Almost 6000 new consumers were connected during the quarter as part of the company’s $90 million capital expenditure program for 2005/06, chairman John Allpass said at the company's AGM.
“As part of our capital expenditure program, we expect to construct about 380 kilometres of new gas mains and replace some 150 kilometres of cast iron pipe,” Allpass said.
“In Victoria we recently extended our network to Bairnsdale in the south-east, and are currently constructing a spur-line to nearby Paynesville. We are also extending our network to five small towns in the Mornington Peninsula region and Hurstbridge north of Melbourne.”
Total gas delivery volumes during the period were down 3% on the previous year to 34,600 terajoules, due mainly to warm weather in Victoria and South Australia, according to Allpass.
“Gas volumes in the first quarter have again been impacted by warm winter weather in the south-eastern states,” he said.
“This follows a trend over the past five years, where in four of those years, temperatures have been above the 10-year average.”
He said the issue has been raised with ESCoSA, and is expected to be addressed in the new gas distribution tariffs, which will be determined in a review of the company’s access arrangement for South Australia.
But he said revenue was steady as a result of increased tariffs and an additional 20,300 consumers connected to the network over the 2004/05 financial year.
“Any improvement in the volume of gas delivered to consumers over the remainder of the year will largely depend on weather conditions next autumn,” Allpass said.
Allpass said he was also concerned about the delay in addressing the proposed changes to the gas industry regulatory regime, as recommended by the Productivity Commission in its report released in August last year.
The Ministerial Council on Energy is expected to issue its response to these recommendations in February 2006, he said.
“In the meantime, the energy infrastructure industry in its present form continues to be hampered by a process that is cumbersome, extremely costly and discouraging investments in essential community facilities,” Allpass said.
“It should be a priority to have in place a regulatory regime that is light-handed, and encourages infrastructure companies to make environmentally friendly natural gas available as widely as possible, particularly in light of the debate concerning the need to reduce greenhouse gas emissions.”
The company also confirmed that the shareholder distribution for the six months ended September 30 would be 5.7 cents and paid at the end of November.
