Customer Capital Contributions Policy

Transcription

1 TasNetworks Customer Capital Contributions Policy Effective 1 July 2014 Tasmanian Networks Pty Ltd ABN Page 1 of 25

2 Tasmanian Networks Pty Ltd ABN Maria Street Lenah Valley TAS Enquiries regarding this Policy should be addressed to: Regulation Leader Tasmanian Networks Pty Ltd PO Box 606 Moonah TAS 7009 Copyright (c) Tasmanian Networks Pty Ltd Tasmanian Networks Pty Ltd ABN Page 2 of 25

3 1 Introduction This document sets out the principles and policy to be applied by TasNetworks when calculating a customer capital contribution for works associated with: establishing a new connection to TasNetworks distribution network; modifying an existing connection to TasNetworks distribution network; or augmenting TasNetworks distribution network to support a new or modified connection. The intention of this policy is to equitably share between stakeholders the financial risk associated with new electrical infrastructure. This Policy was originally introduced on 1 July 2012 by Aurora Energy Pty Ltd as the licensed electricity distribution business in Tasmania and applies until 30 June TasNetworks formally took over the electricity distribution network on 1 July TasNetworks has inherited this Policy unchanged, apart from branding and replacing references to Aurora with TasNetworks throughout the document. 2 Purpose Customer capital contributions are payments in cash made by persons intending to connect to TasNetworks distribution network to: enable those persons to access network services under the standard suite of network tariffs; ensure that costs for that particular connection are borne by the party requesting the connection, and not the entire customer base; and reduce the likelihood of making uneconomic (inefficient) connections. 3 Scope This policy applies to all: new load connections and embedded generator connections to the distribution network; and all modifications to existing load connections and embedded generator connections made to the distribution network from 1 July For completeness, developers constructing residential and non-residential subdivisions are also covered in this policy despite offering no load due to the potential impact the newly constructed assets have on the network. Tasmanian Networks Pty Ltd ABN Page 3 of 25

4 4 Definitions Unless the contrary intention appears the following definitions will apply throughout this policy. Connect, Connection, Connected To form a physical link to or through the distribution network such as to allow the supply of electricity between electrical systems. Connection Assets Those components of the distribution network that are used to provide connection services for a single customer. Connection Services Services associated with creating a new connection to the distribution network or modifying an existing connection to the distribution network in response to a request by a customer. Customer A person, including a developer, who requires connection services. Customer Capital Contribution(s) Financial contributions by a customer or developer towards the costs associated with the creation of a new connection or modifying an existing connection to TasNetworks distribution network or augmenting the distribution network to support a new or modified connection. Developer A person or entity who constructs subdivisions to allow the future provision of Connection Services to Prospective Customers. Direct Costs Those costs attributable to the connection services associated with the creation of a new connection or modifying an existing connection to TasNetworks distribution network, but only to the extent that those costs refer to optimally-sized infrastructure to effect the connection. Distribution Network The distribution network as defined in section 3A of the ESI Act and owned and operated by TasNetworks under the terms of its licence issued by the Regulator under section 17 of the ESI Act. ESI Act The Electricity Supply Industry Act Tasmanian Networks Pty Ltd ABN Page 4 of 25

5 Financial Cash or similar. Generator A person who engages in the activity of owning, controlling, or operating a generating system that supplies electricity to, or who otherwise supplies electricity to, a distribution network and who holds or is deemed to hold a licence or has been exempted from the requirement to obtain a licence under a regulation of the ESI Act. High Voltage (HV) High voltage is as defined in the ESI Act. Installation Means the same as electrical installation in AS/NZS 3000:2007 Wiring Rules, published by Standards Australia, as amended from time to time. Irrigator A customer is an irrigator in respect of an installation when all, or a significant part, of the anticipated electricity usage at that installation is for one or more irrigation pumps. Large Customer A customer is a large customer in respect of an installation if that installation is: not a residential installation; and takes supply at either high voltage or low voltage, with a three phase connection at greater than 100 Amps per phase. Large Generator A generator is a large generator if it is not a micro generator. Large Irrigator An irrigator is a large irrigator in respect of an installation if that installation: takes supply at either high voltage or low voltage, with a three phase connection at greater than 100 Amps per phase. Load Connection A connection other than for an embedded generator. Tasmanian Networks Pty Ltd ABN Page 5 of 25

6 Low-Consumption Installation (LCI) An installation for which the anticipated normal consumption is equal to or below 3,000kWh per annum, excluding (Residential Connections or Irrigation Installations) which have their own treatment. Low Voltage (LV) Low voltage is as defined in the ESI Act. Micro Generator A generator of the type contemplated by Australian Standard AS 4777 Grid Connection of Energy Systems via Inverters. National Energy Customer Framework (NECF) The enacting legislation passed by the South Australian Parliament that will be applied in Tasmania from 1 July 2012 and comprises the: National Energy Retail Law; National Energy Retail Regulations; National Energy Retail Rules; National Electricity Rules; and National Energy Retail Law (TAS) Act Network Augmentation or Alteration Works to enlarge or increase the capacity of the distribution network to distribute electricity. Network Extension Works to construct new distribution network assets beyond the existing boundaries of the distribution network. Non-residential Installation Not a residential installation. Prospective Customer A customer that is reasonably expected to connect an installation to the distribution network. Prudential Requirement An arrangement to minimise the financial risks associated with a request for connection works. Residential Installation An installation that is primarily used for residential purposes. Tasmanian Networks Pty Ltd ABN Page 6 of 25

7 Shared Distribution Network That part of TasNetworks distribution network that is used to supply more than one customer. Small Customer A customer is a small customer in respect of an installation if that installation is: a residential installation; or a non-residential installation that takes, or will take, supply at low voltage with a connection smaller than a three phase connection at less than or equal to 100 Amps per phase. Small Irrigator An irrigator is a small irrigator in respect of an installation if that installation takes supply at low voltage with a connection smaller than a three phase connection at less than or equal to 100 Amps per phase. Tasmanian Electricity Code Has the same meaning as Code in the ESI Act, and is issued by the Tasmanian Economic Regulator. TasNetworks Tasmanian Networks Pty Ltd ABN , in its capacity as the holder of a distribution licence issued under the ESI Act in the State of Tasmania. Temporary Installation An installation that is intended to exist for a period of less than 12 months. Tasmanian Networks Pty Ltd ABN Page 7 of 25

8 5 Policy and Principles 5.1 Principles The intention of this policy is to equitably share between stakeholders the financial risk associated with new electrical infrastructure. The application of this policy should be equitable, transparent and consistent in its application. Charges for connection services should be reasonable and provide, without undue administrative cost, a user pays signal taking into account the efficient costs of providing the connection services arising from the new or modified connection and augmenting the distribution network. The connection of a new customer or modification of an existing connection to the distribution network to meet the changed requirement of a customer should not impose undue costs upon other customers of the shared distribution network. This should limit cross-subsidisation of connection costs between different classes (or subclasses) of customer. Subdivisions are to be treated as construction projects because the developer offers no load. As a result, the cost for all infrastructure should be borne by the developer making the request. A customer capital contribution should allow all customers to access the shared distribution network using a standard network tariff by paying the difference between the costs of providing the connection and the revenue expected to be recovered from that connection. Levying customer capital contributions is supported by the regulatory framework that applies to TasNetworks under part K of chapter 6 of the National Electricity Rules, and in the draft legislation and rules supporting the National Energy Customer Framework. 5.2 Policy Statement TasNetworks will require a customer requesting a new or modified connection to the distribution network to make a contribution (a customer capital contribution) towards that connection. The value of the customer capital contribution should be calculated based on the optimally sized assets (least cost and technically acceptable assets) required by the new or modified connection. Customers requiring connection assets that are above-standard as detailed in TasNetworks Connections Policy should pay for the cost of the assets that is incremental to the cost of standard connection assets. Tasmanian Networks Pty Ltd ABN Page 8 of 25

9 The calculated value of the customer capital contribution should take into account any Government policy concerning the application of customer capital contributions to certain classes of customers. All financial components of a customer capital contribution should be paid as a single up-front amount prior to any works commencing with the exception of basic connection services refer section 6. For basic connection service customers, an invoice will be raised on completion of assessing the application as per section 7. A prudential requirement may be required in conjunction with a customer capital contribution. A customer that has made a customer capital contribution towards the cost of a connection may be eligible for a refund of a portion of that customer capital contribution should another customer subsequently connect to the TasNetworks-owned distribution assets provided solely in respect of the original connection. Time periods apply refer to TasNetworks Reimbursement Scheme (Development Main) Policy for further information. Tasmanian Networks Pty Ltd ABN Page 9 of 25

10 6 Basis for Charging 6.1 New Connections Basic Connection Service All customers except for customers making an irrigation connection refer section 6.2, will make a customer capital contribution for the provision of Basic Connection Services. The Basic Connection Service charge will vary depending on whether the customer requests an overhead or underground service and the number of fuses (or phases of supply) required. For detail on the list prices for these services please consult the schedule available on TasNetworks website at Until such time as alternative arrangements are in place all new connections that are basic connection services as confirmed by TasNetworks and as defined in TasNetworks Customer Connections Policy will be charged the required customer capital contribution after the assessment and connection of that customer. Please refer to Attachment 1 for an example Small Customer Connections All small customers will make a customer capital contribution for the provision of connection assets plus the cost of any network extensions. (excludes transformer costs unless where requested above standard or where required for a low consumption installation). (Development Main Policy also applies see fact sheet on TasNetworks website for more information). No contribution toward upstream network augmentation costs will be charged. Please refer to Attachment 1 for an example Large Customer Connections All large customers will make a customer capital contribution for all connection works including network extensions and dedicated connection assets (including the cost of any dedicated transformer) and network augmentation costs if applicable. (Development Main Policy also applies). All large customers contribute a pro-rata amount towards any upstream network augmentation costs, which may be discounted based on an assessment of the customer s distribution use of system charges (DUoS). For high voltage installations the customer owns the private High Voltage installation and is responsible for all costs incurred with operation and maintenance associated with their own private assets. Please refer to Attachment 1 for an example. Tasmanian Networks Pty Ltd ABN Page 10 of 25

11 6.1.4 New Connections in Rural Areas Small Customers Due to the connection variations in rural networks (some high voltage, some low voltage), TasNetworks will choose the most appropriate connection type and charge a small customer the comparative urban standard connection charge. Large Customers Large customers in rural areas are treated in accordance with section Large Customer Connections above. Please refer to Attachment 1 for an example Residential and Non Residential Connections Above Standard Assets Requested Where a customer requests a standard of service that is higher than the Basic Connection Service, the customer is required to pay all additional costs in the form of a customer capital contribution. If TasNetworks chooses to undertake works in excess of the minimum practical works to provide the requested connection services, the customer will not be required to provide a customer capital contribution toward any additional TasNetworks-initiated costs. Some examples of customer requested alternative or additional connection works include: a dedicated emergency low voltage network supply additional to the normal low voltage supply an alternative high voltage supply from a different zone substation an additional transformer or high voltage feeder or feeders in separate trenches additional substations or substation capacity above that required to meet the customer s reasonable electrical requirements (as assessed by TasNetworks) where site constraints require the use of non-standard equipment where a developer requires a 1000 kva transformer to test equipment once a month but a 750 kva transformer would be adequate to supply a normal load to the development. Tasmanian Networks Pty Ltd ABN Page 11 of 25

12 6.2 Irrigation Connections Irrigators are treated in a similar manner to all other customers requiring load connections but, in line with State Government policy, receive a range of allowances to be netted off their customer capital contribution for new connections. A small irrigator is to pay the direct costs associated with the provision of connection assets with the following allowances to be netted-off the total cost: a Connection Assets Allowance; a Network Extension Allowance; and a Transformer Allowance. A small irrigator requesting a modification to an existing connection is to pay the direct costs associated with any modification of connection assets required to accommodate that request. A large irrigator requesting a new connection is to pay the direct costs associated with the provision of connection assets and the direct costs associated with any augmentation of the shared distribution network required to accommodate that request, the following allowances are to be netted-off the total cost: a Connection Assets Allowance; a Network Extension Allowance; and a Transformer Allowance. A large irrigator requesting a modification to an existing connection is to pay the direct costs associated with any modification of connection assets required to accommodate that request and the direct costs associated with any network augmentation required to accommodate that request. The allowances for new irrigator connections for small and large are not applicable to modifications to existing irrigator connections except for the Transformer Allowance. Please refer to Attachment 1 for an example. Tasmanian Networks Pty Ltd ABN Page 12 of 25

13 6.3 Generator Connections Micro Embedded Generators (as contemplated by AS 4777, currently up to 30kW three phase, 10kW single phase) The customer capital contribution payable by micro generators is based on the same principles as a small customer connection. Where an embedded generator does not have an existing or new electrical supply and meter (ie it has a stand-alone generator), the generator is required to pay for the full cost for any connection assets required, including any dedicated transformers. No contribution toward upstream network augmentation will be charged. Generators are not charged DUoS for energy exported into the distribution network under section of the National Electricity Rules. Please refer to Attachment 1 for an example Large Generators (> Micro Generators) The customer capital contribution payable by large generators is based on the same principles as a large customer connection. Embedded generators with existing or new electricity supplies are not charged for the upgraded metering required to support exported energy requirements. Where an embedded generator does not have an existing electrical supply and meter (ie the generator is a stand-alone generator) the generator is required to pay for the full cost for any connection assets required (service wire, fuses, transformers). In addition, large generators are required to contribute towards the direct costs associated with any augmentation/alteration of the shared distribution network required to accommodate that request. Generators are not charged DUoS for energy exported into the distribution network under section of the National Electricity Rules. Please refer to Attachment 1 for an example. Tasmanian Networks Pty Ltd ABN Page 13 of 25

14 6.4 Subdivisions Under this Policy all subdivisions must contain two or more lots. Single lots will not be treated as a subdivision for the purposes of this policy. A developer requesting a new connection is to pay the direct costs associated with the subdivision for: the provision of connection assets; any network extension of the distribution network required to service the subdivision; and any network augmentation of the shared distribution network, required to accommodate that request. The developer pays for the full cost of backbone high voltage and low voltage infrastructure in both residential and commercial subdivisions (this includes installation of cabinets and turrets in underground subdivisions). For both residential and commercial subdivisions this includes the extension of high voltage cable or overhead line and associated construction works into the subdivision. The developer is responsible for any required contribution to upstream network augmentation of the shared network. The developer s contribution to upstream network augmentation of the shared network is calculated in accordance with section 6.5. Network augmentation costs required by TasNetworks for future developments external to a subdivision are to be met by TasNetworks. Tasmanian Networks Pty Ltd ABN Page 14 of 25

15 6.5 TasNetworks Treatment of Issues associated with Customer Connections Alteration or Augmentation of the Shared Network Large customers, developers (residential subdivisions) and embedded generators other than micro generators are required to contribute to upstream network augmentation costs. The amount payable will take into account any discounted tariff revenue offset applicable. For large customers a customer capital contribution to upstream network augmentation costs is required where the incremental costs associated with the connection of the large customer are greater than the future incremental tariff revenues received as calculated by TasNetworks. Developers and embedded generators that are required to contribute to network augmentation costs of the shared distribution network are not eligible for a discounted tariff revenue offset as they contribute no tariff revenues. Modification of Existing Connections Customers requesting a modified connection are responsible for the full cost of modified connection assets and will be charged a customer capital contribution equal to the full cost of the modification works. TasNetworks is responsible for the cost of alterations to the shared distribution network to accommodate the modified connection except in the instance of a large customer requesting modification of an existing connection. Temporary Installations The customer capital contribution associated with a temporary installation is to include costs associated with: the installation of the connection assets required to connect the temporary installation; the removal of the connection assets associated with the temporary installation; and the return (in good order) of any reusable equipment (to a nominated TasNetworks depot or location). A security fee or deposit may be charged for the security of temporary equipment in accordance with TasNetworks Distribution Credit Policy. Development Mains A customer that has made a customer capital contribution towards its connection assets may be eligible for a refund of a portion of that customer capital contribution should another customer subsequently connect to those connection assets. Tasmanian Networks Pty Ltd ABN Page 15 of 25

16 Refer to TasNetworks Reimbursement Scheme (Development Mains) Policy for more information, which is available at Asset Replacement The full cost of the replacement of unserviceable assets that have been subject to a customer capital contribution will be borne by TasNetworks at the time of replacement. The replacement or removal of a customer s connection assets that are in serviceable condition at the request of that customer should be considered as a request to modify that customer s existing connection. Group Applications for connection Nothing in this policy prevents customers sharing the costs of connection works common to each prospective customer s development. Public Lighting The provision of public lighting in subdivisions is the responsibility of the developer. In the event that the developer requests that TasNetworks construct the public lighting, the associated costs will be included in the customer capital contribution but itemised separately. Private Lighting Customers can request the installation of private lighting near their premises (in accordance with any council requirements) at full cost to those customers. Tasmanian Networks Pty Ltd ABN Page 16 of 25

17 7 TasNetworks Distribution Credit Policy Prior to any works commencing, all financial components of a customer capital contribution should be paid as a single up-front amount, or an irrevocable bank guarantee to the value of all financial components of the customer capital contributions should be obtained. Where construction activities are significantly different to the original TasNetworks proposal and the costs associated with the additional works are expected to exceed the lesser of: 10 per cent of the original TasNetworks proposal, or $5,000 all works may be halted and the applicable customer capital contributions is to be re-calculated. Until such time as alternative arrangements are in place all new connections that are basic connection services as confirmed by TasNetworks and as defined in TasNetworks Customer Connections Policy will be charged the required customer capital contribution after the assessment and connection of that customer. Tasmanian Networks Pty Ltd ABN Page 17 of 25

18 8 Dispute Resolution Disputes between TasNetworks and a customer regarding TasNetworks customer capital contributions will be dealt with in accordance with TasNetworks policies relating to dispute resolution. 9 Disclaimer While TasNetworks will periodically review this policy to account for the impact of any future changes to legislation or regulation, TasNetworks does not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of this policy, or the information contained in it. It is the customer s responsibility to ensure that the arrangements applicable to a specific investment are confirmed with TasNetworks at the time that an application to connect is made. 10 Point of Contact For more information visit or call Tasmanian Networks Pty Ltd ABN Page 18 of 25

19 Attachment 1: New Connection Examples 1 Basic Connection Service The diagram in figure 1 below illustrates a house requiring a Basic Connection Service overhead. The customer in this example requires the installation of a service wire and fuses and would therefore be charged a Basic Connection Service for an overhead connection and for the number of fuses required. If the distribution mains exist but did not have sufficient capacity to cater for the new connection, provided the customer is a small customer they would not be required to contribute to any alteration of the shared network to allow the new connection. Figure 1: Example of a Basic Connection Service Overhead. Tasmanian Networks Pty Ltd ABN Page 19 of 25

20 2 Small Customer Connections In the example provided below, a new small customer premise with small load requirements (less than or equal to 100 amp three phase low voltage supply) requires extension works and a dedicated transformer as part of the connection works in order to supply the new load. This customer s connection works would include service wire, fuses and extensions required to connect to the network, excluding the cost of the transformer. Figure 2: Example of a small customer requiring extension works to connect to the network. Tasmanian Networks Pty Ltd ABN Page 20 of 25

21 3 Large Customer Connections The example below requires similar connection works to the example above however involves a large customer that places greater demands on the existing network. In the example provided below, a new large customer premise with high load requirements requires extension works a dedicated transformer and network augmentation as part of the connection works in order to supply the new load. This customer s connection works would include service wire, fuses and extensions required to connect to the network, plus the full cost of the dedicated transformer, plus a contribution to network augmentation costs (prorata). Network augmentation may be required where the development s new load is greater than 50% of the nameplate rating of the existing high voltage cables or overhead line, in which case TasNetworks may require the large customer to fund all or a part of the cost of the new high voltage cables or overhead line as an upfront contribution. Any future customer connecting, that benefit from this customer s connection works within seven years would be required to reimburse this customer as advised by TasNetworks. Note Charge for cost of Transformer is on a pro-rata basis. Figure 3: Example of a Large Customer Connection Tasmanian Networks Pty Ltd ABN Page 21 of 25

22 4 New Connections in Rural Areas In the example provided below, TasNetworks had an existing high voltage network running near the property of a small customer requesting a Basic Connection Service. TasNetworks in this case will assess the cost-benefit of running a high voltage or low voltage network to the property and charge the customer the appropriate standard connection service charge. In this example, TasNetworks has considered that it is more efficient to run a high voltage network and install a transformer rather than run low voltage and require the small customer to pay for a Basic Connection Service (ie the cost of a service wire and fuses). Figure 4: A small customer connection service in a rural area. Tasmanian Networks Pty Ltd ABN Page 22 of 25

23 5 Irrigation Connections The diagram below illustrates an example of the required connection works for irrigation connections. Figure 5: Example of an irrigation connection. Tasmanian Networks Pty Ltd ABN Page 23 of 25

24 6 Micro Embedded Generators (As contemplated by AS 4777 currently up to 30kW three phase, 10kW single phase) The diagrams below illustrate two different scenarios where the required connection works differ. Figure 6: example of a new standalone Micro Generator Figure 7: example of an existing customer connecting a Micro Generator. Tasmanian Networks Pty Ltd ABN Page 24 of 25

25 7 Large Generators (>Micro Generators) The diagrams below illustrate two different scenarios where the required connection works differ. Figure 8: example of a new stand alone generator (Larger than a Micro Generator) Figure 9: example of an existing customer connecting a generator (Larger than a Micro Generator) Tasmanian Networks Pty Ltd ABN Page 25 of 25