Footnotes

Chapter 1 - Introduction

[1]        Journals of the Senate, 2013–15, no. 59 (2 October 2014), pp. 1586–87.

[2]        Journals of the Senate, 2013–15, no. 79 (2 March 2015), p. 2203.

[3]        These letters were published as Submission 65 and as a supplementary submission (Submission 65.1).

[4]        The interim report may be viewed online at www.aph.gov.au/Parliamentary_Business/‌Committees/Senate/Environment_and_Communications/Electricity_and_AER/Interim_Report.

Chapter 2 - Allegations regarding the performance and management of Energex

[1]        The overall rate of return is estimated using a 'vanilla' WACC, which is a weighted average of the return on equity and the return on debt. For more information, see paragraph 4.42–4.43 of the committee's first interim report.

[2]        Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 2.

[3]        Ms Cally Wilson, Submission 68, p. 1.

[4]        Ms Cally Wilson, Submission 68, p. 1.

[5]        Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 6.

[6]        Energex, Submission 14, pp. 9–10.

[7]        Mr Terence Effeney, Chief Executive Officer, Energex, Committee Hansard, 16 February 2015, p. 6.

[8]        Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 6.

[9]        Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 3.

[10]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 7. The WACC included in Energex's October 2014 regulatory proposal was 7.75 per cent. See Energex, 'Our five year future plan: Regulatory Proposal Overview 2015–2020', Tabled document 4, p. 32.

[11]      Energex, Submission 14.1, p. 4.

[12]      Energex, Submission 14.1, pp. 6–7.

[13]      Energex, Submission 14.1, p. 8.

[14]      Mr Terence Effeney, Energex, Committee Hansard, 16 February 2015, p. 6.

[15]      Ms Cally Wilson, Submission 68, p. 1.

[16]      The submission to the AER was received and published by the committee as Attachment 1 to Ms Wilson's submission (Submission 68).

[17]      Ms Cally Wilson, Submission 68, Attachment 1, p. 2.

[18]      Ms Cally Wilson, Submission 68, Attachment 1, p. 2.

[19]      Ms Cally Wilson, Committee Hansard, 24 March 2015, pp. 10–11.

[20]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 11.

[21]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 3.

[22]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 4.

[23]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 11.

[24]      As explained in the first interim report, both capital expenditure (capex) and operating expenditure (opex) are received from customers (up to the forecasts approved by the AER). However, opex is recovered from customers over a single regulatory control period (typically five years), based on the AER's determination of the base year opex and the rate of change. Capex is added to the regulatory asset base (RAB), which is multiplied by the allowed rate of return and then passed on to consumers. The RAB is rolled forward from one regulatory control period to the next with an adjustment to account for actual inflation. See Interim report,
pp. 30–34.

[25]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 8.

[26]      Ms Cally Wilson, Submission 68, Attachment 1, pp. 2–3.

[27]      Ms Cally Wilson, Submission 68, Attachment 1, p. 3.

[28]      Ms Cally Wilson, Submission 68, Attachment 1, p. 3.

[29]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 4.

[30]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 11. 'Big four' refers to the largest international audit firms: Deloitte, EY, KPMG and PricewaterhouseCoopers. In Australia, these firms audit 95 per cent of listed entities by market capitalisation. See Senate Economics References Committee, Performance of the Australian Securities and Investments Commission: Final report, June 2014, p. 34.

[31]      Ms Cally Wilson, Committee Hansard, 24 March 2015, p. 9.

[32]      Ms Cally Wilson, Submission 68, Attachment 1, p. 3.

[33]      Energex, Submission 14.1, p. 18.

[34]      Energex, Submission 14.1, p. 3.

[35]      Energex, Submission 14.1, pp. 18–19.

[36]      Energex, Submission 14.1, p. 19.

[37]      Energex, Submission 14.1, p. 20.

[38]      Energex, Submission 14.1, p. 20.

[39]      Energex, Submission 14.1, p. 13.

[40]      Energex, Submission 14.1, pp. 13–14.

[41]      Energex, Submission 14.1, p. 19.

[42]      Energex, Submission 14.1, p. 15.

[43]      Energex, Submission 14.1, p. 21.

[44]      Energex, Submission 14.1, p. 21.

[45]      Energex, Submission 14.1, p. 22.

[46]      Agriculture Industries Electricity Taskforce, Submission 21, p. 9.

[47]      Veto Energex Towers Organisation (VETO), Submission 55, p. 2.

[48]      Mr Paul Casbolt, President, VETO, Committee Hansard, 16 February 2015, p. 52.

[49]      Ms Laurie Koranski, Spokesperson, VETO, Committee Hansard, 16 February 2015, p. 49.

[50]      VETO, Submission 55, p. 9.

[51]      Australian Energy Regulator (AER), Quarterly compliance report: April – June 2011, p. 25; cited in VETO, Submission 55, p. 33.

[52]      VETO, Submission 55, pp. 6–7.

[53]      Energex, Response to Submission 55, p. 1.

[54]      Energex, Response to Submission 55, p. 2.

[55]      Energex, Response to Submission 55, p. 1.

[56]      Energex, Response to Submission 55, p. 1.

[57]      Economic Regulation Authority (Western Australia), Submission 30, pp. 5–6.

[58]      Economic Regulation Authority (Western Australia), Submission 30, p. 4.

[59]      Energy Networks Association, Submission 31, p. 5.

[60]      AER, Answer to questions on notice 8, received 10 April 2015, pp. 4, 6.

[61]      AER, Answer to questions on notice 8, received 10 April 2015, pp. 4, 6.

[62]      AER, Answer to questions on notice 8, received 10 April 2015, p. 5.

[63]      Between 2009 and 2013, Energex had, on average, the second highest number of customers of distribution businesses in the NEM. AER, Electricity distribution network service providers: Annual benchmarking report, November 2014, www.aer.gov.au/sites/default/files/2014%20‌Annual%20distribution%20benchmarking%20report%20-%20November%202014_0_0.pdf (accessed 21 April 2015), p. 12.

[64]      Regulatory Information Notices (section 280 of the National Electricity Law) and Regulatory Information Orders (section 28C of the National Electricity Law).

[65]      Energex, Submission 14, p. 6.

[66]      Department of Industry, Submission 34, p. 11.

[67]      Energex, Submission 14, p. 6.

[68]      Department of Industry, Submission 34, p. 11.

[69]      National Electricity Rules, rules 6.13 and 6A.15.

[70]      Electrical Trades Union Australia, Submission 22, p. 30.

[71]      See Energex, Submission 14, p. 6; Agriculture Industries Electricity Taskforce, Submission 21, p. 13; EnergyAustralia, Submission 23, p. 7; Department of Industry, Submission 34, p. 11.

[72]      AER, Preliminary decision: Energex determination 2015−16 to 2019−20 – Overview, April 2015, www.aer.gov.au/sites/default/files/AER%20-%20Preliminary%20decision%20‌Energex%20distribution%20determination%20-%20Overview%20-%20April%202015.pdf (accessed 30 April 2015), pp. 30–31.

[73]      AER, Preliminary decision: Energex determination 2015−16 to 2019−20 – Overview, p. 13.

[74]      AER, Preliminary decision: Energex determination 2015−16 to 2019−20 – Overview, p. 8.

[75]      Energex, 'Our five year future plan: Regulatory Proposal Overview 2015–2020', Tabled document 4, p. 32. This figure excludes revenue from Solar Bonus Scheme payments.

[76]      This issue is discussed in chapter 6 of the first interim report.

[77]      See paragraph 4.46 of the first interim report and Energy Networks Australia, Submission 31, p. 6.

[78]      See paragraph 6.7 of the first interim report.

[79]      This issue is discussed in chapter 6 of the first interim report.

[80]      AER, Preliminary decision: Energex determination 2015−16 to 2019−20 – Overview, p. 13.