review of SA Power Networks' demand forecasts and forecast network utilisation from our augex model. We also accept the proposed $52.7 million to remediate quality issues across its network. However, we do not consider that SA Power Networks has provided sufficient evidence to demonstrate it will be unable to maintain power quality levels, within the 2015-20 period, without an additional $19.6 million to invest in network monitoring. We do not accept the proposed $212.5 million for bushfire mitigation and $74.2 million for road safety. We acknowledge SA Power Networks' initiatives to review its current practices and procedures for network safety, and its efforts to engage with its Safety customers. However, we are not satisfied that these programs are reflective of the efficient costs that a prudent operator would require to maintain the safety 307.8 21.1 of the distribution system. We accept the proposed $45.2 million for the strategic project to install a second cable to Kangaroo Island. However, we do not accept the proposed Strategic strategic projects of $15.4 million to install network projects monitoring in select smart metres and $24.7 million for network control. 92.9 45.2 We accept the proposed $27 million to maintain network reliability. However, we do not accept the additional $29.4 million to improve network reliability. We are not satisfied based on the information Reliability provided by SA Power Networks that the STPIS regime will not fund these programs over the 2015-20 period. 56.4 27 We accept the proposed $14.9 million for environmental capex because we are satisfied that Environmental these amounts reasonably reflect the efficient cost to comply with the applicable regulatory obligations. 14.9 14.9 We accept the proposed $44.3 million to underground power lines as part of the Power Line Environment Committee (PLEC) program because Other — we are satisfied that these amounts reasonably PLEC reflect the efficient cost to comply with the applicable regulatory obligations. 44.3 44.3 Total 839.4 463.6 Source: AER analysis, SA Power Networks' reset RIN, SA Power Networks' response to AER SAPN 005 Note: The combined total of each augex component is $848 million, rather than $839.4 million as set out in this table. As set out in Table 66, we allocated the superannuation capex item within SA Power Networks' reset
review of SA Power Networks' demand forecasts and forecast network utilisation from our augex model. We also accept the proposed $52.7 million to remediate quality issues across its network. However, we do not consider that SA Power Networks has provided sufficient evidence to demonstrate it will be unable to maintain power quality levels, within the 2015-20 period, without an additional $19.6 million to invest in network monitoring. Safety 307.8 21.1 We do not accept the proposed $212.5 million for bushfire mitigation and $74.2 million for road safety. We acknowledge SA Power Networks' initiatives to review its current practices and procedures for network safety, and its efforts to engage with its customers. However, we are not satisfied that these programs are reflective of the efficient costs that a prudent operator would require to maintain the safety of the distribution system. Strategic projects 92.9 45.2 We accept the proposed $45.2 million for the strategic project to install a second cable to Kangaroo Island. However, we do not accept the proposed strategic projects of $15.4 million to install network monitoring in select smart metres and $24.7 million for network control. Reliability 56.4 27 We accept the proposed $27 million to maintain network reliability. However, we do not accept the additional $29.4 million to improve network reliability. We are not satisfied based on the information provided by SA Power Networks that the STPIS regime will not fund these programs over the 2015-20 period. Environmental 14.9 14.9 We accept the proposed $14.9 million for environmental capex because we are satisfied that these amounts reasonably reflect the efficient cost to comply with the applicable regulatory obligations. Other — PLEC 44.3 44.3 We accept the proposed $44.3 million to underground power lines as part of the Power Line Environment Committee (PLEC) program because we are satisfied that these amounts reasonably reflect the efficient cost to comply with the applicable regulatory obligations. Total 839.4 463.6 Source: AER analysis, SA Power Networks' reset RIN, SA Power Networks' response to AER SAPN 005 Note: The combined total of each augex component is $848 million, rather than $839.4 million as set out in this table. As set out in Table 66, we allocated the superannuation capex item within SA Power Networks' reset
AER%20-%20Preliminary%20decision%20SA%20Power%20Networks%20distribution%20determination%20-%20Attachment%206%20-%20Capital%20expenditure%20-%20April%202015.docx