Industry ForumInquiry into making a Final Access Determination for the

Domestic Transmission Capacity Service

1. Welcome to the DTCS FAD Industry Forum

Part of the public inquiry into a final access determination for the

domestic transmission capacity service

AGENDA

1. Welcome - Ed Willett

2. Background and approach to pricing the DTCS - Rob Nicholls

3. Route definitions and distance issues - Grahame O'Leary

4. Pricing tail-end DTCS services– Grahame O’Leary

5. Development of the linear regression model - Grahame O'Leary

6. Pricing protected and unprotected services - Grahame O'Leary

7. Non-price terms and conditions of access - Grahame O'Leary

8. Conclusion and next steps - Ed Willett

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

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

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

• Regional tail-end route - wholly within a single ESA outside a capital city

• Metropolitan tail-end route - wholly within a single ESA inside a capital city

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

Boundary of Sydney

Boundary of Melbourne

3. Distance issues

• Distance is measured in different ways:• Radial distance• Specified regional routes• Regional areas

• DTCS IAD used radial distance

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.

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

A short break

See you at 11.00am

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.

5. The linear regression model

• Draft DTCS FAD to include annual charges and connection charges

• Draft DTCS FAD will include final regression model

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

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.

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

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.

Thank you for your participation

www.accc.gov.au