We are pleased to present our Draft Plan for the South Australian gas distribution network for the 2021/22 to 2025/26 Access Arrangement (AA) period. Our Draft Plan sets out very high reliability – one our plan for the next AA hour off supply every 40 period and underpins years on average; and our commitment to offer 1,000 km of mains replaced affordable, safe and since 2016 – future proofing our network. reliable services to our customers. Our Draft Plan outlines how we will continue to deliver on these Australian Gas Networks (AGN) is expectations. It follows more than part of Australian Gas 12 months of engagement with Infrastructure Group (AGIG), one our customers and stakeholders. of Australia’s largest energy Our engagement activities have infrastructure businesses. Our included a series of workshops, South Australian distribution ongoing engagement with our network plays a crucial role in the stakeholder reference groups, and economy and community more co-design workshops. broadly in serving the energy needs of households, small Three key themes have emerged businesses and industry in from this engagement: Adelaide and the regions. not surprisingly affordability Our intention is that customers and price remain the key are at the centre of our plans. issue for the majority of our This will ensure that we deliver for customers; our customers now and into the customers want to ensure future. Our plan seeks to clearly expenditure and investment outline what we have delivered for remain at levels necessary to our customers in the current) AA maintain the safety and period (2016/17 to 2020/21) and reliability of the network; and what we will deliver in the next AA period (2021/22 to 2025/26). the future of gas is a key issue for our customers who In the current AA period we have want to ensure that the demonstrated our commitment to benefits of natural gas delivering on the safety, reliability continue to be available as and service expectations of our South Australia strives customers. In 2018/19 we towards a carbon neutral achieved: economy. our highest ever customer Our Draft Plan delivers on these satisfaction rating 8.4 out of themes. An upfront price cut of 10; and 8% from 1 July 2021 follows on excellent public safety from a 23% cut to our prices five performance – responding to years earlier. Meanwhile our 99% of publicly reported expenditure will maintain the leaks within 2 hours; safety of the network, including through around 860 km of mains replacement. 4 DRAFT PLAN 2021/22-2025/26 CEO FOREWORD We also outline the initial I strongly encourage our investments that will position the customers and stakeholders to South Australian network for the provide feedback and seek out our future. A recurring theme from engagement activities across our customer and stakeholder South Australia. With your engagement was around emission feedback, we can develop and reductions, and specifically what provide a Final Plan to the we are doing to decarbonise Australian Energy Regulator in energy supply. July 2020 reflective of customer and stakeholder needs now and Further, emission reductions are into the future. increasingly driven by government policy and technology as well as Ben Wilson customer preferences. South Chief Executive Officer, Australia has now proposed to Australian Gas Infrastructure reduce its emissions to 50% of Group 2005 levels by 2030. It is therefore vitally important that gas networks remain at the forefront of this transition. That is why we are presenting proposals to integrate green hydrogen and biogas into our network. We are confident about the future of the network – it represents a significant investment that can deliver safe, reliable and affordable energy with zero emissions in the future. However, the transition underway in the energy sector is not without risks for gas networks – risks over and above those being faced by electricity networks. Yet gas and electricity networks receive effectively the same rate of return. In this light, the prices we propose represent exceptional value for our customers and the South Australian economy. In developing the Draft Plan our objectives are to develop a plan that delivers for current and future customers, is underpinned by effective stakeholder engagement, and is capable of being accepted by our customers and stakeholders. Publishing the Draft Plan is a key part of our no surprises approach. It helps to ensure that customers remain at the centre of our planning. DRAFT PLAN 2021/22-2025/26 5 CEO FOREWORD C 6 DRAFT PLAN 2021/22-2025/26 CEO FOREWORD 7 DRAFT PLAN 2021/22-2025/26 CEO FOREWORD 8 9 Our Draft Plan outlines the activities and Plan investments we propose to undertake for the Highlights 2021/22 to 2025/26 period and the resulting price change for our customers. IN THIS CHAPTER: Our intention is that Our vision is to continue to deliver customers are at the quality services that our We have a strong track customers value, be recognised as centre of our plans. record of safety, reliability a good employer and to remain and customer service in Therefore our Draft Plan sustainably cost efficient. During the current period. has been informed by a the current period we have customer and delivered on that vision, and we An upfront price cut for the stakeholder engagement aim to continue our progress next AA period of 8% during the next AA period. builds on price cuts of program lasting more than 12 months. Our key achievements during the 23% delivered at the current AA period so far are beginning of the current This section highlights how we summarised below. AA period. have developed our Draft Plan, our achievements for the current Delivering for customers period and the key elements of Our customer satisfaction our proposal for the next period. scores have continued to increase, to 8.4 in 2019, our 1.1 Developing this highest score ever. plan Excellent public safety We engaged extensively with a performance – responding to diverse range of customers and 99% of publicly reported stakeholders to understand their leaks within 2 hours. values, needs and expectations of Very high reliability – one the services we provide. hour off supply every 40 Across a series of 14 dedicated years on average. customer workshops spanning five We will have connected over locations and 239 participants, we 30,000 customers this period, listened and informed our Draft bringing our total customer Plan. base to around 450,000. In the development of this Draft 93% of Emergency calls have Plan we have completed stages been answered within 30 one and two of our engagement seconds, with an average program. Further feedback and time to answer calls of 8.4 engagement activities will help to seconds. further refine our Final Plan for submission to the AER in July A good employer 2020. The Total Recordable Injury 1.2 Our track record Frequency Rate (TRIFR) has averaged 10.6 across AGN Over the current period we have since we began tracking this met the high expectations of our metric in 2018. customers and stakeholders, Employee engagement scores including meeting key safety, have remained at or near the reliability and customer service standards set for our business. 10 DRAFT PLAN 2021/22-2025/26 PLAN HIGHLIGHTS top decile for our industry, the transition to a low carbon significant investment that can averaging 76%. gas supply. deliver safe, reliable and affordable energy with zero 99% of compliance training We will invest $32 million on emissions well into the future. has been completed within projects and programs to the required timeframes. continue to meet the service When these risks are taken into expectations of our account, the prices we propose Sustainably cost efficient customers, including meter represent exceptional value for We will have replaced over replacement, IT and digital our customers and for the South 1,000 km of mains in the services. Australian economy. current period, consistent A good employer with the undertaking we gave to our customers and We will continue to target stakeholders. zero harm throughout our operations. The Adelaide CBD mains replacement is on track for We will maintain top decile completion, which will see all employee engagement scores mains classified as high risk in to ensure we remain the Adelaide CBD replaced by customer and safety the end of the current AA focussed. period. Sustainably cost efficient Opex is expected to be 11% Our combined operating and below our allowance, the capital expenditure will be benefits of which are passed maintained at current levels, onto our customers in our while our network continues proposals for the next period. to grow in size and customer These saving reflect one-off numbers. benefits from our merger with AGIG in 2017. We will make the initial investments that will secure 1.3 What we will the long-term future of the SA deliver distribution network as the state works towards net-zero Our Draft Plan for the next period emissions by 2050. builds on our strong performance over the current period. The Overall, our Draft Plan delivers an activities and expenditure we upfront price cut of 8%, followed propose to undertake in the next by increases of 1.2% per year five years are summarised below. (before inflation) thereafter reflecting the growth in our Delivering for customers regulated asset base. This builds We will connect around on our price cut of 23% delivered 43,000 new residential, at the beginning of the current business and industrial period, and means that by 2025/26 customers. customers will be paying around 20% less (before inflation) than We will replace around what customers paid in 2010/11.