ETSA Utilities Proposing $2.8 Billion Investment in South Australia

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.

CEO Lew Owens said over the past 10 years ETSA Utilities had been a cost-efficiency leader amongst Australian electricity distribution businesses, delivering real reductions in distribution costs to customers and improving customer service.

"ETSA Utilities has undertaken a significant review of the complex issues that we and the electricity industry face. We have consulted extensively with government, customers and the broader community on their expectations. This extensive process over the past year has confirmed our current direction and the sector?s emerging challenges," Mr Owens said.

"The proposed increase in investment is required so South Australians can achieve the things they want, in business, at home and in the community, and so the network is positioned to meet current and emerging industry-wide challenges."

Owens said 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," 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."