ETSA Utilities is proposing to invest $2.8 billion in expanding and improving South Australia's electricity distribution network over the next five years - more than double the investment made in 2005-2010.

ETSA Utilities has lodged its funding submission for 2010-2015 with the Australian Energy Regulator (AER), which will determine the allowable level of network investment and return. The submission will be subject to a rigorous review process, including public consultation, with the AER's final determination due in April 2010.

 Increased investment will ensure the network will:

• support the strong growth and gradual restructuring of the state?s economy based on mining, defence and tourism;
• meet the demands of the huge program of State infrastructure investment in water and public transport;
• have the capacity and robustness to meet high airconditioning loads during extended heat waves;
• progressively replace and augment aging assets;
• provide a platform for 'smart network' technologies; and
• support mandatory changes in the transmission sector, which will improve supply security to the CBD and other areas.

The planned investments span across the state with a range of metropolitan and regional projects (see examples next page).

"Customers, large and small, are less tolerant of power outages than in the past - households and business have far more air conditioning and sensitive electronic equipment and we expect this trend to continue," CEO Lew Owens said.

"It is important that we can fund the necessary expenditure to meet stakeholder expectations and priorities - South Australia's economic future depends on it.

"Naturally, to achieve that, there will be some impact on electricity bills. On the basis of our estimates we anticipate the electricity bill for the typical residential customer (annual bill of about $1,100) will rise in real terms by about $25 each year of the regulatory period."

Background - Regulatory submission for 2010-2015

Every five years, the Regulator (now the Australian Energy Regulator - AER) must hand down a determination establishing the level of reliability and customer service to be achieved by ETSA Utilities in managing the SA electricity distribution network and accordingly setting prices to apply for their achievement.

The determination is made on the basis of a Regulatory Proposal submitted by ETSA Utilities.

The ETSA Utilities proposal for 2010-2015 balances the need to achieve service levels and sustainably address new stakeholder expectations, while managing risk, obtaining a commercial return and delivering reasonable price outcomes for customers.

In its determination the AER must contribute to promotion of "efficient investment in, and efficient operation and use of, electricity services for the long term interests of consumers with respect to: price, quality, safety, reliability and security of supply of electricity; and the reliability, safety and security of the national electricity system."

The AER will issue a draft determination in late November 2009 and its final determination in April 2010, with the new regulatory period commencing 1 July 2010.