Access arrangement final decision Envestra Ltd 2013–17 Part 2: Attachments

Revisions

1186. 
      The AER proposes the following revisions to make the revised access arrangement proposal acceptable:
      
1187. 
      Revision 12.1: Make all necessary amendments to reflect the AER’s final decision on the reference tariffs for 2013. The AER's final decision on reference tariffs for 2013 is set out in to Table 12 .81.
      

Table 12.78: AER final decision: Envestra Victoria -Tariff V - Tariff Schedule 2013

Central Zone
Residential
Base Charge ($/day)	0.1456
Charge for the first 0.0274GJ of gas delivered ($/GJ)	8.3198
Charge for the next 0.0219GJ of gas delivered ($/GJ)	6.2398
Charge for additional gas delivered ($/GJ)	3.4256
Non-residential
Base Charge ($/day)	0.1456
Charge for the first 0.05GJ of gas delivered ($/GJ)	6.4449
Charge for the next 0.50GJ of gas delivered ($/GJ)	3.5922
Charge for the next 0.82GJ of gas delivered ($/GJ)	2.6836
Charge for additional gas delivered ($/GJ)	1.0882

North Zone
Residential
Base Charge ($/day)	0.1456
Charge for the first 0.0274GJ of gas delivered ($/GJ)	7.2392
Charge for the next 0.0219GJ of gas delivered ($/GJ)	5.4294
Charge for additional gas delivered ($/GJ)	2.9806
Non-residential
Base Charge ($/day)	0.1456
Charge for the first 0.05GJ of gas delivered ($/GJ)	5.6714
Charge for the next 0.50GJ of gas delivered ($/GJ)	3.1611
Charge for the next 0.82GJ of gas delivered ($/GJ)	2.3615
Charge for additional gas delivered ($/GJ)	0.9576

Murray Valley Zone
Residential
Base Charge ($/day)	0.2020
Charge for the first 0.0274GJ of gas delivered ($/GJ)	6.3084
Charge for the next 0.0219GJ of gas delivered ($/GJ)	4.7313
Charge for additional gas delivered ($/GJ)	3.0768
Non-residential
Base Charge ($/day)	0.2020
Charge for the first 0.05GJ of gas delivered ($/GJ)	5.0728
Charge for the next 0.50GJ of gas delivered ($/GJ)	3.6085
Charge for the next 0.82GJ of gas delivered ($/GJ)	2.6958
Charge for additional gas delivered ($/GJ)	1.2769

Bairnsdale Zone
Residential
Base Charge ($/day)	0.2397
Charge for the first 0.0274GJ of gas delivered ($/GJ)	13.6958
Charge for the next 0.0219GJ of gas delivered ($/GJ)	10.2719
Charge for additional gas delivered ($/GJ)	5.6391
Non-residential
Base Charge ($/day)	0.2397
Charge for the first 0.05GJ of gas delivered ($/GJ)	10.9171
Charge for the next 0.50GJ of gas delivered ($/GJ)	6.0850
Charge for the next 0.82GJ of gas delivered ($/GJ)	4.5458
Charge for additional gas delivered ($/GJ)	1.8434

Table 12.79: AER final decision: Envestra Victoria - Tariff D - Tariff Schedule 2013

	Central Zone	North Zone	Murray Valley	Bairnsdale
10 GJ or less ($/GJ)	1,195.0358	1,195.0358	1,392.8753	1,976.6325
Next 40GJ ($/GJ)	730.5251	730.5251	859.4919	1,224.5321
Additional GJ ($/GJ)	133.4089	133.4089	146.3866	223.3269

1188. 
      
      
1189. 
      
      

Table 12.80: AER final decision: Envestra Albury -Tariff V - Tariff Schedule 2013

Residential
Base Charge ($/day)	0.2406
Charge for the first 0.0274GJ of gas delivered ($/GJ)	6.7770
Charge for the next 0.0219GJ of gas delivered ($/GJ)	5.0828
Charge for additional gas delivered ($/GJ)	2.7904
Non-residential
Base Charge ($/day)	0.2406
Charge for the first 0.05GJ of gas delivered ($/GJ)	5.2346
Charge for the next 0.50GJ of gas delivered ($/GJ)	2.9177
Charge for the next 0.82GJ of gas delivered ($/GJ)	2.1797
Charge for additional gas delivered ($/GJ)	0.8839

Table 12.81: AER final decision: Envestra Albury - Tariff D - Tariff Schedule 2013

10 GJ or less ($/GJ)	1147.0679
Next 40GJ ($/GJ)	712.4285
Additional GJ ($/GJ)	172.1633

1190. 
      Revision 12.2: Make all necessary amendments to reflect the AER’s final decision on the x factors for the 2013–17 access arrangement period as set out below:
      
1191. 
      For Envestra Victoria:
      
1192. 
      Xt = 0.2% for the calendar year 2013
      
1193. 
      Xt = -1.5% for the calendar year 2014
      
1194. 
      Xt = -2.0% for the calendar year 2015
      
1195. 
      Xt = -3.0% for the calendar year 2016
      
1196. 
      Xt = -3.0% for the calendar year 2017
      
1197. 
      For Envestra Albury:
      
1198. 
      Xt = 3.5% for the calendar year 2013
      
1199. 
      Xt = 0.0% for the calendar years 2014 to 2017
      
1200. 
      Revision 12.3: Make all necessary amendments to reflect the AER’s final decision on the value of pre–tax WACC as set out below:
      
1201. 
      For Envestra Victoria: real pre–tax WACC = 5.43
      
1202. 
      For Envestra Albury: real pre–tax WACC = 5.84
      
1203. 
      Revision 12.4: Make all the necessary amendments to reflect the AER's final decision on the application of the initial reference tariffs. In particular:
      
1204. 
      Replace paragraph two of section 3.1 of the Access arrangement with the following:
      
1205. 
      The initial Reference Tariffs will apply from 1 July 2013, until those Reference Tariffs are varied in accordance with section 4 of this Access Arrangement.
      
1206. 
      Revision 12.5: Make all the necessary amendments to reflect the AER's final decision on the revisions commencement date. In particular:
      
1207. 
      Replace section 9.2 with the following:
      
1208. 
      The revisions to this Access Arrangement referred to in section 9.1 will commence on 1 January 2018.
      
1209. 
      Revision 12.6: Replace section 4.4.2 of the proposed access arrangement with the following:
      
1210. 
      For the calendar year 2013, the reference tariffs for ancillary reference services for the period 1 January 2013 to 30 June 2013 remain unchanged from 2012. Initial variation of reference tariffs for Ancillary reference services that will occur on 1 July 2013 for the period 1 July to 31 December 2013 based on the following formula:
      
1211. 
      
      
1212. 
      The ancillary reference tariff control formula for the calendar year 2014 is:
      
1213. 
       
      
1214. 
      The ancillary reference tariff control formula for the calendar years 2015 to 2017 is:
      
1215. 
      
      
1216. 
       where:
      
1217. 
        is the ancillary reference tariff that applies in calendar Year t;
      
1218. 
       is the ancillary reference tariff that applies in calendar Year t-1;
      
1219. 
       is the CPI for calendar year t, is calculated as the CPI for the September quarter immediately preceding the start of year t, divided by the CPI for the September quarter immediately preceding the start of year t-1.
      
1220. 
       is the CPI for calendar year t-1, is calculated as the CPI for the September quarter immediately preceding the start of year t-1, divided by the CPI for the September quarter immediately preceding the start of year t-2.
      
1221. 
      Revision 12.7: Make all necessary amendments to reflect the AER’s final decision on the carbon tax tariff true up mechanism. Specifically, replace the content of Box 4, Annexure D of the Victorian access arrangement with the following:
      
1222. 
      When assessing Envestra’s proposed tariffs, submitted in accordance with this Access Arrangement, the AER will assess whether the Carbon Payment Revenue (CPRt), is less than or equal to the Maximum Carbon Payment Revenue allowed (MCPRt) as follows:
      
1223. 
      
      
1224. 
      where:
      
1225. 
      CPRt is the total of Envestra’s proposed Carbon Payment Revenue charges multiplied by the corresponding forecast quantities to be distributed for each tariff component of each tariff, in calendar year t.
      
1226. 
      MCPRt is the maximum revenue that Envestra is allowed to receive from its Carbon Payment Revenue tariffs from all consumers for the calendar year t and is expressed as:
      
1227. 
      
      
1228. 
      where:
      
1229. 
      is the aggregate of all charges that Envestra forecasts it will be required to pay in Carbon Payments in respect of calendar year t, and
      
1230. 
      is a correction factor to account for any under or over recovery arising from actual Carbon Payment Revenue tariffs in relation to allowed revenue and is expressed as follows:
      
1231. 
      
      
1232. 
      where:
      
1233. 
      is calculated in accordance with the formula below;
      
1234. 
      is calculated in accordance with the formula below;
      
1235. 
      is the figure calculated for Kt for calendar year t–1; and
      
1236. 
      Calculation of
      
1237. 
      is a correction factor determined with reference to the following formula:
      
1238. 
      
      
1239. 
      where:
      
1240. 
      is the total revenue which it is estimated Envestra will earn from its Carbon Payment tariffs in respect of all customers in calendar year t-1; and
      
1241. 
      is the aggregate of all charges that Envestra estimates it will be required to pay in Carbon Payments in respect of calendar year t-1.
      
1242. 
      Calculation of
      
1243. 
      is a correction factor for the difference between the estimates made when calculating for calendar year t-1 and the actual values now available. is expressed by the formula below.
      
1244. 
      
      
1245. 
      where:
      
1246. 
      is the actual total revenue earned by the Envestra from Carbon Payment tariffs in respect of all distribution customers in calendar year t–2;
      
1247. 
      is the figure used for CPRt-1 when calculating Kyt for calendar year t-2;
      
1248. 
      is the aggregate of all charges that Envestra incurred in Carbon Payments in respect of calendar year t-2; and
      
1249. 
      is the figure used for CPPt-1 when calculating Kyt for calendar year t-1.
      
1250. 
      Note: Kzt = 0 for 2014
      
1251. 
      Note: Kt requires an adjustment for the time value of money.
      
1252. 
      Revision 12.8: Make all necessary amendments to reflect the AER’s final decision on the ESV levy. In particular:
      
1253. 
      Delete the ESV levy factor from the reference tariff control formula in the proposed access arrangement Part B.
      
1254. 
      Delete paragraphs four to six of section 4.4.1.
      
1255. 
      Delete Victoria Box 3 of Annexure D of the proposed access arrangement Part B for the Victorian distribution network.
      
1256. 
      Revision 12.9: Make all necessary amendments to reflect the AER’s final decision on the timeframe for notifying the AER in respect of the annual reference tariff variation process. In particular:
      
1257. 
      Replace section 4.6.1 of the proposed access arrangement Part B with the following:
      
1258. 
      Where Envestra wishes to vary any Reference Tariff pursuant to section 4.4, Envestra will notify the AER in respect of the proposed variation, such that variations occur on the first of January of any year. The notification will be made at least 50 Business Days before the date of implementation and include:
      
1259. 
      (a) the proposed variations to the Reference Tariffs; and
      
1260. 
      (b) an explanation and details of how the proposed variations have been calculated.
      
1261. 
      If Envestra proposes variations to the Reference Tariffs pursuant to section 4.4 and those variations have not been approved by the next 1 January then the Reference Tariffs will be varied with effect from that next 1 January by the same percentage increment or decrement as occurred on the previous 1 January, until such time as variations to Reference Tariffs are approved by the AER.
      
1262. 
      If it appears that any past tariff variation contains a material error or deficiency because of a clerical mistake, accidental slip or omission, miscalculation or misdescription, the AER may change subsequent tariffs to account for these past issues.
      
1263. 
      Within 30 Business Days of receiving Envestra’s variation notice, the AER will inform Envestra in writing of whether or not it has verified the proposed variation in the Envestra’s notice as compliant with the Reference Tariff Control Formulae.
      
1264. 
      The 30 Business Day period may be extended for the time taken by the AER to obtain information from Envestra, obtain expert advice or consult about the notification. However, the AER must assess a variation application within 30 Business Days of receiving Envestra’s variation notice, excluding any extension of the decision making time. The AER may require an extension of a specified duration. The AER will notify Envestra of the extension, and its duration within 30 business days of receiving a notification from Envestra.
      
1265. 
      Revision 12.10: Make the following amendment to the definition of Insurance Cap Event in clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1266. 
      Under (b) delete the phrase 'or losses'
      
1267. 
      Under (c) insert 'reference' between 'providing' and 'services'.
      
1268. 
      Revision 12.11: Make the following amendment to clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1269. 
      Delete the UAFG Benchmark Event
      
1270. 
      Revision 12.12: Make the following amendment to clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1271. 
      Insert the following phrase at the end of the definition of a National Energy Customer Framework Event:
      
1272. 
      'including any amendment, withdrawal or introduction of any associated Victorian legislation, regulations or rules'.
      
1273. 
      Revision 12.13: Make the following amendment to clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1274. 
      Under the first paragraph delete the following phrase 'in which each individual event materially increases or materially decreases the cost of providing the reference services'
      
1275. 
      Revision 12.14: Make the following amendment to clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1276. 
      Amend the definition of Insurance Cap Event as follows:
      
1277. 
      Under paragraph (b), delete the phrase 'or losses'.
      
1278. 
      Under paragraph 9c), insert the word 'reference' between 'providing' and 'services'.
      
1279. 
      Revision 12.15: Make the following amendment to clause 4.5 in Part A of Envestra's revised access arrangement proposal:
      
1280. 
      Insert the following definition of a Mains Replacement Event:
      
1281. 
      A Mains Replacement Event means the event whereby Envestra:
      
1282. 
      (a) completes 268 kilometres of its planned total completion of Historical Volumes of Mains Replacement during the course of the 2013–17 access arrangement period; and
      
1283. 
      (b) costs are incurred, or are to be incurred, by Envestra in the remainder of the 2013-17 access arrangement period to complete a volume of Mains Replacement in excess of the Historical Volumes.
      
1284. 
      For the purposes of the Mains Replacement Event:
      
1285. 
      Historical Volumes means 365 km being the volume of mains replacement completed by Envestra for the 2008 to 2012 access arrangement period, with reference to the AER’s decision to approve the 2013-17 access arrangement and its reasons as set out in its Final Decision; and
      
1286. 
      Mains Replacement means mains replacement for low pressure to high pressure block rollout, which involves the replacement of:
      
1287. 
      (i) low pressure distribution mains with high pressure polyethylene mains through a process of dividing a low pressure region into smaller areas (referred to as blocks) which are then subject to systematic low pressure to high pressure replacement, and
      
1288. 
      (ii) includes the minimum amount of replacement of medium pressure supply mains necessary to undertake the proposed low pressure mains replacement in the 2013-2017 access arrangement period, as specified in (i)
      
1289. 
      Costs are to be determined in accordance with the pre-approved unit rates set out in the AER’s decision to approve the 2013-17 access arrangement and its reasons as set out in its Final Decision or, where unit rates have not been pre-approved, are to be determined as otherwise set out in its Final Decision.
      
1290. 
      Revision 12.16: Make the following amendment to clause 4.6.2 in Part A of Envestra's revised access arrangement proposal:
      
1291. 
      replace each reference to '60 business' days with '90 business days'.
      
1292. 
      Revision 12.17: Make the following amendment to clause 4.6.2 in Part A of Envestra's revised access arrangement proposal:
      
1293. 
      In the first paragraph delete the phrase '(or scheduled to occur)'.