SA Power Networks asks energy regulator to approve $62 bill saving and more spending on country power network

With the oldest network and most spread out customers in the nation, South Australia’s power system is frayed at the edges. Regional customers deserve better, the electricity distributor says — and it wants $1.7 billion to make it a reality.

• SA electricity supply faces risk from deteriorating Victoria system
• Australian Energy Regulator tells SA Power Networks to cut bills

Regional South Australians should not be denied a reliable electricity system, SA Power Networks says in an appeal to increase its capital investment.

“It is not equitable for some customers to be without power for days on end,” SAPN chief executive Rob Stobbe said.

In an application which also increases proposed savings for all SA households to $62 a year, the electricity distributor has told the Australian Energy Regulator it wants to employ “targeted spending to avoid the issues customers face living at the edges of our network or being subject to repeated patterns of extreme weather”.

“It also is not equitable for us to ‘kick the can down the road’ as our stakeholders now categorise the very real risk that by deferring expenditure on an ageing network today, we push additional costs onto future years and onto the next generations of customers,” Mr Stobbe said.

SA Power Networks chief executive Rob Stobbe.

The regulator is in the middle of a formal process to determine how much revenue SAPN can earn from July 2020 to June 2025.

SAPN first applied to the regulator in January with a proposal which would save an average residential customer $40 a year for 2020-21.

That application included capital expenditure of $1.74 billion.

The Australian Energy Regulator responded by saying SAPN needed a tighter rein on spending and cut $300 million from SAPN’s proposed revenue of $4.2 billion.

The regulator said capital spending should be cut by nearly $500 million.

In its revised application lodged over the weekend, SAPN has increased estimated savings for residential customers to $62 a year.

“The average annual cost for electricity distribution services for SA households will be the lowest in real terms for a decade,” SAPN spokesman Paul Roberts said.

SAPN is fighting to upgrade ageing powerlines and equipment in regional areas.

Deep cuts to capital spending would “introduce an unacceptable risk of increased network asset failure”, it said.

The average age of assets was now nearly 45 years.

About 60,000 of the state’s 860,000 homes and businesses had “far worse reliability” than most and deserved better, SAPN said.

Accordingly, SAPN wants to keep capital spending at $1.71 billion.

The Essential Services Commission of SA, which monitors SAPN’s performance, records big differences in reliability by region.

In the nine months to the end of March, Adelaide CBD customers had an average eight minutes of interruption to their power.

In greater Adelaide, average interruptions totalled a bit more than one hour but in the Eyre Peninsula and Kangaroo Island this approached five hours.

Very remote customers can be without power for days due to incidents such as lightning strikes on aged powerlines without modern insulators.

The AER is inviting public submissions on the revised SAPN proposal until mid January, ahead of making a final determination in April.