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CitiPower and Powercor have highlighted household electricity price reductions and providing stronger power supplies as key priorities in their recently submitted Regulatory Proposals for the 2021-2026 period.

CitiPower’s latest five-year plan submitted to the Australian Energy Regulator (AER) aims to reduce prices for households by ten per cent and modernise Melbourne’s power supply; while Powercor proposed a six per cent reduction in cost and a boost to infrastructure investments for western Victorians.

CitiPower/Powercor Chief Executive Officer, Tim Rourke, said the proposal responded directly to customer needs, expectations and priorities.

“Our plan is to deliver more to customers at a lower cost,” Mr Rourke said.

“CitiPower is Australia’s most efficient electricity distribution network and is continually improving.

“We are proposing high levels of investment so we can continue to operate the network safely and reliably. Efficiencies in our operations mean we can offer this increased investment while reducing costs to customers.”

CitiPower’s Plan

Central to the CitiPower plan is a substantial program to retire, replace and upgrade network assets, raise environmental protection standards, introduce new technologies and accommodate customer choices such as rooftop solar.

Distribution and metering revenue is forecast to decline by five per cent to $1,599 million over the period compared to $1,681 million in the current regulatory period.

CitiPower proposes $852 million in capital expenditure (net) over the period which is in line with the amount approved for the current regulatory period.

Operating expenditure is proposed at $569 million for the five years compared to $472 million in the current regulatory period, an increase of 20 per cent.

At the same time, distribution and metering charges will fall by an average of $38 for residents to $326 per annum and $119 per annum for small business customers.

Based on a typical household in Victoria, CitiPower’s distribution charge (excluding metering) will represent $274 (29 per cent) of the average annual bill of $957 in 2021/2022.

Major features of CitiPower’s proposal include:

  • $32 million to enable approximately 95 per cent of customers to connect a 5kVA solar PV system with export capability as the amount of installed solar increases
  • Upgrading zone substations in the Port Melbourne and Brunswick supply areas as new residential developments in these areas increase demand for electricity
  • Continuing works on the $250 million Melbourne CBD Security of Supply project which ensures we can maintain power to the city within 30 minutes switching time
  • Increasing the number of poles, service lines and pole-top assets replaced annually
  • Investing $135 million in net connections over the 2021-2026 period to support an estimated 17,700 new households and major infrastructure developments including rail and tunnel projects, road upgrades and tram track renewals
  • Investing $96 million in information and communications technology integral to all modern electricity distribution networks and offering high quality integrated services for customers

Powercor’s plan

Powercor’s plan focuses on mitigating bushfire risk, preventing asset failure, building a network to support growth and accommodating customer choices such as rooftop solar.

Distribution and metering revenue is forecast to be stable at $3,695 million over 2021-2026, compared to $3,694 million in the current regulatory period.

Powercor proposes $2,140 million in capital expenditure (net) over five years, an increase of $175 million (9 per cent) on the current regulatory period. This includes an annual program to replace pole-top assets, fuses and service lines as well as an increase in the number of poles replaced to 20,878 over the five years.

Operating expenditure is proposed at $1,537 million in the 2021-2026 period compared to $1,314 million in the current period, an increase of 17 per cent.

At the same time, distribution and metering charges will fall by an average of $24 for households to $407 per annum and $68 for small businesses to $1610 per annum.

Based on a typical household in Victoria, Powercor’s distribution charge (excluding metering) will represent $357 (34 per cent) of the average annual bill of $1,057 in 2021/2022.

Other major features of the proposal include:

  • $61 million to enable approximately 95 per cent of customers to connect a 5kVA solar PV system with export capability as the amount of installed solar increases;
  • Building or upgrading zone substations in Torquay, Tarneit and Bacchus Marsh to support high customer growth areas in the Bellarine Peninsula, Geelong and Melbourne’s western corridor which contribute to an anticipated 136,581 new household connections;
  • Conducting $9 million network upgrades to support farming communities in Tyrendarra, Strathdownie, Cape Bridgewater and Gorae West;
  • Building new depots in Warrnambool, Echuca and Brooklyn and expanding and upgrading depots in Bendigo and Ballarat to provide employees with safer, fit-for-purpose facilities that will further improve regional customer services;
  • Investing $166 million in information and communications technology integral to all modern electricity distribution networks and offering high quality integrated services for customers; and
  • Delivering a $198 million bushfire management plan that includes Rapid Earth Fault Current Limiter (REFCL)-related annual compliance programs and infrastructure developments.

More than 11,000 customers across CitiPower/Power and two other networks contributed to developing the proposal as part of a comprehensive stakeholder engagement program over three years.

AER benchmarking ranks CitiPower/Powercor as the most efficient in the National Electricity Market based on operating expenditure per customer, with power available for over 99.99 per cent of the year. On average, customers experience less than 20 minutes off supply per annum. 

Customers and stakeholders are invited to review CitiPower’s Regulatory Proposal and provide feedback to the AER as part of its assessment process here.

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