PNGL Final Decisons FINAL
| Year | 2012 |
| Published date | 10 January 2012 |
| Energy Sector | Gas |
Phoenix Natural Gas Limited
Price Control Review
2012-2013
Final Decisions
January 2012
2
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY ................................................................................................................................ 6
Introduction .............................................................................................................................................. 6
Our Statutory Duties ................................................................................................................................. 7
Update from Draft Proposals .................................................................................................................... 9
Summary of Approach .............................................................................................................................. 9
Summary of Decisions ............................................................................................................................. 13
Next Steps ............................................................................................................................................... 14
2 INTRODUCTION ....................................................................................................................................... 15
Update from Draft Proposals .................................................................................................................. 15
Company Overview ................................................................................................................................. 15
Background to the Price Control ............................................................................................................. 15
3 APPROACH ............................................................................................................................................. 17
Update from Draft Proposals .................................................................................................................. 17
Our Statutory Duties ............................................................................................................................... 17
Regulatory Principles .............................................................................................................................. 20
Form of Price Control .............................................................................................................................. 21
Duration .................................................................................................................................................. 21
Indexation and Efficiency Targets ........................................................................................................... 21
4 PNGL PRICE CONTROL SUBMISSION ........................................................................................................... 23
Update from Draft Proposals .................................................................................................................. 23
Introduction ............................................................................................................................................ 23
Operating Expenditure ............................................................................................................................ 23
Capital Expenditure ................................................................................................................................. 24
PNGL Connection Assumptions .............................................................................................................. 24
Environmental Benefits........................................................................................................................... 25
PNGL12 Outputs versus PC03 Outputs ................................................................................................... 25
5 OPERATING EXPENDITURE ......................................................................................................................... 27
Update from Draft Proposals .................................................................................................................. 27
Introduction ............................................................................................................................................ 28
3
Our Connection Assumptions ................................................................................................................. 28
Smaller Items .......................................................................................................................................... 29
Advertising, Marketing and PR ............................................................................................................... 34
Emergency Costs ..................................................................................................................................... 39
Incentives ................................................................................................................................................ 39
Insurance ................................................................................................................................................. 39
Manpower ............................................................................................................................................... 40
Network Maintenance ............................................................................................................................ 42
Opex Summary ........................................................................................................................................ 46
6 CAPITAL EXPENDITURE ............................................................................................................................. 47
Update from Draft Proposals .................................................................................................................. 47
Introduction ............................................................................................................................................ 47
Overview ................................................................................................................................................. 47
7 Bar Mains ............................................................................................................................................. 49
4 Bar Mains ............................................................................................................................................. 49
Pressure Reduction Stations ................................................................................................................... 50
Feeder Mains .......................................................................................................................................... 50
Infill Mains ............................................................................................................................................... 50
Domestic Services ................................................................................................................................... 52
Domestic Meters ..................................................................................................................................... 53
I&C Services............................................................................................................................................. 53
I&C Meters .............................................................................................................................................. 54
Other Capex Items .................................................................................................................................. 54
Traffic Management Act ......................................................................................................................... 55
Capex Summary ...................................................................................................................................... 56
7 REGULATORY MODEL ............................................................................................................................... 57
Update from Draft Proposals .................................................................................................................. 57
Introduction ............................................................................................................................................ 60
Cost of Capital ......................................................................................................................................... 60
Depreciation ............................................................................................................................................ 61
Total Regulatory Value ............................................................................................................................ 61
Allowed Revenues and Impact ................................................................................................................ 67
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