electricity distribution transferred to the AER with standing and market contracts in existence. Principles Independent Pricing and Contribution must not Economic efficiency Equity, transparency, The capital contribution Appropriate Regulatory Tribunal exceed the amount test: existing consistency, user pay charge payable by the economic, cost considers that the principles that would be required customers will be no signal, reasonable customer may be an reflective pricing for capital contributions are by a prudent service worse-off following amount no more than the signals to network consistent with the approach provider acting the introduction of a additional costs incurred users, to regulating network prices: efficiently, in new user. No by the distributor in Commercial viability of accordance with good crosssubsidisation providing that connections to the 1) Reflect economic costs by: electricity industry from other customers. infrastructure. network. being subsidy free; practice seeking to Signal to customers Equitable outcomes. signaling future achieve the lowest efficient costs of Simplicity. sustainable cost of investment costs; network connection. providing the service. discouraging uneconomic Equity new customer – bypass; should contribute to allowing negotiations. the costs of the 2) Return the allowed existing shared revenue stream. network. 3) Promote equity, stability and consistency of outcomes. Document Ausgrid has developed SP Ausnet has SA Western has a Energex has a Capital Aurora Energy has ActewAGL has not PWC Networks is developed Capital Contributions and developed a Networks has a Contributions Policy. Contributions Policy developed a Customer introduced a capital proposing to Asset Relocation Works Customer Connection (May 2010). Capital Contributions contributions policy. amalgamate 2 capital by Guidelines (December 2008). Connection Policy Policy (effective contributions policies network Ergon Energy (2008) which (developed 1 July 2012). (DSEP and NCCP) into Corporation has providers includes information in January 2013) a single document. developed a Capital on customer which includes a Contributions contributions number of (Associated with provisions Network Connections) relating to Policy (April 2005). capital contributions.
electricity distribution transferred to the AER with standing and market contracts in existence. Principles Independent Pricing and Regulatory Tribunal considers that the principles for capital contributions are consistent with the approach to regulating network prices: 1) Reflect economic costs by: being subsidy free; signaling future investment costs; discouraging uneconomic bypass; allowing negotiations. 2) Return the allowed revenue stream. 3) Promote equity, stability and consistency of outcomes. Contribution must not exceed the amount that would be required by a prudent service provider acting efficiently, in accordance with good electricity industry practice seeking to achieve the lowest sustainable cost of providing the service. Economic efficiency test: existing customers will be no worse-off following the introduction of a new user. No crosssubsidisation from other customers. Signal to customers efficient costs of network connection. Equity – new customer should contribute to the costs of the existing shared network. Equity, transparency, consistency, user pay signal, reasonable The capital contribution charge payable by the customer may be an amount no more than the additional costs incurred by the distributor in providing that infrastructure. Appropriate economic, cost reflective pricing signals to network users, Commercial viability of connections to the network. Equitable outcomes. Simplicity. Document developed by network providers Ausgrid has developed Capital Contributions and Asset Relocation Works Guidelines (December 2008). SP Ausnet has developed a Customer Connection (2008) which includes information on customer contributions SA Networks has a Connection Policy (developed in January 2013) which includes a number of provisions relating to capital contributions. Western has a Contributions Policy. Energex has a Capital Contributions Policy (May 2010). Ergon Energy Corporation has developed a Capital Contributions (Associated with Network Connections) Policy (April 2005). Aurora Energy has developed a Customer Capital Contributions Policy (effective 1 July 2012). ActewAGL has not introduced a capital contributions policy. PWC Networks is proposing to amalgamate 2 capital contributions policies (DSEP and NCCP) into a single document.
CP-NCCP-1310.docx