We accept CitiPower's proposed $9.419 million ($2015) forecast and have included this amount in their replacement capital expenditure. In coming to this view, we have assessed the CitiPower bushfire safety proposals. Based on our assessment, we find that the proposed capex for the bushfire safety programs reasonably reflect the capex objectives and therefore we have included the proposed capex in our estimate of CitiPower's capex requirements. Our assessment of this program is contained in the section below. This proposed amount for the program is incremental to CitiPower's business as usual capex related to bushfire risk management. Table 6.20 sets out the proposed components of the program. Table . CitiPower's proposed capex for a fire mitigation program ($2015, million, excluding overheads & escalation) Strategy Proposed LBRA Armour Rods & Dampers Retrofit 7.674 LBRA Multi-circuit survey cost 0.635 LBRA Multi-circuit Repairs (Fitting of Spacers) 0.379 LBRA Multi-circuit Rebuilds 0.732 9.419 Source: CitiPower, PUBLIC MOD 1.17 - CP Capex consolidation, 'Base Capex Forecast', FC 167 VBRC, April – 2015. AER assessment approach For bushfire safety related capex there are three potential bases for consideration of a funding requirement. These are: Business As Usual (BAU): Capex which we assess along with other capex in attachment 6. We use the tools outlined in attachment 6 to assess the efficiency of the forecast. These capex projects relate to maintaining the quality, reliability or security of supply of standard control services or the reliability or security of the distribution system through the supply of standard control services or the safety of the distribution system through the supply of standard control services. Approved projects are set out in the companies’ Electrical Safety Management Scheme (ESMS) or Bushfire Mitigation Plan (BMP). We rely on Energy Safe Victoria to establish need. We then assess the efficiency of the forecast cost. projects are assessed in accordance with the capital expenditure objectives to determine if they are necessary to comply with applicable regulatory obligations or requirements associated with the provision of standard control services. Pending regulations from the Victorian Government which will implement aspects of recommendation 27 of the Victorian Bushfires Royal Commission (VBRC). The
We accept CitiPower's proposed $9.419 million ($2015) forecast and have included this amount in their replacement capital expenditure. In coming to this view, we have assessed the CitiPower bushfire safety proposals. Based on our assessment, we find that the proposed capex for the bushfire safety programs reasonably reflect the capex objectives and therefore we have included the proposed capex in our estimate of CitiPower's capex requirements. Our assessment of this program is contained in the section below. This proposed amount for the program is incremental to CitiPower's business as usual capex related to bushfire risk management. Table 6.20 sets out the proposed components of the program. Table . CitiPower's proposed capex for a fire mitigation program ($2015, million, excluding overheads & escalation) Strategy Proposed LBRA Armour Rods & Dampers Retrofit 7.674 LBRA Multi-circuit survey cost 0.635 LBRA Multi-circuit Repairs (Fitting of Spacers) 0.379 LBRA Multi-circuit Rebuilds 0.732 9.419 Source: CitiPower, PUBLIC MOD 1.17 - CP Capex consolidation, 'Base Capex Forecast', FC 167 – VBRC, April 2015. AER assessment approach For bushfire safety related capex there are three potential bases for consideration of a funding requirement. These are: Business As Usual (BAU): Capex which we assess along with other capex in attachment 6. We use the tools outlined in attachment 6 to assess the efficiency of the forecast. These capex projects relate to maintaining the quality, reliability or security of supply of standard control services or the reliability or security of the distribution system through the supply of standard control services or the safety of the distribution system through the supply of standard control services. Approved projects are set out in the companies’ Electrical Safety Management Scheme (ESMS) or Bushfire Mitigation Plan (BMP). We rely on Energy Safe Victoria to establish need. We then assess the efficiency of the forecast cost. projects are assessed in accordance with the capital expenditure objectives to determine if they are necessary to comply with applicable regulatory obligations or requirements associated with the provision of standard control services. Pending regulations from the Victorian Government which will implement aspects of recommendation 27 of the Victorian Bushfires Royal Commission (VBRC). The
AER%20-%20Preliminary%20decision%20CitiPower%20distribution%20determination%20-%20Attachment%206%20-%20Capital%20expenditure%20-%20October%202015.docx