Electricity distribution

The figures below presents the historical SAIDI and SAIFI outcomes for each of the three NSW distribution businesses since 2006, and compares it with the outcomes of the other distribution businesses in the NEM.⁴⁴ For both SAIDI and SAIFI, a lower figure represents a better level of reliability (ie, the average duration of interruptions experiences by customers is shorter, and customers experience fewer such disruptions).

43 AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389

44 We have used the data reported by the network businesses in their most recent responses to the AER’s Regulatory Information Notice (RIN), as this represents a consistent data source across the businesses.

HoustonKemp.com 24 Figure 5: Distribution reliability has comparable in NSW to other states, SAIDI

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389

Note: SAIDI figures are whole of network unplanned SAIDI, excluding excluded outages (exclusive of Major Even Days).

Figure 6: Distribution reliability is comparable in NSW to other states, SAIFI

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389

Note: SAIFI figures are whole of network unplanned SAIFI, excluding excluded outages (exclusive of Major Event Days).

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

2006 2007 2008 2009 2010 2011 2012 2013

SAIFI (interruptions/customer)

Ausgrid Endeavour Energy Essential Energy All other DNSPs in the NEM

HoustonKemp.com 25 In interpreting the figures it is important to remember that the different distribution businesses face different reliability standards, which will be an important factor in leading to different reliability outcomes. Differences in standards typically reflect differences in the geographic location of the networks, which in turn lead to differences in factors such as customer density and expected weather conditions, as well as the nature of network infrastructure (eg, ‘long and stringy’ versus more

‘meshed’ networks). The exact definition of the reliability measures used also differs across the different businesses.

The figures indicate that:

1. the reliability performance of both Ausgrid and Endeavour has traditionally been comparable to that of other distribution businesses in the NEM; and

2. the reliability performance of Essential Energy (which covers customers in rural NSW) has been below that of other distributors, with the exception of Ergon Energy (which is also predominantly a rural distributor). However, the required reliability standards for Essential’s network overall allow for a greater level of interruptions compared to other urban distributors, reflecting the predominantly rural nature of its network⁴⁵ and the higher costs associated with achieving higher reliability levels for that type of network.

Figure 7 and Figure 8 below present the same data, but this time highlight the historical SAIDI and SAIFI for those distribution businesses in the NEM that are privately owned (ie, those in Victoria and South Australia) compared with those that remain in public ownership.

The figures highlight that the reliability performance of privatised distribution businesses is relatively high compared with the publicly owned distribution businesses, and has generally remained constant or improved over time. On the basis of the data presented the reliability performance of the privately owned businesses is comparable to publicly owned businesses. Again however, care must be taken in interpreting these figures, as the businesses are subject to different reliability standards and some have a significant rural component.

45 That is, short rural and long rural feeders, where the reliability standards allow for a greater level of customer interruptions, make up a greater proportion of its network than for other distribution businesses.

HoustonKemp.com 26 Figure 7: SAIDI performance of privately owned distributors is comparable to public businesses

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389 Note: SAIFI figures are whole of network unplanned SAIDI, excluding excluded outages (exclusive of MEDs).

Figure 8: SAIFI performance of privately owned distributors is comparable to public businesses

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389 Note: SAIFI figures are whole of network unplanned SAIFI, excluding excluded outages (exclusive of MEDs).

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4.2 Electricity transmission

The figure below compares the historical reliability performance of the major transmission networks in the NEM, and for Western Australia, using energy not supplied (in system minutes) as a measure. The lower the level of energy not supplied, the more reliable the network. Based on this measure, New South Wales and the Australian Capital Territory have enjoyed the most reliable transmission network of all the states, over the period since 2002/03.

Figure 9: Annual Energy Not Supplied in NEM jurisdictions from 2002/03 to 2011/12

Source: TransGrid, Revenue Proposal 2014/15 – 2018/19, p. 20.

We have also looked at data on transmission outages reported by the transmission businesses to the AER, in its recent request for benchmarking data. Figure 10 below compares data on the average outage duration for TransGrid with all other transmission businesses in the NEM, since 2006. It shows that TransGrid has achieved a comparable level of reliability to the other transmission businesses.

Figure 11 below presents the same data, but this time highlights the performance outcome for those transmission businesses that are privately owned (ie, SP AusNet (Victoria) and ElectraNet (South Australia)). The figure shows that the privately owned transmission businesses again have a comparable level of reliability (as measured by the average outage duration) compared to the government owned businesses. It also indicates that the level of performance has remained at a similar level over time.

HoustonKemp.com 28 Figure 10: Transmission reliability is comparable in NSW to other states

Note: The spike in 2007 is for Powerlink and is largely a result of a lightning strike that caused a double transformer failure at Collinsville in early 2007.

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389

Figure 11: Privately owned transmission businesses have a comparable level of reliability to publicly owned businesses

Note: The spike in 2007 is for Powerlink and is largely a result of a lightning strike that caused a double transformer failure at Collinsville in early 2007.

Source: AER Economic Benchmarking RIN Responses – available at: http://www.aer.gov.au/node/24389

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