This workshop is being hosted by TransGrid, you may not know who TransGrid is but hopefully you’ll learn more about us today.This is a pilot workshop which has not been done before. The workshop is being run by TransGrid to inform consumers (i.e. you) about energy topics and TransGrid’s role. We would also like your feedback on how you believe TransGrid can engage with consumers better going forward.The feedback received today is extremely valuable, and will be used to inform a Consumer Engagement Program.
How would you rate your level of knowledge about the ‘energy conversation’ from 1 to 100%
What part of the energy conversation are you interested in?[Tick from list provided][Facilitator to ask for a volunteer to scribe]Why? [Request that someone report back to the group]
Capital expenditure needed to build new or larger parts of the network and replace ageing equipment (buying a new car)Costs required to maintain the existing electricity network (oil change and new tyres for your car)Costs required to run the business, eg, pay salaries, cost of offices, IT systems and finance debt (petrol, car insurance and pink slip)The investments TransGrid makes to: replace ageing equipment that is in poor condition (car too old and expensive to repair)build new equipment to meet customers demand for electricity (growing family needs a larger car with more seats)the network is designed, built and maintained to standards specified by the NSW Government
2004-09– Significant increases in peak demand growth (summer peak was growing by 3.5% a year at this time) required TransGrid to increase the capacity of the network. Shifting peak demand growth to 3.5% from the long run average 2% growth rate implied almost a halving of the investment time line (ie, what we would have built in 35 years was shortened to a 20 year investment plan)2009-14 – Sustained growth in peak demand with significant increase in northern NSW and far northern NSW. This combined with aging assets significantly increased the amount of infrastructure to be built.2014-2019 – Reduced demand in parts of the state is enabling TransGrid to defer significant amounts of infrastructure. Old assets that were initially identified to be replaced in 2009-2014 are now able to be kept in service past their prior expected retirement dates.Old Assets Driving ReplacementTG Oldest TL - 1952 (61 yo) 97532.824kmQueanbeyanRoyalla 132kV TLNSW (Essential Energy) Oldest TL - 1930 TL - 96C 27.8km section between Yetholme and WallerawangOldest Substations1950 Burrinjuck Substation1954 Cooma Substation1955 Wagga 132 SubstationOldest Transformers 1955 Munyang 30MVA (58yo)1955 Narrabri 30MVA (58yo)CAGRCustomer Demand7.6%Asset Replacement7.0%Support the Business 3.1%
ADDITIONAL NOTES ADDEDThe business costs: to maintain the network (oil change) to operate the network (drivers) to run the business (petrol, insurance, pink slip)Average Annual Growth RateOPEX:Plan, Maintain and Operate the Network 3.7%Property Management -2.0%Taxes and Insurance 4.0%Corporate, Business and Regulatory Management 1.7%Property ManagementIncludes (FY 11/12 Reg Accounts):* Rent (Elizabeth St etc) - 44%* Labour - 39%* Outsourced property mgt, maintenance (cutting the grass etc), consumables etc 17%Groupings of OPEX categoriesPlan, Maintain and Operate the networkincludesMaintenanceMaintenance Support & Asset ManagementOperations / Control RoomGrid PlanningTaxes and InsuranceincludesTaxes and InsuranceSelf-insuranceCorporate, Business and Regulatory Management includesCorporate and Regulatory ManagementBusiness Management
Working within pairs at your tables….Do you have any comments? i.e. does any particular area interest you? [facilitator to ask ppl to think about their personal situation – are they a business owner? Do they worry about how TransGrid is developing its forecasts? What if they heard that a consultation was happening where a new overhead line could end up near their home? How would they feel about that?]Would you get involved or access this information? Why/why not?How can we improve our engagement with you on these factors?
What is important to you about our capital/operating expenditure? Why? What specifically would you like to know more about? What is the best way for us to communicate this with you?
We want to inform and educate you about the topicsSome things are within TransGrid remit to influence others aren’t….Please work within your tables for the following exercises
Next three slides should be next to each other Network investment Alternatives to network investment Price versus reliability
This section should be used as a prompt to explore consumers views on: Network renewal Non network options to address AER topics.
Group activity Are you interested in this hot topic? Yes/NoWhy/why not?What’s the best way to engage you on this?
Next three slides should be next to each other
[nb. this slide is linked to the next slide]AER issue: setting reliability targetsTransGrid Energy Not Supplied:2012 – 3 events28/03/2012 CB failed 17:11pm to 17:37pmLoad restored in 26minutes –Endeavour Energy’s Mt Druitt and Mamre S/S 27.4MWh interrupted (approximately 166,000 based on point 2 below).27/05/2012 Tx tripped at same time as AusGrid 97E Charmhaven - Munmorah out of service.110,000 Ausgrid Central Coast customers lost supply11:27am to 11:35am & 11:43amSome load restored in 9minutes, the remainder stored in 18minutes (9minutes later)18.13MWh18/12/2012Destructive CB failure caused OHEW to fall on A1 bus.Endeavour Energy’s feeders 217,218 Sydney West - Eastern Creek 5:14am to 10:43amEnergy restored in 5hours 29 minutes - 5.48MWhAustralian Energy Market Commission is reviewing reliability levels for Distributors (AusGrid, Endeavour, Essential Energy). They found*:save $3 a year for a 2 minute increase in supply interruptions save $12 a year for a 13 minute increase in supply interruptionssave $15 a year for a 15 minute increase in supply interruptionsPay +$11 a year for a 4 minute reduction in fewer supply interruptions a yearSimilar studies are yet to be completed for TransGrid.**Each change in $dollar is expected to have a greater/lessorimpact on customers bills and a lessor/greater impact on customer supply interruptions*AEMC, FINAL REPORT Review of Distribution Reliability Outcomes and Standards 31 August 2012 http://www.aemc.gov.au/market-reviews/completed/review-of-distribution-reliability-outcomes-and-standards.html**Reliability Standard and Settings Review 2014 http://www.aemc.gov.au/market-reviews/open/reliability-standard-and-settings-review-2014.html
What do you think about this?
Pricing can deliver different equity objectives or it can focus on efficiency (of investment and use) objectives. Current arrangement is broadly equity focused with a high degree of sharing of costs, albeit with some locational elements.
TransGrid presentation consumer engagement
Consumer engagement roundtable
Hosted by TransGrid
Welcome and some ground rules…
We really value what you have to say:
Please help us by making sure that only one
person talks at a time
Personal confidentiality is assured – no feedback
will be attributed to individuals
There are no right or wrong answers to questions
– just ideas, experiences and opinions
It is important for us to hear all sides of an issue –
both the positive and the negative.
6.00pm - Welcome and introductions
6.30pm - Presentation one - introduction to the new energy
conversation and TransGrid’s role
7.10pm - Break
7.25pm - Part two: empowering consumers
7.55pm - Break
8.15pm - Part three: the AER’s hot topics
8.55pm - Close
Introduction to the new energy
conversation and TransGrid
Presented by Stephen Clark, TransGrid
Over the next two decades, Australia will need to deliver
secure, reliable and competitively priced energy for a
growing population and economy.
Today we would like to discuss:
• The new energy conversation;
• TransGrid’s role and the impact to you as a consumer; and
• Ask for your feedback about what’s important to you and
how you would like to get involved moving forward.
The energy conversation explained
National and State
Future electricity demand
Building new transmission
lines and substations
Facilitating competition in
Maintaining and operating
price and reliability
Energy to you
How energy gets to you
innovation e.g. smart
Prices – setting, design &
TransGrid has a statutory duty to deliver high voltage electricity from
power generators to the distribution network that supplies power to homes
and businesses. TransGrid’s electricity transmission system includes:
Over 12,772km of overhead
transmission line and
More than 91 substations and
Did you know?
You have a choice of retailer
(the company that sends you
your electricity bill) but all
electricity is delivered along
the same set of transmission
and distribution lines...
The transmission network can be seen as being
similar to freeways and motorways where the
distribution network, can be seen as the small roads
and streets in towns and suburbs.
What makes up my bill?
Transmission network – transporting
electricity from power stations at high voltage
*IPART Fact Sheet - Regulated Retail Prices
Distribution network – transporting it from the
highway to your home or business (your local
The carbon price and State and Federal
government green schemes
- Getting involved in our business
A transmission business has no
The Australian Energy Regulator
(AER) is there to keep the
business focussed on minimising
its costs and keeping its prices low
Every 5 years TransGrid proposes
to the AER what costs it expects to
incur to run the business
What does the AER do?
Spends almost a year reviewing, analysing and
testing the business plans
Arrives at a decision on how much revenue the
TransGrid has a strong incentive to manage its
costs below the AER allowance to make a profit
What information does the
AER get from the business?
Capital expenditure forecasts
Costs needed to build new or larger parts
of the network and replace ageing
Operating expenditure forecasts
Costs required to maintain the existing
Costs required to run the business, e.g.
pay salaries, cost of offices, IT systems
What are your thoughts?
TransGrid consults with stakeholders and communities
impacted by its works - for example, when proposing to
build new infrastructure
TransGrid also consults with industry and interested
stakeholders via the Annual Planning Report which sets
out future investment plans
TransGrid’s capex and opex expenditure forecast
proposal is a public document and the regulator seeks
How do you want to be involved?
Group 1 & 2 - are you interested in finding out more about
TransGrid’s capital expenditure forecasts?
Group 3 & 4 - are you interested in finding out more about
TransGrid’s operating expenditure forecasts?
Which part are you particularly interested in? Why?
What do you think is the best way TransGrid can
communicate this with you?
Capital expenditure investment
Alternatives to network investment
Price versus reliability
Price setting and design
Considerations before building new infrastructure include…
Network investment process
• Route corridor
• Community impacts
• Lowest cost
Alternatives to network investment
TransGrid has two options to meet growth in electricity demand
by building additional capacity; or
funding alternatives to network investment
Examples of alternatives:
Paying privately owned standby generators to operate at times of
Paying large energy users to switch off or reduce their electricity
usage at times of peak demand
Paying many small energy users to allow the network to control some
of their energy usage
Price versus reliability
Electricity networks are built to set reliability
standards and these investments come at a cost
Changing reliability standards can change prices
But power cuts have a cost for customers too
Inconvenience at best
Loss of stock
Loss of sales
Loss of production time
The level of risk can be compared to
having spare tyres in your car.
Standards are set by the NSW Government
Currently under review by the Australian Energy
Market Commission (AEMC)
Recent studies in the distribution sector found that
for a 15 minute increase in power cuts, you could
save $15 a year.
For transmission the equivalent reduction in your bill is
likely to result in longer power cuts
Is the reliability and
price balance right for you?
TransGrid is participating in the current national
review of reliability standards
We would like to know:
Should the current standard be changed?
i.e. Should we pack a spare tyre?
What is important to you? i.e. Keeping the current standard or
increasing the level of risk of a power cut for a slightly less electricity bill?
You can also participate directly with the AEMC.
Price setting and design
The Australian Energy Regulator determines the revenue a business
can earn each year
The National Electricity Law and its Rules specify how this revenue
should be translated into prices
Transmission prices have a location element and a shared element
reflecting common assets all customers use i.e. Your bill can vary according
to how far away from the main transmission lines you live, how much you use or if you
use electricity at peak times e.g. using air conditioners on hot days.
Are there better ways to
price our services?
Different tariff designs can result in different price
outcomes for customers
We would like to know:
What do you think about current price structures?
Are there better ways of pricing transmission
The feedback received from you during this
session will help TransGrid develop a consumer
The program will provide an approach for
TransGrid to begin engaging consumers about
business forecasting, tariff setting, reliability and