Legislative Council Wednesday 25 March, 2020

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

1. With regard to TasNetwork’s 2018-19 Annual Report;
a. Page 70 shows a fall in revenue due to the fall in the provision of regulated services, predominantly transmission:
i. was this a result of falls in price falls or volume falls;
ii. were there any significant volume movements related to the major customers;

2. With regard to the Australian Energy Regulator (AER);
a. when did the AER do the last review;
b. when is the next review due;
c. how does the AER outcomes affect the carrying values of TNs assets;
d. what was the effect on asset value after the last review?

ANSWER:

Q1
a(i) On year-on-year revenue figures, there was a reduction regarding the provision of regulated transmission services between 2017-18 and 2018-19. A majority of this difference was due TasNetworks receiving an extra $10.6m in the form of intra-regional settlement residue receipts from AEMO in 2017-18. Any over or under recovery by AEMO is returned to customers via adjustment to transmission charges.
b(ii) There was no significant movements related to major customers over this period.

Q2
a The AER’s last decision was made in April 2019 with effect from 1 July 2019 to 30 June 2024
b TasNetworks next revenue (for transmission) and regulatory (for distribution) proposals must be lodged with the AER in January 2023 commencing the formal rules process that will end with the AER’s next decision in April 2024 for the period 1 July 2024 to 30 June 2029
c This refers to TasNetworks Revenue Asset Base (RAB), which is the value of TasNetworks assets as determined by the AER. This is then used to calculate the allowed revenue. The quantum of the RAB shifts in response to the regulated depreciation of TasNetworks assets (deducted from the RAB) and allowed capital expenditure (added to RAB).
d TasNetworks transmission RAB at 1 July 2019 was $1445.3M. At the start of the previous regulatory control period, their transmission RAB was $1410.3m.
TasNetworks distribution RAB at 1 July 2019 was $1771.1m. At the start of the previous regulatory control period TasNetworks distribution RAB was $1615.2m.