The Australian Competition and Consumer Commission today issued its final decision on the revenue cap for Victoria’s electricity transmission services provided by SPI PowerNet and the Victorian Energy Networks Corporation (VENCorp).
SPI PowerNet's earnings for the first full year have been capped at $271.23million, increasing to $303.05 million in 2008, based on a post-tax nominal return on equity of 11.09 per cent and an opening asset balance of $1,835.60 million.
"The ACCC’s decision will save Victorian consumers $146.66 million over five and a quarter years", ACCC Chairman, Professor Allan Fels, said. "The ACCC determined that SPI PowerNet is entitled to $1503.34 million in revenue over the five year regulatory period, compared to SPI PowerNet’s request for $1650.00 million.
"In real terms this decision is expected to maintain the current level of transmission prices over the regulatory period”.
Combined with the recent ElectraNet revenue cap decision, consumers in South Australia and Victoria will save a total of $424.6 million over the regulatory period.
"This decision includes provision for $378.64 million in investment over five years to cater for growing demand and the ageing network. This will ensure a reliable supply of electricity to Victorian consumers, while providing long-term investment incentives for SPI PowerNet.
"The decision also introduces an incentive scheme to encourage SPI PowerNet and VENCorp to maintain or improve its service quality and reliability".
The ACCC is responsible for setting the maximum allowable revenue (revenue cap) for the non-contestable elements of transmission networks in the National Electricity Market.
In making its decision the ACCC considered submissions from industry, government and other interested parties.