Recent trends in revenue and demand
OtagoNet’s revenue from distribution line charges has increased over recent years. Revenue from line charges, which made up most of OtagoNet’s revenue, increased by around 17% from 2008 to 2011, over and above inflation. Distribution line charge revenue from residential and smaller commercial customers increased by 13%, and from medium-sized customers by 35%. Most of OtagoNet’s revenue is from residential and smaller commercial customers.
The increase in revenue is due to a combination of price and demand increases.
The average price change varied across customer groups:
- The average price per small customer connection increased 13%. The average price per unit of electricity delivered to small customers increased 20%.
- The average price per medium-sized customer connection increased 25%. The average price per unit of electricity delivered to medium-sized customers was about the same in 2011 as in 2008.
Demand growth on OtagoNet’s network was mixed. The number of small-sized connections was static. The number of medium- and large-sized connections increased 8%. Small customers decreased electricity consumption 6%, while medium-sized customers increased their electricity consumption 30%. The largest five customers made up over half of total electricity consumption which grew 10%.
Recent trends in expenditure
Total operating expenditure grew 3% per year over and above inflation. The majority of operating expenditure was directly related to the network.
Investment in the network increased faster than the scale of OtagoNet’s business in recent years. This may reflect the beginning of a large project.
Forecast network operating expenditure is flat but differs significantly in each forecast round. Forecast capital expenditure differs in trend and in values for each forecast round. This may reflect changes in actual business need, the uncertainty of scheduling projects in future periods, and the opportunity to update forecasts in the Asset Management Plan annually
Recent trends in service reliability
The average duration and frequency of interruptions were above the industry average. The average duration and frequency of interruptions were above OtagoNet’s regulatory limits in 2008, 2009, and 2010.
Full analysis
The full analysis of OtagoNet'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.
