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Distribution Annual Planning Report 2018 (DAPR) Is Prepared and Made Available Solely for Information Purposes

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Distribution Annual Planning Report 2018 (DAPR) Is Prepared and Made Available Solely for Information Purposes Version Control Version Date Description 1.0 31 December 2018 Final Further Information Further information on Ergon Energy’s network management is available on our website: https://www.ergon.com.au/network/network-management Disclaimer Ergon Energy’s Distribution Annual Planning Report 2018 (DAPR) is prepared and made available solely for information purposes. Ergon Energy makes no representations, express or implied, as to the completeness or accuracy of the information and data contained in the DAPR and accepts no liability arising for any loss resulting from the use of any information and data or reliance placed on it. Nothing in this DAPR should be taken as a recommendation in respect of any possible investment. It does not purport to contain all of the information and contains certain predictions, estimates and statements that reflect various assumptions. Those assumptions may or may not prove correct, and may change over time. The information contained in the DAPR is subject to annual review. An updated DAPR will replace this version in December 2019. Persons reading this document acknowledge and accept that Ergon Energy and/or its employees, agents and consultants shall have no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matter (expressed or implied) arising out of, contained in or derived from, or for any omissions from, the information contained in this DAPR. All financials presented in this document are correct at the time of writing and represent the existing organisational accounting treatment, which may be subject to change. Energy Queensland is still finalising the alignment of its Cost Allocation Methodology between Ergon and Energex, potentially impacting the treatment of some Capital and Operational Project costs. Distribution Annual Planning Report 2018-19 to 2022-23 ii Contents Executive Summary ........................................................................................................................ 1 1. Introduction ............................................................................................................................... 7 1.1 Foreword ...................................................................................................................................... 7 1.2 Reporting Requirements ............................................................................................................. 8 1.3 Network Overview ........................................................................................................................ 8 1.4 Peak Demand ............................................................................................................................. 10 1.5 Changes from 2017 DAPR ........................................................................................................ 11 1.6 DAPR Enquiries ......................................................................................................................... 12 2. Ergon Energy Overview ......................................................................................................... 14 2.1 Corporate Overview ................................................................................................................... 14 2.1.1 Vision .............................................................................................................................. 14 2.1.2 Purpose .......................................................................................................................... 14 2.1.3 Energy Queensland Transformation Objectives ............................................................. 15 2.1.4 Business Function .......................................................................................................... 16 2.2 Ergon Energy Electricity Distribution Network ....................................................................... 16 2.3 Network Operating Environment .............................................................................................. 18 2.3.1 Physical Environment ..................................................................................................... 18 2.3.2 Economic Activity ............................................................................................................ 19 2.3.3 Social and Demographic Change ................................................................................... 20 2.3.4 Technological Change .................................................................................................... 20 2.3.5 Shareholder and Government Expectations ................................................................... 21 2.3.6 Community Safety .......................................................................................................... 22 2.3.7 Environmental Commitments .......................................................................................... 22 2.3.8 Legislative Compliance ................................................................................................... 23 2.3.9 Economic Regulatory Environment ................................................................................ 24 3. Community and Customer Engagement.............................................................................. 26 3.1 Overview ..................................................................................................................................... 26 3.2 Our Engagement Program ........................................................................................................ 27 3.2.1 Online Engagement ........................................................................................................ 27 3.2.2 Customer Council Framework ........................................................................................ 28 3.2.3 Community Leader Forums ............................................................................................ 28 3.2.4 Voice of the Customer Program ..................................................................................... 28 3.2.5 Queensland Household Energy Survey .......................................................................... 29 3.2.6 Regulatory Proposal and Tariff Structure Statement Customer Research ..................... 29 3.3 What We Already Know ............................................................................................................. 31 3.4 Addressing Customer Concerns .............................................................................................. 32 3.4.1 Affordability ..................................................................................................................... 32 3.4.2 We have forecast a program of proactive savings .......................................................... 32 3.4.3 Our customers have directly influenced our plans .......................................................... 32 3.4.4 Safe and secure networks .............................................................................................. 33 3.4.5 Sustainable energy solutions .......................................................................................... 33 3.4.6 Facilitating energy transformation and customer choice ................................................ 34 3.4.7 Providing timely, affordable and easy network connections ........................................... 35 3.4.8 Facilitating renewables ................................................................................................... 35 4. Asset Management Overview................................................................................................ 38 4.1 Best Practice Asset Management ............................................................................................ 38 4.2 Asset Management Policy ........................................................................................................ 38 4.3 Strategic Asset Management Plan ........................................................................................... 38 Distribution Annual Planning Report 2018-19 to 2022-23 iii 4.4 Investment Process ................................................................................................................... 39 4.4.1 Corporate Governance ................................................................................................... 39 4.5 Further Information ................................................................................................................... 41 5. Network Forecasting .............................................................................................................. 43 5.1 Forecast Assumptions .............................................................................................................. 43 5.1.1 Customer Behaviour ....................................................................................................... 43 5.1.2 Solar PV Systems ........................................................................................................... 44 5.1.3 Electric Vehicles ............................................................................................................. 46 5.1.4 Energy (battery) Storage ................................................................................................ 46 5.1.5 Temperature Sensitive Load and Air conditioning Growth ............................................. 46 5.1.6
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