Operating expenditure We accept total forecast opex of $62.8 million ($2015–16) for the 2016–21 APTNT’s access arrangement period. Table 9 shows our approved opex forecast—which we consider is such as would be incurred by a prudent service provider acting efficiently, in accordance with accepted good industry practice, to achieve the lowest sustainable cost of delivering pipeline services. Table 9 AER draft decision on total opex—APTNT ($million, 2015–16) 2016–17 2017–18 2018–19 2019–20 2020–21 Total APTNT's 11.9 12.9 13.9 11.8 12.3 62.8 proposal AER draft 11.9 12.9 13.9 11.8 12.3 62.8 decision Difference – – – – – – Source: APTNT, 2016-21 Access arrangement information, August 2015 Opex model; AER analysis. – This allows an eight per cent real increase from actual opex in the current APTNT’s access arrangement period. APTNT underspent relative to its opex forecast in Savings—in labour costs associated with integration into the APA Group structure, and efficiencies associated with business wide initiatives such as consolidation of engineering and finance resources—are reflected in the base year from which opex for 2016–21 has been forecast. However, these are offset by the following factors, which necessitate an increase from the current period to accommodate: Forecast changes in labour costs (but no real price changes to materials) Pigging costs, including for delays and deferrals to the pigging schedule from the current access arrangement period to 2016–21. Figure 9 compares forecast opex for the 2016–21 period to allowed and APTNT’s actual opex in 2011–16. Figure 9 historical and forecast opex ($million, 2015–16) APTNT’s Source: APTNT, 2016-21 Access arrangement information, August 2015 Opex model; APTNT, RIN response, – August 2015. Corporate income tax When determining the total revenue for APTNT, we must estimate cost of APTNT’s corporate income tax. APTNT has adopted the post-tax framework to derive its total revenue requirement for the 2016–21 access arrangement period. Under the post-tax framework, a separate corporate income tax building block is calculated, based on the
Operating expenditure We accept APTNT’s total forecast opex of $62.8 million ($2015–16) for the 2016–21 access arrangement period. Table 9 shows our approved opex forecast—which we consider is such as would be incurred by a prudent service provider acting efficiently, in accordance with accepted good industry practice, to achieve the lowest sustainable cost of delivering pipeline services. Table 9 AER draft decision on total opex—APTNT ($million, 2015–16) 2016–17 2017–18 2018–19 2019–20 2020–21 Total APTNT's proposal 11.9 12.9 13.9 11.8 12.3 62.8 AER draft decision 11.9 12.9 13.9 11.8 12.3 62.8 Difference – – – – – – Source: APTNT, 2016-21 Access arrangement information, August 2015 – Opex model; AER analysis. This allows an eight per cent real increase from APTNT’s actual opex in the current access arrangement period. APTNT underspent relative to its opex forecast in Savings—in labour costs associated with integration into the APA Group structure, and efficiencies associated with business wide initiatives such as consolidation of engineering and finance resources—are reflected in the base year from which opex for 2016–21 has been forecast. However, these are offset by the following factors, which necessitate an increase from the current period to accommodate: Forecast changes in labour costs (but no real price changes to materials) Pigging costs, including for delays and deferrals to the pigging schedule from the current access arrangement period to 2016–21. Figure 9 compares forecast opex for the 2016–21 period to APTNT’s allowed and actual opex in 2011–16. Figure 9 APTNT’s historical and forecast opex ($million, 2015–16) Source: APTNT, 2016-21 Access arrangement information, August 2015 – Opex model; APTNT, RIN response, August 2015. Corporate income tax When determining the total revenue for APTNT, we must estimate APTNT’s cost of corporate income tax. APTNT has adopted the post-tax framework to derive its total revenue requirement for the 2016–21 access arrangement period. Under the post-tax framework, a separate corporate income tax building block is calculated, based on the
AER%20-%20Draft%20decision%20Amadeus%20Gas%20Pipeline%20access%20arrangement%20-%20Overview%20-%20November%202015.DOCX