Media Release: A stronger power network and lower cost for Melbournians

3 February, 2020

Modernising and reinforcing Melbourne’s power supply and enabling some of the state’s largest infrastructure projects while reducing prices for households by 10 per cent is part of a new plan unveiled by electricity distributor CitiPower.

CitiPower has today submitted its Regulatory Proposal to the Australian Energy Regulator (AER) for the 2021-2026 period. As a regulated business, CitiPower’s proposed investments, pricing plans and rate of return are approved by the AER every five years and this determines the revenue able to be recovered from customers.

CitiPower Chief Executive Officer Tim Rourke said the proposal responded directly to customer needs, expectations and priorities.

“Our plan is to deliver more to customers at a lower cost,” Mr Rourke said.

“CitiPower is Australia’s most efficient electricity distribution network and is continually improving.

“We are proposing high levels of investment so we can continue to operate the network safely and reliably. Efficiencies in our operations mean we can offer this increased investment while reducing costs to customers.”

Central to the plan is a substantial program to retire, replace and upgrade network assets, raise environmental protection standards, introduce new technologies and accommodate customer choices such as rooftop solar.

Distribution and metering revenue is forecast to decline by 5 per cent to $1,599 million over the period compared to $1,681 million in the current regulatory period.

CitiPower proposes $852 million in capital expenditure (net) over the period which is in line with the amount approved for the current regulatory period.

Operating expenditure is proposed at $569 million for the five years compared to $472 million in the current regulatory period, an increase of 20 per cent.

At the same time, distribution and metering charges will fall by an average of $38 for residents to $326 per annum and $119 per annum for small business customers.

Based on a typical household in Victoria, CitiPower’s distribution charge (excluding metering) will represent $274 (29 per cent) of the average annual bill of $957 in 2021/2022.

Other major features of the proposal include:

  • $32 million to enable approximately 95 per cent of customers to connect a 5kVA solar PV system with export capability as the amount of installed solar increases;
  • Upgrading zone substations in the Port Melbourne and Brunswick supply areas as new residential developments in these areas increase demand for electricity;
  • Continuing works on the $250 million Melbourne CBD Security of Supply project which ensures we can maintain power to the city within 30 minutes switching time;
  • Increasing the number of poles, service lines and pole-top assets replaced annually;
  • Investing $135 million in net connections over the 2021-2026 period to support an estimated 17,700 new households and major infrastructure developments including rail and tunnel projects, road upgrades and tram track renewals; and
  • Investing $96 million in information and communications technology integral to all modern electricity distribution networks and offering high quality integrated services for customers.

More than 11,000 customers across the CitiPower and two other networks contributed to developing the proposal as part of a comprehensive stakeholder engagement program over three years.

CitiPower is Australia’s most reliable network with power available for over 99.99 per cent of the year. On average, customers experience less than 20 minutes off supply per annum.

AER benchmarking ranks CitiPower as the most efficient in the National Electricity Market based on operating expenditure per customer.

Customers and stakeholders are invited to review CitiPower’s Regulatory Proposal at and to provide feedback to the AER as part of its assessment process.