5 September 2012

Introduction

United Energy Distribution Pty Limited (United Energy) is pleased to provide the following response to the Consultation Paper in relation to Regulatory Arrangements to Support the Power Line Bushfire Safety Program.

Approximately 10% of United Energy's distribution network is situated within the defined Hazardous Bushfire Risk Area. Geographically, this is approximately half of the total distribution area. The United Energy Hazardous Bushfire Risk Area is situated on the Mornington Peninsula, with three small areas classified within the highest fire loss consequence areas.

In its determination for the 2011-2015 regulatory period, the Australian Energy Regulator approved United Energy's proposal for the installation of REFCLs at seven zone substations supplying the Hazardous Bushfire Risk Area, and replacement of 44km of SWER lines with overhead, 22kV lines. United Energy has commenced planning for this work.

In response to the request for stakeholder response, United Energy makes the following comments:

Regulatory Change

It is United Energy's view that the DNSP is in the best position to understand the most efficacious means of achieving objectives, but in doing so, the needs of the community for energy safety must be considered. This philosophy underpins the Electricity Safety Management Scheme (ESMS), which must be accepted by Energy Safe Victoria, and with which compliance is mandatory, once accepted.

The application and use of the ESMS as a regulatory instrument is a suitable and efficient means of achieving the shared goals of regulators and business owners. The recent use by Energy Safe Victoria of the process where DNSP's are directed to make amendments to the ESMS which are then accepted by Energy Safe Victoria has allowed consultation between the parties about how regulatory objectives may be best achieved in a practical and deliverable way, and to provide certainty of cost recovery through the pass-through procedure.

United Energy supports this approach for implementing regulatory change.

Cost Recovery Mechanism (Table 5.4)

United Energy has cost recovery approval for installation of REFCLs and replacement of SWER lines. Therefore it has no further requirements in this regard.

Currently, United Energy has not identified any areas where undergrounding or use of insulated conductors is required, other than relatively small areas where Aerial Bundled Cable is being installed. It is United Energy's view that, in the expectation of regulatory acceptance of proposals, existing processes deal satisfactorily with this matter.

Bushfire Mitigation Plan (BMP) or ESMS?

The requirement to produce and obtain approval of the BMP (and the Electric Line Clearance Plan) imposes a significant regulatory burden on the DNSP, and results in uncertainty each year during the period between expiry of the old plan and acceptance by ESV of the new plan.

These two plans relate to a bygone era of prescriptive regulation through the Electricity Safety (Network Asset) Regulations which were replaced by the Electricity Safety (Management) Regulations in 2009.

It is noted that the Bushfire Mitigation Plan only has effect from 1 November each year, until 30 June the following year. The ESMS, as the overarching safety system, applies at all times, and incorporates the essence of the Bushfire Mitigation Plan. It is United Energy's opinion that the ESMS is the appropriate instrument for definition of fire prevention activities and programs.

Annual Review of Progress

Currently DNSPs provide progress reports on a range of Environmental, Safety and Legal programs as well as a range of operational KPIs and incident s to Energy Safe Victoria.

It is United Energy's opinion that this should be sufficient for progress monitoring purposes.

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