Recent trends in revenue and demand
Powerco’s revenue from distribution line charges has increased modestly over recent years. Revenue from line charges, which made up most of Powerco’s revenue, increased by around 2% from 2008 to 2011, over and above inflation. Distribution line charge revenue from residential and smaller commercial customers increased by 1%, and from larger customers by 10%. Most of Powerco’s revenue is from residential and commercial customers.
The increase in revenue is due to a combination of demand and price increases.
The average price increase varied across customer groups:
- The average price paid per smaller customer connection fell around 3%. The average price per unit of electricity delivered to smaller customers increased around 4%.
- The average price paid per larger customer connection increased around 15%. The average price paid per unit of electricity delivered to larger customers increased around 20%.
Demand growth on Powerco’s network was mixed. The number of smaller customer connections grew around 5% and larger customer connections declined 4%. Smaller and larger sized customers decreased electricity consumption 3% and 7% respectively. The largest five customers increased electricity consumption by 14%.
Recent trends in expenditure
Powerco’s total operating expenditure declined by 3% per year after controlling for inflation. Less than half of total operating expenditure was directly related to the network.
Capital expenditure peaked in 2009 and 2010 and may reflect the beginning of a few large projects. In 2011 the largest category of capital expenditure was asset replacement and renewal.
Powerco forecasts increased levels of network operating expenditure for the coming years. Powerco forecasts network capital expenditure to increase significantly in the coming years.
Recent trends in service reliability
Powerco’s average duration of interruptions was above its regulatory limit every year. The average frequency of interruptions was below its regulatory limit. The average duration and frequency of interruptions were both above the industry average.
Full analysis
The full analysis of Powerco'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.
