The Australian Energy Regulator (AER) yesterday approved a five year, $1.8 billion capital expenditure programme for ETSA Utilities, which operates the South Australia electricity distribution network.

According to the AER, this capex programme will result in network charges for retail customers increasing by approximately 15 per cent in 2010-11, followed by 8 per cent increases each year over the following 4 years. The increase in network charges will be incorporated by your power company into their retail tariffs from 1 July 2010 onwards.

According to AER chairman Steve Edwell, this level of capex is required to “ensure the capacity of the network meets future demand from both new and existing customers, including meeting the continuing growth in peak demand. The load is growing as customers continue to install air conditioners and other appliances. In addition, there is a need to address risks associated with ageing assets to maintain reliability for customers. The cost of materials and labour and financing costs are also increasing”.