Measuring NSP Inputs for Economic Benchmarking

1. Measuring NSP Inputs for Economic Benchmarking AER Economic Benchmarking Workshop #6 7 May 2013 Denis Lawrence and John Kain

2. GENERAL ISSUES

3. Main Issue • Data requirements • Are there any variables missing from tables 2 (for DNSPs) and 3 (for TNSPs) in section 3.2 that should be there? • Are the definitions proposed appropriate for economic benchmarking? • Should any of the definitions be altered to ensure consistency across DNSPs and across TNSPs, respectively?

4. Other Issues • Distribution cost coverage • Opex price index • EGWW sector AWOTE or WPI – 62.0 per cent • Intermediate inputs – domestic PPI – 19.5 per cent • Data processing, web hosting and electronic information storage PPI – 8.2 per cent • Other administrative services – 6.3 per cent • Legal and accounting PPI – 3.0 per cent, and • Market research and statistical services PPI – 1.0 per cent

5. AWOTE vs WPI

6. Other Issues (cont’d) • Easements • Distribution network complexity • System capacity and capital input quantities • WACC for use in economic benchmarking

7. OPEX INPUTS

8. Opex Specification #1

9. Opex Specification #2

10. CAPITAL INPUTS

11. Capital Specification #1

12. Capital Specification #2

13. Capital Specification #3