National Electricity Objective Experiences under the previous framework - and how it failed Benefits of the new framework – examples of how it’s working Why Ausgrid believes the case for change has not been made.

  3. National Electricity Objective & moving goal posts AEMC rightly focuses on: - efficiency - transparency - predictability - certainty Framework - Moving Goal Posts - Last two resets – two different sets of rules - Now a third set of rule changes proposed - Framework must be stable, mature, predictable

  4. Network under-investment • Actual Capex • Replacement cost Catch-up expenditure Previous framework – under investment Unguided Regulators: IPART kept prices artificially low at the cost of the safety & reliability Actual capex vs assumed annual average annual cost of replacing network ($M, 2008-09 real)

  5. Circuit Breaker Failures - Mason Park STSS Cracks in Circuit Breaker 132kV Air Blast Circuit Breaker Failure, Mason Park STSS, 2006

  6. Hosing down North Sydney Zone The Sunday Telegraph, 17 October 2004, page 1

  7. Major failures 132kV Transformer Bushing Failure, Milperra Zone, 2003 11kV Circuit Breaker Failure, Matraville Zone, 2001

  8. Benefits of the framework Maintenance average unit costs reduced by approx 4% In 2005, 108 11 kV feeders overloaded. Now there are 44. 12% drop in no. of blackouts from equipment since 03/04. Average number of blackouts on rural power lines halved since 2003/04.

  9. AER already has powers Information asymmetry - AER required more detailed information - now can’t use it - rule change not the answer Substitution Ausgrid (NSW)- AER cut: - $460M in capital funding, and - $360M in operating costs - Tribunal upheld AER’s decision

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