Capital Contributions Review

Power and Water is reviewing its Capital Contributions regime. This review will see the existing Distribution System Extension Policy (DSEP) and the Networks Capital Contributions Policy (NCCP) replaced by a single new Networks Capital Contribution Policy.

What are Capital Contributions?

Capital Contributions are payments towards the development of Power and Water’s electricity network that may be required for new or upgraded connections to the network. The purpose of these contributions is to ensure that all electricity network users are charged appropriately for the services that Power and Water provides.

Power and Water’s Capital Contributions regime is set out in two existing separate policies:

• Distribution System Extension Policy (DSEP), covering extensions to unserviced areas and the development of serviced lots. Mostly this applies to small customers with an assumed typical consumption pattern and connection cost; and
• Networks Capital Contributions Policy (NCCP), applying to the new or upgraded network connections of larger network users and Generator network users.

The Capital Contributions regime was established in accordance with the provisions of the Electricity Networks (Third Party Access) Act .

Why are Capital Contributions changing?

Power and Water is reviewing the Capital Contributions regime as it has not been fully reviewed for over five years and no longer reflects the current regulatory climate. For example, instances have arisen where extension of the electricity network to outer suburban and rural areas has resulted in charges to network users under the current DSEP that fall well short of funding the lengthy network extensions involved. Similarly, there has been a number of instances where upgrades to serviced lots has resulted in charges to developers under the current DSEP policy that have fallen short of the actual funding required to complete the upgrades.

Power and Water is reviewing the existing Capital Contributions regime to:

• reflect the true cost of connection to Power and Water’s electricity network or any new or upgraded Network Access Services;
• ensure the commercial viability of connections made to Power and Water’s electricity networks;
• ensure more equitable outcomes for both new and existing networks users; and
• make the Capital Contributions process more efficient and simple for network users to follow.

How will Capital Contributions change?

Subject to the approval of the Utilities Commission, Power and Water will replace the two existing policy documents with a single new Networks Capital Contributions Policy document, to apply in a consistent manner to all classes of network user.

Who will be affected by the changes?

It is anticipated the proposed changes to the Capital Contributions regime will affect, to varying degrees:

• small users developing serviced lots and extensions to unserviced areas;
• large users (annual consumption of 750MWh or more);
• developers of serviced lots and subdivisions, amalgamations and re-zonings; and
• Generators

When will the changes to Capital Contributions come into effect?

Subject to Utilities Commission approval, it is anticipated changes to the Capital Contributions regime will come into effect from 1 January 2012.

Where can I get more information?

For more information view the presentation and Explanation of Changes documents or

Email: customerservice@powerwater.com.au or

Phone: 1800 245 092.