Distribution, Gas, Markets, Projects, Technology

Energy regulatory regime too complex: Envestra

The company is preparing to deliver the submission to the AER in South Australia and Queensland, and has said that it is now “well-advanced”? in organising the necessary material to support its position.

Envestra’s regulatory team has spent the past financial year preparing a review of the law for submission to the AER, and expects to deliver it on 1 October 2010.

“Key issues being addressed are the rate of return required to justify future investments, the planned network development and maintenance costs required to meet customer demand and to ensure a safe and reliable network performance,”? Envestra Chairman John Allpass said.

Mr Allpass also cited “the justification of proposed operating and capital costs”? and “the anticipated gas demand over the next five-year period”? as being of concern.

The company experienced steady growth in the 2009-10 financial year, but recorded a small decrease in reported profit after tax from the previous financial year.

Mr Allpass also said that a “˜settled policy’ would be needed from the Federal Government and Opposition on carbon emissions abatement in order to prevent “serious ramifications for the energy industry”?.

“Time is now of the essence, given the lengthy planning and approval process generally required for energy infrastructure investments,”? he said.

Mr Allpass added that he believes consolidation of the energy infrastructure sector will continue as companies seek to facilitate growth and release the value of assets in the face of “volatile debt and equity markets”?.

“Envestra’s participation in any such moves would be determined by whether they provide an overall benefit to our shareholders,”? he said.

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