Matt Rodgers

Report

Discount rates for use in cost benefit analysis of AEMO’s 2022 Integrated System Plan

Synergies developed a report for AEMO that recommended an appropriate WACC-based discount rate range for private sector investment in Australia’s National Electricity Market to be used in the development of AEMO's 2022 Integrated System Plan.

Case study

Asset valuation confusion under Australia’s National Gas Rules

The introduction of the information disclosure and arbitration provisions under Part 23 of the Australian National Gas Rules in August 2017 has resulted in an unsuitable asset valuation methodology, the so-called ‘recovered capital method’ (RCM), becoming the default valuation methodology to be used in arbitrations involving gas pipelines and their users (shippers). This is because it is incompatible with price formation in workably competitive markets, a concept which underpins the objective of Part 23.

The ...

Report

Transpower – Independent Verifier RCP3

Our final verification report formed part of Transpower’s RCP3 Proposal submitted to the Commerce Commission in December 2018. Our independent verifier role was undertaken in accordance with a signed tripartite deed between Synergies, Transpower and the Commerce Commission

Report

Determining a WACC estimate for Port of Melbourne 2019

The purpose of this report is to provide an estimate of the return on capital for the Port of Melbourne (PoM) for its second regulatory year under the regulatory framework established by the Port Management Act (Vic) 1995 and Pricing Order. To determine an estimate of the return on capital that is consistent with the Pricing Order, the key requirement is that the Port Licence Holder (PoM) must use one or a combination of well-accepted ...

Case study

Independent verifier of Transpower’s RCP3 expenditure proposal

Synergies (in partnership with GHD Advisory) was engaged by Transpower to provide an independent verification opinion on Transpower’s third regulatory control period (RCP3) base capital expenditure and operating expenditure forecasts relating to the 2020-25 period. This included testing the assumptions underpinning Transpower’s expenditure and demand forecasts prior to the submittal of its RCP3 proposal, as well as making recommendations to enhance the substantiation of specific components of its expenditure proposal.

Report

Independent Verification Report – Transpower’s RCP3 Expenditure Proposal (2020-25)

Synergies and GHD Advisory (GHDA) have been engaged to provide an independent verification opinion on Transpower’s RCP3 Base Capex and opex forecasts relating to the 2020-25 period for Transpower and the Commerce Commission (the Commission).

Case study

ATCO’s proposed Network Innovation Scheme

Synergies was engaged by ATCO Gas (ATCO) to prepare an expert report establishing the economic case for an innovation incentive scheme – the Network Innovation Scheme – to be incorporated into its proposed access arrangement to the WA Economic Regulation Authority (ERA) for the 2020 to 2024 regulatory period. The proposed Network Innovation Scheme was intended to be in the long-term interests of WA gas consumers through encouraging ATCO Gas to seek out new and ...

Report

Synergies Consulting Report with updated Wage price index (WPI) forecasts for Western Power’s AA4 regulatory period

This chapter presents our updated WPI forecasts for Western Power’s AA4 regulatory period. It also explains the economic drivers underpinning our updated WPI forecasts and the reasons for some small differences between our original and updated forecasts.

Report

Economic assessment of exclusive licensing of towage services at Port of Gladstone

Gilbert & Tobin engaged Synergies to provide advice in relation to a challenge by its client Svitzer to the Gladstone Ports Corporation’s (GPC’s) intention to maintain exclusive licensing of harbour towage service. Synergies’ advice was an economic assessment of the underlying assumptions and arguments used to support this exclusive towage licencing arrangement, including information disclosed in King & Wood Mallesons’ (KWM’s) submissions and Price Waterhouse Coopers’ (PwC’s) supporting submission.

Report

Determining a WACC estimate for Port of Melbourne 2018

The purpose of this report is to provide an estimate of the return on capital for the Port of Melbourne (PoM) for its second regulatory year under the regulatory framework established by the Port Management Act (Vic) 1995 and Pricing Order. To determine an estimate of the return on capital that is consistent with the Pricing Order, the key requirement is that the Port Licence Holder (PoM) must use one or a combination of well-accepted ...

Report

Risk Comparison Between Aurizon Network and Energy and Water Networks

Synergies examined the risk profile of Aurizon Network in order to assess comparability with regulated energy and water networks. The report concluded that, while regulation can modify the impact of commercial and market risks on a business, it cannot fundamentally alter the nature of the market risks borne by a business.

Report

Western Power’s productivity performance

Synergies has been engaged to undertake productivity analysis of Western Power’s historical operating and capital expenditure using economic benchmarking techniques along the lines of those applied by the Australian Energy Regulator. The results of our analysis are used to form a view on the likely efficiency of Western Power’s expenditure forecasts incorporated in its Access Arrangement 4 (AA4) for the 2017-18 to 2021-22 regulatory period.

Insight

Navigating a path through the national energy policy morass

The almost weekly major energy policy announcements by State and Commonwealth Governments in recent times brings to mind the old cliche of never letting a good (energy) crisis go to waste. Sadly, the lack of national direction and various recent uncoordinated Government policy announcements to address short term political problems could be laying the groundwork for future crises regarding the security and reliability of Australia’s electricity and gas supplies.

Report

Determining a WACC estimate for Port of Melbourne 2017

The purpose of this report is to provide an estimate of the return on capital for the Port of Melbourne (PoM) for its second regulatory year under the regulatory framework established by the Port Management Act (Vic) 1995 and Pricing Order. To determine an estimate of the return on capital that is consistent with the Pricing Order, the key requirement is that the Port Licence Holder (PoM) must use one or a combination of well-accepted ...

Insight

The AER’s Draft Ring-fencing Guideline – is the balance right?

The Australian Energy Regulator (AER) has released its Draft Ring-fencing Guideline (the Draft Guideline) and explanatory statement. The new guideline will apply to all electricity Distribution Network Service Providers (DNSPs) across the National Electricity Market (NEM) in terms of their engagement in emerging contestable energy markets.

Report

ACCC Applying Hilmer Principles in a Changing Energy Market 2016

Nearly twenty-five years ago, Hilmer set out a transformative framework for delivering better products and services at lower prices from Australia’s public utilities. At that time, the electricity industry was largely publicly owned, self-regulated, bereft of competition and inefficient. The largest gains to customers were rightly thought to come from measures that would improve productive efficiency.

Insight

Applying Hilmer Principles in Changing Energy Markets

In 1993, the Hilmer Report presented a ground breaking review of national competition policy, establishing the framework for public utility regulation in Australia that has, in large part, defined today’s electricity industry structure. The emphasis of those reforms, particularly in respect of utilities, was to deliver better and lower cost services to customers.

Insight

Australian Competition Tribunal energy merits review decisions

On 26 February 2016, the Australian Competition Tribunal released its decisions in relation to the merits review appeals made by Ausgrid, Endeavour Energy, Essential Energy, ActewAGL, Jemena Gas Networks and the Public Interest Advocacy Centre under the national electricity regulatory framework. The key aspects of the Tribunal’s decisions and its implications are summarised below.

Report

Impact of green energy policies on electricity prices

Synergies/ROAM Consulting has assessed the costs of green energy policies from 2001-02 to 2013-14 on retail electricity costs, for both small (residential/small business) and large (consumption of greater than 5 gigawatt-hours (GWh) per annum) customers across the mainland National Electricity Market (NEM). This includes thousands of businesses, some that qualify for government assistance under the Renewable Energy Target (RET) and carbon price, and others that do not, such as non-trade exposed manufacturing, dairy farms, office ...

Report

Advice on NBN Co Ltd’s Special Access Undertaking

Synergies was engaged by Chorus to prepare a report which compared and contrasted building block approaches for determining allowable revenue for regulated industries in Australia. The report we prepared discussed key elements of the building block approach including Regulatory Asset Base (RAB), RAB roll-forward, return on and of capital, opex and maintenance expenditure, tax, and efficiency mechanisms.

Report

Measuring the contribution of the Outdoor Recreation Sector in Queensland

Synergies was engaged by the Queensland Outdoor Recreation Federation (QORF) to develop a report providing an independent assessment of the financial contribution of outdoor recreation to the community. The report also outlined where further research was necessary to fully under the economic contribution of the sector.

Report

Review of Labour Cost Escalation Issues under National Electricity Rules

Powerlink has asked Synergies to critically assess and provide advice in relation to the Australian Energy Regulator’s (AER’s) Draft Decision to reject Powerlink’s real labour forecasts for the 2013-17 regulatory control period and substitute its own forecasts generated by its consultant based on an alternative measure of labour costs.

Report

AER Estimating a WACC for the APT Allgas Distribution Network

Synergies Economic Consulting (Synergies) has been engaged by the APA Group (APA) to review aspects of the Weighted Average Cost of Capital (WACC) to apply to the APT Allgas Energy Pty Ltd (APT Allgas) gas distribution network as part of its forthcoming review by the Australian Energy Regulator (AER).