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The Australian Energy Regulator Economic benchmarking DNSP outputs and environmental factors

The Australian Energy Regulator Economic benchmarking DNSP outputs and environmental factors. Agenda. This is the 4 th workshop on economic benchmarking techniques – three more to come Draft explanatory guidelines in August Final by 29 November.

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The Australian Energy Regulator Economic benchmarking DNSP outputs and environmental factors

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  1. The Australian Energy RegulatorEconomic benchmarking DNSP outputs and environmental factors

  2. Agenda

  3. This is the 4th workshop on economic benchmarking techniques – three more to come • Draft explanatory guidelines in August • Final by 29 November How does this fit into the broader consultation?

  4. Economic benchmarking workshops

  5. First phase of economic benchmarking workshops on inputs, outputs and environmental factors completed • Now we will consider data and definitions for economic benchmarking • Final workshops will outline the application of economic benchmarking and the expenditure framework as a whole Context for this workshop

  6. To explain and discuss technical issues on how to incorporate outputs into modelling • Weighting of outputs against each other • Incorporating reliability • Whether to use peak demand or capacity • To discuss data requirements for outputs & environmental factors • Is the data list comprehensive? • Are the preliminary definitions suitable? Objective of this workshop

  7. This workshop has been split into three parts • Consideration of the model specification (with a presentation from Economic Insights) • Discussion of data required to measure outputs • Discussion of data to measure environmental factors Structure of this workshop

  8. The AER must publish annual benchmarking reports • Economic benchmarking will be incorporated into the benchmarking report • The EFA guideline must set out data requirements Why focus on data collection?

  9. Multiple perspectives on model specification • Sensitivity analysis • Data requirements for the mechanics of economic benchmarking – ie weighting inputs and outputs Why collect a broad range of data?

  10. There is overlap between the data required for economic benchmarking and category analysis • We aim to collect data that is consistent and can be used for both • We will release consolidated draft data requirements with our draft guideline Overlap with category analysis

  11. A number of matters were raised in response to the briefing note: • Specification of how economic benchmarking techniques will be applied in expenditure assessments • How to incorporate environmental variables? • How to test the appropriateness of weighting variables? • Application of economic benchmarking to be covered in workshop on 22 May • We will discuss the weightings today Briefing note responses

  12. Economic Insights presentation

  13. Discussion topics • Incorporating reliability • How to weight outputs • The use of peak demand, network capacity or neither Discussion:Model specification issues

  14. Ideally one data request that will be the main source of information for category analysis and economic benchmarking • Data for primary model specification • Data for sensitivity analysis, which requiring a broader data set Question: is all the relevant data collected? Question: are the definitions suitable? Outputs data requirements

  15. DUOS revenue can be used to calculate output weights however a functional outputs approach is preferred. • Revenue data by component will be used for sensitivity analysis and may provide useful information in forming functional output weights • Revenue by chargeable quantity eg. fixed customer charges, on-peak energy delivery charges • Revenue by customer type eg. domestic customers, commercial customers Revenue

  16. System demand characteristics • Non-coincident and coincident peak demand • Demand supplied • Maximum demand for customers charged on this basis System Demand

  17. Distribution system capacities variables • Product of total line and cable circuit length (unadjusted for capacity) and transformer capacity at the last or distribution transformer level only. System Capacity

  18. By customer type • Domestic, commercial, industrial etc.. • By location • CBD, Urban, short rural, long rural Customer Numbers

  19. SAIDI and SAIFI • Unplanned without any removal of excluded events and MEDs • Disaggregated to reflect network type • Energy not supplied • Total, planned and unplanned Reliability

  20. Total energy delivered • Energy delivery by chargeable quantity • Energy received from TNSP by time of receipt • Customer type or class • Delivery time period definitions Energy Delivered

  21. Line losses as a percent of purchases System losses

  22. Data not just sought from DNSPs- data may also be collected from other agencies • Many differing environmental factors, however it may be that only a few can be incorporated. Hence there is a need to select the most material Environmental factors

  23. Economic Insights presentation

  24. Density factors • Customer (NSPs) • Energy (NSPs) • Demand (NSPs) • Weather factors • Extreme heat days (BoM) • Extreme cold days (BoM) • Extreme wind days (BoM) Operating Environment Factors

  25. Terrain factors • Bushfire risk (BoM & fire authorities) • Rural proportion (DNSPs) • Vegetation encroachment (DNSPs) • Service area factors • Line length (DNSPs) Operating Environment Factors

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