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Security of Supply Project Levy Approved by ESC

25 July 2008

CitiPower is investing $52 million to upgrade substations, sub-transmission lines and feeder cables that service the Melbourne CBD as part of the CBD Security of Supply Upgrade project.

The upgrade will protect Melbourne's electricity supply from a longstanding blackout should there be major failures (i.e. the loss of two or more major connections) within the electricity networks supplying this area.

The Essential Services Commission has made a change to the Distribution Code, requiring CitiPower to proceed with the upgrade works and allowing for a small levy increase to be passed on to affected CBD customers for the capital works associated with the project.

Affected customers will see a small price increase of around 0.13% on their electricity bill from 1 August 08, which will appear as a supplemental levy on the bill to the retailer. The small proportional contribution borne by CBD customers for the upgrade works is far less than the costs which would be associated with a widespread longstanding outage in this area. This may be considered an insurance policy against the losses incurred through such an event.