3. Indication of Line Companies' Current Policies
38. Approximately half of the lines companies mention continuance of supply after 2013 in their Asset Management Plans.3 Several lines companies comment that this issue is under consideration and policy has not yet been developed. Where lines companies do have a policy for 2013, around two thirds have indicated that they are likely to continue current arrangements to supply existing consumers after 2013. These policies include:
- Developing a strategy for managing uneconomic lines by conversion to single phase 11kV lines as the most viable and sustainable solution for ongoing supply by lines.
- Intending to contribute to supply of customers on marginal lines post 2013, although it is unclear whether this will be through lines or alternative methods.
- Noting that there is a business opportunity for distributed generation but yet to investigate this.
- Suggesting that discontinuing line supply would most likely be considered in an economic valuation at the time of asset renewal or when significant vegetation control is needed.
39. Some observations made by lines companies on the issue were:
- Consumers are only satisfied by secure supply and electricity cannot be partially maintained, so the infrastructure must always be in working order;
- As the 31 March 2013 date is arbitrary there will be many lines that will remain in service after that date so impacts on consumers will be felt when lines need replacing rather than as the date passes;
- Consumers will never opt for alternative systems because they are never faced with the true costs of supply as government policy requires that increases in rural line charges cannot be greater than increases in urban line charges i.e. there is an explicit cross-subsidy;
- To make a remote rural line economic the line charge paid would have to increase substantially – by more than double;
- On a per connection basis, the level of subsidy from urban to rural consumers is not significant;
- Ongoing supply by lines to remote rural areas requires consideration of asset renewal and management of vegetation costs;
- A consumer will always prefer supply by lines because they have no responsibility for the ongoing maintenance.
Back to Top