EPRG 0930

Bruce Mountain and Stephen Littlechild

Comparing electricity distribution network costs and revenues in New South Wales and Great Britain

EPRG 0930 Non-Technical Summary | PDF

Also published in:

• Mountain, Bruce & Littlechild, Stephen (2010), “Comparing electricity distribution network costs and revenues in New South Wales and Great Britain”, Energy Policy Volume 38, Issue 10, October, Pages 5770–5782

Abstract: This paper compares the costs and allowed revenues of electricity distribution networks in New South Wales (NSW) and Great Britain (GB). In 2000, allowed distribution business revenues per customer in NSW were twice those in GB. Recently set price controls imply that by 2014 they will be four times as high. This reflects operating and capital costs per customer that are projected to grow in NSW but to remain relatively stable in GB. Smaller distribution companies in NSW may have some effect, but physical and industry differences are unlikely to be significant explanatory factors. Differences in the regulatory framework and in the conduct of regulation, and in ownership, are potentially significant. A shorter comparison with costs and revenues in Victoria, where regulation and ownership have been more similar to GB, and where costs and allowed revenues have decreased rather than increased, is consistent with this hypothesis.

Keywords: electricity, markets, pricing, regulation