This follows earlier news that four of the five companies, including UED, affected by the Victorian Essential Services Commission's electricity distribution price review (EDPR) would appeal the decision that forces them to cut tariffs in a five-year cycle starting next January.
Joining UED in the appeal process are Citipower, Powercor and SP AusNet. AGL accepted the regulator's decision.
The commission’s ruling would reduce UED’s real prices by 15.6%, Powercor by 16.4%, SP AusNet by 7.8%, Citipower by 7.7%, and AGL Electricity's by 3.1%.
“The part of the current appeal that is most immediately significant to DUET relates to operating costs,” DUET CEO Peter Barry said.
“UED’s estimate of the operating costs disallowed under the final determination is $12.3 million per annum.”
UED is also appealing against the ESC’s calculation of a service incentive payment. Earlier this month, the company told The Australian newspaper the ruling would reduce its annual revenue by about $30 million, which was more than its annual profit.
Other recent regulatory revisions affecting UED’s assets include decisions regarding its 87.6%-owned Dampier-to-Bunbury Pipeline and its 25.9% owned AlintaGas Networks. In 2008, its 79.9% owned Multinet Gas will also undergo regulatory resets.
A decision by Western Australia's Economic Regulation Authority to drop gas standards in the DBP earlier this month created controversy amongst several project partners.
But Barry told the Open Briefing that the project was expected to deliver “stable and predictable cash flows” over the next three years.
“Potential upside includes our ability to refinance a number of the debt facilities across our assets and the continued expansion of our assets, including DBP with the Stage 4 and 5 expansions,” he said.
Barry said the first stage of the DBP’s $433 million expansion was due for completion by the current summer peak next January, which would add about 28 terajoules per day of additional power.
