Consultation on Methodology
Consultation on Methodology
Since this was the first review of its type, the process commenced with a debate on the review's methodology. United Energy Distribution participated actively in this. The key documents relating to the review methodology are contained in this section.
United Energy Distribution's case was structured around the belief that ultimately, the review was about a decision between price or quality. United Energy Distribution stated that, in the short and the long term, quality will be in the best interests of both Victorian businesses and residential customers.
The culmination of this methodology review process was United Energy Distribution's submission to the Office of the Regulator-General in December 1999. As part this submission, we presented three quite separate scenarios. (United Energy Distribution was the only energy company to present multiple scenarios in this way). The purpose of these three scenarios was to enable customers to choose the service levels they receive.
It was, and continues to be our strongly stated position that Victoria will benefit most from a regime that provides incentive regulation. Under incentive regulation United Energy Distribution can offer 'Competition and Social Responsibility'. It will also allow us to:
- Avoid 'price shock adjustments' for customers, especially those on low or fixed incomes, low savers and those in debt;
- Encourage the prudent upgrade of the state's electricity infrastructure for the future;
- Provide premium reliability of electricity supply;
- Encourage progressive undergrounding of electricity assets raising property values and visual amenity; and
- Provide a hardship policy for those individuals willing but unable to pay their electricity account, ensuring that they will not be disconnected.
In our submission, we stated that we can deliver these new levels of customer service if the level of earnings allowed for our business is adequate to stimulate the investment required. Moreover, we are confident that higher levels of service can be achieved without a real price increase. This requires, however, the delivery of incentive and quality-based regulation, rather than regulation focused on 'cost of service.'
In 1999 we played a leading and outspoken role in the energy regulation debate. In the interests of our shareholders and customers, we will continue to do so.
