United Energy

 

www.unitedenergy.com.au

United Energy's electricity distribution network covers 1,472 km2 of south-east Melbourne and the Mornington Peninsula

The distribution network transports electricity from the high voltage transmission network to residential, commercial and industrial electricity users.

United Energy's distribution area is largely urban and, although geographically small (about 1% of Victoria's land), serves around 25% of Victoria's population.

Snapshot
Ownership interest 66%
Revenue ($ million) 480
EBITDA ($ million) 334
Regulatory reset date 1 January 2016

Revenue streams

United Energy’s distribution business generates predictable, regulated revenues. Approximately 92% of United Energy’s total revenue comes from network tariffs and metering charges, for the use of United Energy’s distribution network and for the use of the transmission grid. The tariffs are levied on electricity retailers, who pass these costs on to their customers. Growth in network tariff revenue is driven by volume growth and regulated network tariff charges.

Other revenue comes from services which United Energy provides to its customers, such as relocating assets at the request of our customers, extending existing distribution networks, providing public lighting to local council areas, and access charges for the use of electricity distribution poles to telecommunication companies.

The regulatory price determinations, which regulate the majority of these revenues, are undertaken by the Australian Energy Regulator (AER) every five years.

Mature Network, Stable Customer base

United Energy’s distribution area is largely urban. While it covers only about 1% of Victoria’s land area, it is home to around 25% of the state’s population. Approximately 90% of United Energy’s end customers are residential.  

Regulation

United Energy’s current regulatory period covers 2011–2015. United Energy has regulator-approved annual tariff increases of CPI+ 8.1% for 2015. 

The next regulatory reset date for United Energy is 1 January 2016. In response to regulatory rule changes which required distribution businesses to undertake customer consultation on network investment planning, in November 2013 United Energy commenced a comprehensive stakeholder engagement program to inform the preparation of its next regulatory submission to the AER. The submission is due to be lodged with the AER in April 2015.

Advanced Meter Infrastructure (AMI) program

United Energy achieved practical completion of its best endeavours rollout obligation at 30 June 2014, with 96.2% of customers having received a new smart meter. United Energy is working through replacing meters for remaining customers. All supporting IT and communications infrastructure has been successfully deployed, allowing for accurate and timely meter reading.

With the rollout complete, United Energy is now focussing on delivering the benefits of smart meter technology, including more efficient faults identification and restoration, flexible pricing, targeted investment to address network constraints and innovations in demand management. 

The introduction of smart metering is recognised nationally as a key component of improving network services and efficiency to customers.

Network Strategy and Innovation

United Energy has taken a proactive approach to analyse and respond to emerging changes in the sector. This includes the introduction of demand management initiatives to address peak demand in extreme weather events, the future structure of tariffs to adapt to evolving customer interaction with the network and the trial of new technologies including a combination of solar panels and battery storage under UE’s Virtual Power Plant pilot project. The work is aligned with United Energy’s vision to create the Intelligent Utility to meet the energy needs of customers now and into the future.

Operational overview

 
Year to 30 June 2014 Year to 30 June 2013
Network connections
Small (residential & unmetered) 600,243 593,588
Medium size business 56,150 55,651
Commercial & industrial 3,303 3,173
Total 659,696 652,412
Electricity load - GWh
Small tariff 2,829 2,929
Medium tariff 1,378 1,443
Large tariff 3,545 3,589
Total electricity load 7,752 7,961
Distribution network statistics
SAIFI (number of interruptions) 1.1 1.1
MAIFI (number of interruptions) 1.1 1.3
Unplanned SAIDI (minutes) 79 78
Occupational health and safety
Lost time injuries 0 3
Environmental
Scope 1 CO2-e emissions   10,149 t

Financial summary

$ million
Year to 30 June 2014 Year to 30 June 2013
Distribution revenue 358 335
467 480 467
EBITDA 334 318

Credit ratings

Rating levels as at 20 November 2014:

S&P BBB (stable outlook)
Moody's Baa2 (stable outlook)