Customer and Consumer Panel 28 May 2015 Welcome to Powerlink - - PowerPoint PPT Presentation

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Customer and Consumer Panel 28 May 2015 Welcome to Powerlink - - PowerPoint PPT Presentation

Feb 08, 2024 209 likes •611 views

Customer and Consumer Panel 28 May 2015 Welcome to Powerlink Merryn York Chief Executive 2 Our position in the supply chain The cost of our service Powerlink Source: Queensland Competition Authority 4 About the Customer and Consumer

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Customer and Consumer Panel

28 May 2015

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Welcome to Powerlink

Merryn York Chief Executive

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Our position in the supply chain

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The cost of our service

Source: Queensland Competition Authority

Powerlink

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About the Customer and Consumer Panel

Amanda Newbery Facilitator

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About today’s session

  • Introductions
  • Overview of today’s agenda
  • 1. Powerlink’s Engagement approach
  • 2. Discussion - Role of the panel
  • 3. Reset overview
  • 4. Opex methodology and discussion
  • 5. Capex methodology and discussion
  • 6. Meeting recap/actions

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Powerlink’s Engagement Approach

Gerard Reilly Group Manager - Stakeholder Relations

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Why engage?

  • Improve:

– business decision making – our understanding of stakeholder views

  • Discuss changes at a stage

we can do something about them

  • Our mission – We responsibly deliver electricity transmission services

that are valued by our shareholders, consumers, customers and the market.

  • Powerlink Stakeholder Engagement Framework

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Engagement objectives

  • Expand ‘business as usual’ engagement processes
  • Speak with the right people at the right time
  • Present information in a simple and accessible manner
  • Clearly show which elements of Powerlink’s decision

making stakeholders can add most value

  • Genuinely consider feedback in our decision making
  • Demonstrate how engagement has improved

Powerlink’s decision making 9

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Proposed engagement approach

Directly-connected customers Consumer representatives Industry representatives

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Proposed engagement approach

Who are we engaging with?

  • Stakeholder

identification What are we engaging on?

  • Market research

to identify key issues How are we going to engage?

  • Face-to-face is

preferred Undertake engagement?

  • Panel
  • Forums

Report back

  • Close the loop

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2015 Engagement Calendar

May Jun Jul Aug Sep Oct Nov Dec

Customer and Consumer Panel Powerlink Transmission Network Forum Customer and Consumer Panel Metro Brisbane Area Plan Forum Customer and Consumer Panel Gladstone Area Plan Forum

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Role of the Customer and Consumer Panel

Amanda Newbery Facilitator

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  • Wide spread of varied expertise
  • Working together
  • Stakeholder and PQ’s expectations
  • Regularity of meetings
  • What do you want to discuss in the coming 12 months?

Role of the Panel

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Powerlink Revenue Proposal 2018 – 2022 Regulatory Period

Don Woodrow – Revenue Reset Leader Lutfiye Allahmanli – Reset Stream Leader, Opex Greg Hesse – Reset Stream Leader, Capital

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Overview

  • About our Revenue Proposal
  • What is capex/opex?
  • Our current forecasting considerations
  • Our current methodology thinking
  • Where we need your involvement

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About our Revenue Proposal

  • Powerlink has adapted to the changing economy and market
  • Our expenditure has been below forecast in the current regulatory

period

  • Our Revenue Proposal will reflect expected continued change
  • Proposed rate of return methodology consistent with AER Guidelines
  • Similar outcome to recent rate of return determinations is likely
  • AER will not set Powerlink’s rate of return until 2017
  • Powerlink’s Revenue Proposal will benefit from stakeholder input

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Revenue Reset Timetable

We will be seeking your feedback and ideas as we work through the entire process

Date Action 30 June 2015 Powerlink submits expenditure forecasting methodologies to the AER 31 January 2016 Powerlink submits Revenue Proposal to the AER * May 2016 Submissions due to AER on Revenue Proposal * September 2016 AER draft Determination released * December 2016 Powerlink submits Revised Revenue Proposal 30 April 2017 AER Determination released for Powerlink’s 2017/18-2021/22 regulatory control period

* indicative

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Potential input opportunities

  • Case studies about future development directions
  • Finance matters
  • Trade-offs between opex and capex

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Afternoon Tea

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Opex forecasting methodology

Lutfiye Allahmanli – Reset Stream Leader, Opex

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What is Powerlink’s opex?

Business Support

Corporate Services IT Facilities

Refurbishment Routine maintenance

Planned Failure prevention Based on Reliability Centered Maintenance

Non-routine maintenance

Emergency Corrective Condition

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Our maintenance considerations

We manage maintenance by applying Reliability Centred Maintenance (RCM) principles

  • Systematic and optimized approach
  • Defines asset function and required reliability and

availability

  • Triggers technical and economic justification
  • Provides preventative maintenance plans
  • Used across different industries

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Our refurbishment considerations

  • Structural refurbishment
  • Tower painting
  • Insulators and hardware replacement

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Our opex forecasting methodology

Powerlink’s opex forecasting methodology aligns with AER’s requirements and preferred methodology (base-step-trend)

Base year 2014/15

  • r

2015/16

Rate of Change Step changes

Forecast 2018-22

  • pex

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What will add value to our opex forecasting methodology?

Amanda Newbery Facilitator

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Capex forecasting methodology

Greg Hesse – Reset Stream Leader, Capital

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What is capex?

The cost of

  • investing and re-investing in our network assets – such as

transmission lines and substations

  • supporting delivery of network services, including vehicle fleet,

tools, equipment, offices and depots

  • > 95% of capex is invested in network assets.

The value of the investment is recovered over the life of the asset, which can range from three years (eg. computers) to 50 years (eg. transmission lines)

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Our current considerations

Asset re-investments – Transmission Towers

Indicative end

  • f asset life

2017-2022 Indicative end of asset life 2023-2028

200 400 600 800 1000 1200 1400 1600 1800 2000 1950 1960 1970 1980 1990 2000 2010 2020 2014 2009

Actual end of asset life 2009 - 2014

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Our current considerations

Demand forecasting

1000 2000 3000 4000 5000 6000 7000 8000 9000 Metered Demand (MW)

Power Demand on 5 March 2015

Delivered Delivered plus PV

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Our current considerations

Network reconfigurations

As parts of the network reach end of life, re-investment considerations include reconfiguration and potential decommissioning.

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Our current methodology thinking

Forecast Capex

Forecast needs Predictive modelling Trend analysis Investment trigger Business case Options analysis

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Forecasting capex

Forecast significant investment need

current next 33

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Why use a hybrid forecasting approach?

  • Less resource intensive but still fit for purpose
  • Appropriate for forecasting – bottom up still used for actual

investment approval/decision making

  • Does not generate unnecessary information that may not be used
  • Knowledge of asset condition and priorities improves over time
  • Allows for an evolving environment

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What is in it for the end customer/consumer?

  • More accessible and simpler to understand – including

comparisons over time

  • Cheaper, more transparent, streamlined determination process
  • Simpler and easier for all involved (AER, CCP, stakeholders, PQ)

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Where we need your input today

– Criteria for selecting forecast future investment triggers where additional bottom-up information will supplement the top-down forecasts. – Given these investment triggers are potentially some way into the future, what bottom-up information could be reasonably available? – Recall that > 95% of capex is for network assets

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$- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 131 136 141 146 151 156 161 166 171 176 181 186 191 196 201 206 211

Powerlink 2013-17 Revised Revenue Proposal – Unapproved Network Project Estimates ($ million)

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Discussion

Criteria for selecting forecast future investment triggers may include: 1. Sample of expenditure from each capex category (load-driven, non- load driven, non-network) 2. % of total forecast capex (eg. of the total forecast capex spend, x% is sampled) 3. $ threshold (eg. all projects with an expected cost greater then $x million) 4. Your ideas for criteria

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Meeting recap

  • Key outcomes from capex and opex discussions
  • Key actions
  • Where to next?

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