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Inquiry into Final Access Determination for Domestic Transmission Capacity Service

Welcome to the DTCS Final Access Determination Industry Forum, part of the public inquiry into the pricing structures for the Domestic Transmission Capacity Service (DTCS). This forum will cover topics such as route definitions for inter-capital, regional, and metropolitan services, pricing for tail-end services, the development of the linear regression model, and non-price terms of access. We will discuss our approach toward developing a fair pricing model and seek your input as we move towards a draft and final determination by the ACCC.

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Inquiry into Final Access Determination for Domestic Transmission Capacity Service

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  1. Industry Forum Inquiry into making a Final Access Determination for the Domestic Transmission Capacity Service

  2. 1. Welcome to the DTCS FAD Industry Forum Part of the public inquiry into a final access determination for the domestic transmission capacity service

  3. AGENDA • Welcome - Ed Willett • Background and approach to pricing the DTCS - Rob Nicholls • Route definitions and distance issues - Grahame O'Leary • Pricing tail-end DTCS services– Grahame O’Leary • Development of the linear regression model - Grahame O'Leary • Pricing protected and unprotected services - Grahame O'Leary • Non-price terms and conditions of access - Grahame O'Leary • Conclusion and next steps - Ed Willett

  4. 2. Background • Competition and Consumer Act 2010 requirementAccess determinations may include price and non-price terms • 2010 - ACCC inquiry into DTCS pricing and domestic benchmarking approach • December 2010 - Information sought from transmission providers • April 2011 - DTCS IAD published • June 2011 - DTCS FAD public inquiry and discussion paper • August 2011 – DTCS FAD Industry Forum

  5. 3. Route definitions ACCC proposes to adopt the following route definitions: • inter-capital routes • regional routes • metropolitan routes • regional tail-end routes and • metropolitan tail-end routes

  6. 3. Route definitions • Inter-capital route - from an ESA in a capital city to an ESA in another capital city • Darwin and Hobart to be priced as inter-capital routes • Regional route - at least one ESA outside a capital city • Metropolitan route – wholly within a capital city • Regionaltail-endroute - wholly within a single ESA outside a capital city • Metropolitantail-end route - wholly within a single ESA inside a capital city

  7. 3. Capital city boundaries • ACCC proposes to define the boundaries of capital cities as: • Adelaide – a 25 km radius from a CBD ESA • Brisbane – a 25 km radius from a CBD ESA • Canberra – a 15 km radius from a CBD ESA • Darwin – a 10 km radius from a CBD ESA • Hobart – a 10 km radius from a CBD ESA • Melbourne – a 45 km radius from X km east of the CBD • Perth – a 30 km radius from a CBD ESA • Sydney – a 50 km radius from a CBD ESA • No radial boundaries for regional centres

  8. Boundary of Sydney

  9. Boundary of Melbourne

  10. 3. Distance issues • Distance is measured in different ways: • Radial distance • Specified regional routes • Regional areas • DTCS IAD used radial distance

  11. 4. Pricing tail-end DTCS services • Tail-end services appear to be provided as: • part of a bundle of transmission service, or • a stand-alone service. • DTCS IAD priced tail-end services as stand-alone services.

  12. 4. Pricing tail-end DTCS services • The ACCC is considering prices for: • stand-alone tail-end services • metro route prices for tail-end services bundled with metro or inter-capital services • regional route prices for tail-end services bundled with regional services

  13. A short break See you at 11.00am

  14. 5. The linear regression model • Prices set by benchmarking prices of competitive transmission services. • Draft regression model on ACCC website • Draft regression model estimates annual charge for different: • capacities • distances • network interface, and • level of protection.

  15. 5. The linear regression model • Draft DTCS FAD to include annual charges and connection charges • Draft DTCS FAD will include final regression model

  16. 6. Pricing protected and unprotected services • DTCS should be priced as a protected service • DTCS IAD prices are for protected services • Draft regression model estimates prices for protected and unprotected DTCS services • Final FAD regression model will include prices for protected and unprotected DTCS services

  17. 7. Non-price terms and conditions of access • The non-price terms in the DTCS IAD cover the following areas: • Billing and notification • Creditworthiness and security • General dispute resolution and procedures • Confidentiality provisions • Communications with end-users • Network modernisation and upgrade provisions • Suspension and termination, and • Facilities access.

  18. Non-price terms and conditions of access Commencement and expiry • DTCS FAD will commence on publication • DTCS IAD automatically revoked • DTCS FAD expiry 31 March 2014 when DTCS declaration expires

  19. 8. Conclusion and next steps • Submissions to Discussion Paper close on 29 August 2011. • ACCC expects a draft DTCS FAD for public comment in third quarter 2011. • ACCC final DTCS FAD in December 2011.

  20. Thank you for your participation

  21. www.accc.gov.au

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