The Australian Competition and Consumer Commission today issued its draft decision on a revenue cap for Tasmania's electricity transmission services, owned and operated by Transend Networks.
"The decision accommodates a large increase in investment", Mr John Martin, ACCC Commissioner, said. "Currently investment in Tasmania's transmission network is about $44 million per year. This will increase to $56 million per year under the ACCC's draft decision.
"Over the five and a half year regulatory period investment will total $307 million, more than half the current value of Transend's assets. It will allow Transend to replace ageing assets and improve reliability".
Given that transmission charges represent about 10 per cent of retail electricity prices, the draft decision is expected to result in a price increase for customers of less than one per cent per year.
"The price increases are largely due to the substantial investment program, the revaluation of the initial asset base and the transfer of certain functions from the System Controller to Transend.
"However, the increases are considerably less than that sought by Transend. Overall, the ACCC's draft decision will save Tasmanian consumers $55 million over the five and a half years compared to Transend's proposal".
In making its decision the ACCC considered submissions from industry, relevant Tasmanian authorities and other interested parties. The ACCC now seeks submissions on its draft decision which it will consider when making its final decision, currently planned for December 2003.
The Tasmanian Transmission Network Revenue Cap 2004-2008/09 draft decision will be available from the ACCC website, www.accc.gov.au