Expenditure forecast 2016/17 2020/21 - ECRC Meeting 18 March 2015 Ed Gaykema Branch Manager Gas Networks - Evoenergy
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Expenditure forecast 2016/17 – 2020/21 ECRC Meeting 18 March 2015 Ed Gaykema Branch Manager Gas Networks
In this presentation • Building blocks to our plan/ the submission • Capital investment priorities 2016-2021 • Operational priorities 2016-2021 • ECRC input
Building blocks overall costs
• Capital (Capex)
– Cost of Funding
(WACC)
– Regulatory Asset
Base (RAB)
– Capital
Expenditure
• Depreciation
• Operational
expenditure (Opex)
• Taxes and Charges
2014/15 figures (current level of service)
Capital Expenditure (part of the 49%) • Additional capital expenditure of $1m p.a. on a long life asset (50 year life) will result in an additional $0.45 on a typical residential customers bill per annum over the five year period.
The balance CAPEX expenditures • Contribution to the overall costs of the network, Safety • Must meet minimum mandated requirements Capital Reliability • Equity for all customers Operations Availability – High cost we over invest and potential loss of returns loss of customers to other competing energy providers – Prudent & Efficient cost we get the forecasts and estimates right and AER approve expenditure – Low cost we have network constraints that limit customer connection, increase operational costs, increased outages and loss of customers to competing energy providers.
CAPEX project priorities 2016-2021
• During the 2016/17- 2020/21 period we have the
following CAPEX priorities:
– Growing (connecting New Customers)
• West Belconnen
• Prospect & Denman
• Moncrieff secondary
– Growing our capacity
• Molonglo
• West Belconnen
– Stay in Business
• Fyshwick station upgrade for high flow
• Integrity assessments
• Metering
Capex expenditure comparison
CAPITAL COMPARISON AA11-15 $110m
CAPITAL COMPARISON AA16-21 $90m
1%
1%
30%
32% 42%
48%
21% 28%
Non Distribution Stay In Business
Non Distribution Stay In Business Capacity Development Market Expansion Capacity Development Market ExpansionGrowth Areas
Market Expansion Projects $45m
Name Description Driver
Extension of the network towards West Belconnen,
Gungahlin; new reticulation of mains as well as connection of
Gungahlin town centre, Ngunnawal, Casey, to supply new estate areas beyond the current
new homes, new medium density and high rise coverage of the network.
Moncrieff, Bonner, Amaroo and Crace with
residential and commercial customers
planning underway for Throsby
new reticulation of mains as well as connection of Extension of the network towards West Belconnen,
Belconnen;
Belconnen town centre, Lawson and Bruce new homes, new medium density and high rise to supply new estate area beyond the current
with planning underway for West residential and commercial customers coverage of the network.
Belconnen.
Inner North;
Major redevelopments in City, Braddon and
Dickson along proposed light rail route, new reticulation of mains as well as connection of
section 5 Campbell, Canberra Airport new homes, new medium density and high rise To support ongoing growth in Gungahlin.
commercial developments and planned residential and commercial customers
redevelopment of Constitution Avenue and
City to Lake project
Molonglo Valley; new reticulation of mains as well as connection of
Wright, Coombs, North Weston and new homes, new medium density and high rise Support reliability of supply to local areas/streets
planning underway for Denman Prospect. residential and commercial customers
Tuggeranong;
Greenway
Woden Valley;
Woden town centre commercial and high new reticulation of mains as well as connection of The Belconnen area is forecast to develop quickly
rise developments. new homes, new medium density and high rise
Inner South; in the industrially zoned area preferred, and this will
residential and commercial customers secure the optimal location allowing deferral of
Yarralumbla Brickworks redevelopment,
Kingston Foreshore, Barton. other works in the area.
Queanbeyan;
Googong and TraleeCDP Projects $30m
Name Description Driver
Lay 3.5 kms of 250 mm ST main from Phillip PRS (Woden Town
Centre) along Tuggeranong Parkway to Heysen Street.
Lay 500 m of 100 mm ST to connect with the secondary network
Molonglo Primary Extension Stage 1 along Heysen Street. Support staged growth in the
(and PRS) Molonglo area.
The route is to be confirmed by a DA process.
This will be operated at secondary pressures until the installation of a
PRS at the end of Stage 3.
Lay 2.4m of 150mm ST (secondary main) from the existing 150mm
secondary in Gungahlin Drive along Horse Park Dr to the intersection with To provide reliability of supply
Mirrabei Dr, Moncrieff. to the new estates in
Moncrieff Secondary Extension CDP
Gungahlin (Casey, Moncrieff
Install a new 7,000m3/hr SDRS and connect to the medium pressure and Taylor).
mains.
Lay 4km of 200mm ST main from 100mm ST main in Streeton Drive To provide capacity for growth
to the Molonglo development. and reliability of supply to the
Molonglo Secondary CDP Stage 1
new estates in Molonglo
Install one 7,000m3/hr SDRS. (Wright and Coombes).
Lay 4.8km of 200mm ST continuing from Molonglo Stage 1 along
either Coppins Crossing Road or proposed road extension of John To provide capacity for growth
Molonglo Secondary CDP Stage 2 Gorton Drive. and reliability of supply to the
new estates in Molonglo
Install one 7,000m3/hr SDRS in Denman Prospect at end of extension
Secure Development Application (DA) approval for route.
To provide capacity for growth
Molonglo Secondary CD Project (Lay 3.2 km of 200mm ST main continuing from Molonglo Secondary and reliability of supply to the
Stage 3 Extension Stage 2 along Coppins Crossings Rd to the proposed new estates in Molonglo
location of Molonglo PRS to the north of the Molonglo River)CDP Projects
Name Description Driver
Lay 3km of 200mm ST from end of existing Extension of the network towards West Belconnen,
secondary main on Southern Cross Drive in Holt. to supply new estate areas beyond the current
West Belconnen Secondary Main
Extension (Southern Cross Drive West) Install new 7,000scmh SDRS. coverage of the network.
Secure Development Application (DA) approval for
route and works. Extension of the network towards West Belconnen,
West Belconnen Secondary Main
to supply new estate area beyond the current
Extension (Lay 3km of 200mm ST main westwards from end coverage of the network.
(Southern Cross Drive East) of existing secondary main on Stockdill Drive.
Install a 7,000scmh DR)
Secure Development Application (DA) approval for
route and works.
Taylor Secondary Extension CDP (Lay 4km of 150mm ST main along Horse Park To support ongoing growth in Gungahlin.
Drive from end of Moncrieff secondary extension.
Install a DR at the end.)
Medium Pressure projects are supported by
indicative project listing mains in Capital Plan and
allocations to support field and modelling identified
Medium Pressure Mains areas. Support reliability of supply to local areas/streets
Actual projects can be expected to vary based on
growth and usage due to the very localised nature
of the Capacity modelling.
The Belconnen area is forecast to develop quickly
Belconnen Primary Regulating Station in the industrially zoned area preferred, and this will
Secure land for future Belconnen PRS site
(PRS) – Secure Land secure the optimal location allowing deferral of
other works in the area.SIB Projects $34m
Name Description Driver
Undertake relocation of ring mains to address
implications from potential third party damage, Reduce risk of potential gas build up in
100kPa Ring Mains
building changes and/or pipework or meter set enclosed areas
regulator failure.
Install a main line isolation valve on the Support operations emergency management
Canberra Primary Main Isolation Valve
Fyshwick to Watson Primary Main and possible repairs.
Upgrade skid, flow control and Install second Support increased load, throughput and supply
Hoskinstown CTS Upgrade
run, additional valves and gas panel nominations
Integrity Program Integrity and Validation digs Support integrity management
Mixture of Planned and Reactive replacement,
including statistical sampling to see if asset Maintain accurate meters in accordance with
SIB Metering Program
class life can be extended for optimal current standards
replacement
Update Paddock markers to address
Paddock Markers – Primary and Secondary
standards, visibility and support protection of Support integrity management
Mains
one-way feeds
Replace non-conforming electrical equipment Ensure compliance with standards improving
HP Station Electrical and Instrumental (E&I)
at High Pressure (HP) Trunk and Primary site safety, security and lower long term
Upgrade Program
Facilities operating costs through standardisation
Assess requirements and design for future
Watson + Phillip PRS assessments upgrade to provide price certainty for next AA Meet future demand and supply security
periodOPEX Costs 42% of our building block cost • An additional Operations and Maintenance costs of $1m p.a. over a five-year period results in an additional $6.75 p.a. to a customers bill
OPEX priorities During the 2016/17- 2020/21 period we have the following OPEX priorities: Routine Operations and maintenance • Maintaining 4,900 km network, particularly trunk and Primary mains and associated pressure reduction facilities • Attending to over 500 p.a. third party activities working near our assets • Responding to 200 incidents p.a. that require make safe. Sometimes multiple on same day, Typically 15% of these require significant resources for > 1 day • Routine overhauls and operational checks of 8 high pressure facilities and 93 district regulator sets and 798 major meter sets.
New OPEX priorities Opex step changes Requirement/ Driver Non-recurrent/ recurrent National B2B harmonisation Change in regulatory obligation Recurrent Access Arrangement review Regulatory obligation Periodic IT Asset Utilisation Fee Capex driven/net benefit Five year one-off National Energy Consumer Framework Change in Regulatory Obligation Non Recurrent Renegotiation of Hoskins town CTS O&M contracts Good industry practice Recurrent? Emerging Retail Market Procedure changes Change in regulatory obligation Recurrent? Compliance to revised technical codes for metering Change in regulatory obligation Recurrent Exposed main inspections Good industry practice Periodic Fyshwick TRS Upgrade Capex driven Recurrent Hoskinstown CTS upgrade Capex driven Recurrent Hume PRS Capex driven Recurrent Periodic water bath neater inspections Capex driven Recurrent/ periodic Annual OPEX cost increase $2.5m
Building blocks • The Capex and Opex outlined are key components of determining our required revenue. • next presentation will explore this
What can you do – Tell us where you would feel we should or should not be investing in Canberra's future? – Our plan aligns to our 5 year objectives – Remember we are part of the competitive energy market
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