Ausgrid network prices to fall 6% under our new Proposal

Embargoed 11am May 6, 2018

Ausgrid today proposed a 6% reduction in its network prices from July 1, 2019 following customer and stakeholder consultation on its 2019-24 Regulatory Proposal (the Proposal).

Ausgrid has submitted the Proposal to the Australian Energy Regulator (AER) for assessment.

Ausgrid CEO Richard Gross said the Proposal sets out how much the business needs to invest in the next five years to deliver affordable, reliable and sustainable network services to its 1.7 million customers in Sydney, the Central Coast and the Hunter.

He said Ausgrid will provide customers a 6% reduction in network prices and then prices will remain unchanged in real terms over the next four years to 2024.

“We’ve talked to our customers, we’ve listened and we’ve cut our network prices and we will keep listening,” he said.

“At the same time, Ausgrid will make sure the network is reliable and sustainable. “We are also making sure the Ausgrid network is ready for a future where renewables and distributed energy resources play a major role in the power mix.

In the future, more households and businesses will choose to generate their own electricity and sell it back via the grid.” Mr Gross said “While affordable energy is a major concern for customers, they also expect the network to be reliable, keep the lights on and for us to help them transition to a lower carbon economy.

“The grid will become a more flexible platform, which will be at the heart of future energy exchanges and we will support this transition while continuing to put downward pressure on our prices. Ausgrid has already cut operating costs by 19% since 2013. This equates to a $76 saving per customer per year.

Overall, Ausgrid's network component of customers’ bills has reduced by 30% from July 2013. Mr Gross called for greater transparency in end use customer billing to enable customers to better understand the components contributing to their power bill.

“Customers rightly want to know how and why they are being charged for their energy and we support greater transparency in billing.” Media Release (continued) 2 “Our vision is to be a leading energy solutions provider, recognised globally and locally and we believe our approach - laid out in our proposal to the AER - sets us on that path by listening and responding to our customers’ concerns.”

Strategies outlined in the Proposal include:

• A sustainable capital investment strategy to ensure a reliable grid that also explores alternatives to capital investment over the period
• Better utilisation of existing capacity and only investing to replace assets when there is no alternative
• Increased investment in innovation by conducting trials and investing in new technologies
• Zero real growth in the value of our assets per customer
• Maintenance of reliability by optimising operational expenditure and capital expenditure to manage outage risks and improve response times  Expansion of the grid to support growth areas eg Macquarie Park, (data, telco, education) and in Rozelle (future transport connections)
• Invest $335m a year to replace ageing assets and $43m a year in technology (including cyber security)
• Invest $41 million in the Advanced Distribution Management System (ADMS) software platform to support the transformation of our network to a smart network.
• Invest $58 million to deliver the 'future grid' sooner (including trials allowing customers to generate, store and manage power)
• Demand Management Incentives Fund - continuation of partnerships with customers to encourage use of batteries, smart meters, smart appliances and innovative rebate offers