requirement that includes an assessment of what we find to be an efficient total capex forecast. We determine total revenue by reference to our analysis of the proposed capex and the various building blocks. Once we approve total revenue, the distributor is able to prioritise its capex program given its circumstances over the course of the regulatory control period. The distributor may need to undertake projects or programs it did not anticipate during the distribution determination. The distributor may also not require some of the projects or programs it proposed for the regulatory control period. We consider a prudent and efficient distributor would consider the changing environment throughout the regulatory control period in its decision-making. As we explained in our Guideline: Our assessment techniques may complement each other in terms of the information they provide. This holistic approach gives us the ability to use all of these techniques, and refine them over time. The extent to which we use each technique will vary depending on the expenditure proposal we are assessing, but we intend to consider the inter-connections between our assessment techniques when determining total capex forecasts. We typically would not … infer the findings of an assessment technique in isolation from other techniques. In arriving at our estimate, we weight the various techniques we used in our assessment. We weight these techniques on a case by case basis using our judgement. Broadly, we give more weight to techniques we consider are more robust in the particular circumstances of the assessment. By relying on a number of techniques, we ensure we consider a wide variety of information and can take a holistic approach to assessing the distributor’s capex forecast. Where our techniques involve the use of a consultant, we consider their reports as one of the inputs to arriving at our final decision on overall capex. Our final decision clearly sets out the extent to which we accept our consultants' findings. Where we apply our consultants’ findings, we do so only after carefully reviewing their analysis and conclusions, and evaluating these against outcomes of our other techniques and our examination of Ergon Energy's proposal. We also take into account the various interrelationships between the total forecast capex and other components of a distributor's distribution determination. The other components that directly affect the total forecast capex include: forecast opex forecast demand the service target performance incentive scheme the capital expenditure sharing scheme real cost escalation contingent projects.
requirement that includes an assessment of what we find to be an efficient total capex forecast. We determine total revenue by reference to our analysis of the proposed capex and the various building blocks. Once we approve total revenue, the distributor is able to prioritise its capex program given its circumstances over the course of the regulatory control period. The distributor may need to undertake projects or programs it did not anticipate during the distribution determination. The distributor may also not require some of the projects or programs it proposed for the regulatory control period. We consider a prudent and efficient distributor would consider the changing environment throughout the regulatory control period in its decision-making. As we explained in our Guideline: Our assessment techniques may complement each other in terms of the information they provide. This holistic approach gives us the ability to use all of these techniques, and refine them over time. The extent to which we use each technique will vary depending on the expenditure proposal we are assessing, but we intend to consider the inter-connections between our assessment techniques when determining total capex … forecasts. We typically would not infer the findings of an assessment technique in isolation from other techniques. In arriving at our estimate, we weight the various techniques we used in our assessment. We weight these techniques on a case by case basis using our judgement. Broadly, we give more weight to techniques we consider are more robust in the particular circumstances of the assessment. By relying on a number of techniques, we ensure we consider a wide variety of information and can take a holistic approach to assessing the distributor’s capex forecast. Where our techniques involve the use of a consultant, we consider their reports as one of the inputs to arriving at our final decision on overall capex. Our final decision clearly sets out the extent to which we accept our consultants' findings. Where we apply our consultants’ findings, we do so only after carefully reviewing their analysis and conclusions, and evaluating these against outcomes of our other techniques and our examination of Ergon Energy's proposal. We also take into account the various interrelationships between the total forecast capex and other components of a distributor's distribution determination. The other components that directly affect the total forecast capex include: forecast opex forecast demand the service target performance incentive scheme the capital expenditure sharing scheme real cost escalation contingent projects.
AER%20-%20Final%20decision%20Ergon%20Energy%20distribution%20determination%20-%20Attachment%206%20-%20Capital%20expenditure%20-%20October%202015_0.DOCX