The AEMC has called for public submissions on the draft report published under the Review of electricity distribution reliability outcomes and standards.

This draft report is the first time that trade offs between cost and reliability have been looked at publicly in Australia and the first time NSW customers have been surveyed about the value they place on a reliable supply of electricity.

It looked at changes in investment and reliability performance across four scenarios compared to continuing current requirements for distribution reliability.

The draft report says that cost savings of up to $2.5 billion over 15 years are possible if the level of distribution reliability is reduced in NSW – with limited impact on outages for customers. 

Significant investment to meet the current requirements for distribution reliability in NSW has already been committed, since they were established in 2005. Savings on residential electricity bills are likely to be modest, as further investment to meet distribution reliability requirements will only have a limited impact on retail electricity prices.

The review responds to NSW Government concerns that the State’s reliability standards have been driving increased investment in electricity distribution networks and contributing to higher retail prices.  The NSW Government will use our advice to decide if any changes should be made to future levels of distribution reliability in NSW.

The review has analysed data from two sources:

  • a survey of 1,288 electricity customers in NSW;
  • independently reviewed capital expenditure and reliability modelling provided by NSW distribution companies which quantified a range of possible investment savings attached to meeting alternative standards of reliability.

A final report will be published in late August 2012.