6.1 Annual Revenue Requirement
The pricing methodology adopted by WGL in its determination of
the fees and charges for Distribution Services is based upon the Annual
Revenue Requirement (ARR). The ARR in any one year is determined from
the sum of the operating costs, UFG, a reasonable return on the value
of WGL’s Distribution System (Return on Asset or ROA) and the depreciation
costs associated with these assets.
6.2 Delivery Point Categories
The Delivery Points have been categorised as follows:
6.2.1 Large Sites
where the Annual Quantity is greater than 10 TJ;
6.2.2 CNG Sites
where the End User is supplied directly from the Delivery Point and compresses
the gas and resells it as CNG for vehicle refuelling purposes; and
6.2.3 Other Sites
which are neither Large Sites nor CNG Sites.
6.3 Revenue Requirement
6.3.1 Large Sites and CNG Sites
The asset value of the system from the Receipt Point to each individual
Large Site and CNG Site is based upon the actual assets used and allocated
proportionally to each site based on the Maximum Hourly Quantity for each
site.
From this the appropriate financial return for the value of the asset
used to supply each Site can be determined and the corresponding depreciation
of that asset. Together with an allocation of the operating costs these
three components make up the Total Revenue Requirement (TRR) for each
Site.
In recognition of the state of the CNG market and that its future is
vulnerable to price, the TRR for CNG Sites has been capped at an appropriate
market level.
6.3.2 Other Sites
The asset value of the system supplying the Other Sites is the residual
value after deducting the asset values for all the Large Sites and CNG
Sites from the value of the entire Distribution System.
The TRR for Other Sites is then determined as the sum of the financial
return on these assets, the depreciation of these assets and the remainder
of the operating costs.
6.4 Service Charge
The Service Charge is a fixed charge for each Delivery Point which is
based upon the portion of the asset unique to each site, that is the service
pipe and metering installation up to the Delivery Point. The charge is
based on the installed meter capacity and incorporates a return on the
asset, depreciation and a share of the cost of operating the Distribution
System, each based upon the asset value.
6.5 Supply Charge
The Supply Charge is a variable charge per Delivery Point which is based
upon the portion of the shared or dedicated asset for each Delivery Point
from the Receipt Point through to the service connection. The charge incorporates
a return on the asset, depreciation and a share of the cost of operating
the Distribution System, all based upon the asset value, which is then
used to determine a variable rate per GJ based upon the forecast throughput
for that Delivery Point. An allowance for (UFG) is then added to the variable
rate.
For Large Sites and CNG Sites the asset value for each is based upon
the actual asset used as outlined in Clause 6.3.1. For Other Sites the
asset value is the residual asset amount as outlined in Clause 6.3.2.
Using this method of price determination where throughput to a Delivery
Point either does not meet forecast or exceeds it, the total Supply Charge
for the year can vary substantially. Due to the variations experienced
for some Large Sites in the year ending 30 September 1998, it is proposed
that the charges for the year commencing 1 October 1999 will be fixed
for each Large Site.
6.6 Miscellaneous Charges
6.6.1 Long Service Connection
Residential This charge is applicable for residential services extending
beyond the first 25 metres from the property boundary.
6.6.2 Disconnection Fee
This fee is applicable when WGL temporarily discontinues supply to a specific
Delivery Point at the System User request. In this instance all other
charges for Distribution Services still apply.
6.6.3 Reconnection Fee
This fee is applicable when WGL reinstates supply to a specific delivery
Point which had been disconnected at the System Users request (see Clause
6.6.2).
6.6.4 Exit Fee
WGL reserves the right to charge a fee where the System User requires
the cessation of Distribution Services to a specific Delivery Point. The
right to apply this fee is intended to discourage System Users from gaming
the system to minimise costs during periods of nil usage at Delivery Points.
Until such time that WGL decides otherwise, an Exit Fee will not be applicable.
6.6.5 Special Meter Reading Fee
This fee is applicable where WGL, at the request of the System User, reads
the meter at a Delivery Point at a time when the meter would not usually
be read.
6.6.6 Meter Test Fee
This fee is applicable where WGL, at the request of the System User, replaces
the meter at the Delivery Point and arranges for the removed meter to
be tested.
6.6.7 Meter or Service Pipe Relocation
This is applicable where WGL, at the request of the System User, relocates
the meter and/or service pipe.
6.6.8 Time of Use Data Charge
This is applicable where a Time of Use Device is required at a Delivery
Point where the Nominated Annual Quantity is less than 10 TJ and a Usage
Profile has not been agreed.
At Delivery Points where the Nominated Annual Quantity exceeds or equals
10 TJ the charge is included in the Service Charge.
6.6.9 Monthly Summary of Daily Data Charge
This is applicable where a monthly summary of daily data is required for
a Delivery Point where the Nominated Annual Quantity is less than 10 TJ
and a Usage Profile has not been agreed. A prerequisite to this charge
is the Time of Use Data Charge specified in Clause 6.6.8 above.
At Delivery Points where the Nominated Annual Quantity exceeds or equals
10 TJ the charge is included in the Service Charge.
6.6.10 Daily Summary of Daily Data Charge
This is applicable where daily data is required on a daily basis. A prerequisite
to this charge is the Time of Use Data Charge specified in Clause 6.6.8
above.
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