Recent trends in revenue
Electricity Invercargill’s revenue from distribution line charges has increased over recent years. Revenue from line charges, which made up most of Electricity Invercargill’s revenue, increased by around 9% from 2008 to 2011, over and above inflation. Distribution line charge revenue from residential and smaller commercial customers increased by 10%, and from medium-sized customers by 18%. Line charge revenue from large customers fell by 7%. Most of Electricity Invercargill’s revenue is from residential and smaller commercial customers.
The increase in revenue is due to a combination of prices rising and an increase in demand.
The average price increase varied across customer groups:
- The average price per small customer connection increased 9%. The average price paid per unit of electricity delivered to small customers increased 3%.
- The average price per medium-sized customer connection increased 12%.The average price paid per unit of electricity delivered to medium-sized customers fell 5%.
- The average price per large-sized customer connection fell 10%. The average price paid per unit of electricity delivered to large-sized customers increased 15%.
Demand growth on Electricity Invercargill’s network was mixed. Customer connections grew modestly. Small customers increased electricity consumption 7%, while medium-sized customers increased their electricity consumption 25%. Large-sized customers decreased their electricity consumption by 20%.
Recent trends in expenditure
Total operating expenditure grew 10% per year over and above inflation. Most operating expenditure was not directly related to the network.
Capital expenditure was flat from 2008 to 2010. Capital expenditure increased in 2011 and may reflect the beginning of a large project.
Forecast network operating expenditure is flat for the coming years. The forecasts tend to overestimate actual expenditure.
Forecast network capital expenditures peak and then tail off. The 2011 forecast predicts a peak in capital expenditure in 2013. The forecasts tend to overestimate actual expenditure. This may reflect changes in actual business need, the uncertainty of scheduling projects in future periods, and the opportunity to update forecasts in its Asset Management Plan annually.
Recent trends in service reliability
The average duration of interruptions breached the price-quality threshold in 2008. The average frequency of interruptions breached the price-quality threshold in 2008 and 2011. Both measures of network reliability were below the industry average.
Full analysis
The full analysis of Electricity Invercargill's performance from 2008 to 2011 can be downloaded below.
All dollar figures in our analysis are adjusted for inflation and expressed in 2011 dollars.
