Positive outcome for Western Power's Mid West Energy Project
Release Date: 27 January 2012
The Economic Regulation Authority has given regulatory approval for Western Power's Mid West Energy Project (Stage 1 Southern Section), marking a significant milestone for the project and the Mid West.
Today's decision confirms that the benefits the Mid West Energy Project will bring to customers outweigh the cost of the infrastructure, providing assurance that the project is an efficient means of meeting the future power needs of customers.
Western Power's Managing Director Doug Aberle said the decision is significant, and an important step forward for the project.
"We are pleased with today's decision. The positive New Facilities Investment Test outcome means we can now progress with a number of final approvals, as we move toward construction of the transmission line starting in April of this year," he said.
"The Authority has determined that the economic benefits of this large project are significantly greater than the project cost. The flow on benefits to the broader Mid West region could be substantially larger.
"We are particularly pleased that by working closely with the ERA and our stakeholders to address some quite complex issues, that a positive outcome has been achieved."
In its decision, the ERA has accepted the majority of Western Power's responses to issues raised in its November draft determination.
The figure quoted by the ERA today ($383.4M) was the amount in Western Power's original submission in November 2011, however, Western Power advised the ERA in December that the revised cost would be $378.9M.
Today's determination has given approval for $377.8M to be included in Western Power's asset base. Our revised cost agrees with the ERA's assessment of an efficient cost to within 99.7%. The difference of $1.1M relates to the size of a new transformer at Three Springs, which Western Power has selected to ensure all future growth scenarios can be met.
The Mid West Energy Project Stage 1 is an important project as it will provide the capacity to meet an increasing demand for electricity in the Mid West and facilitates the connection of power generators and loads to the network. This will strengthen the reliability and security of the network.
The Mid West Energy Project is planned to be completed in Q1 2014, subject to the necessary final approvals being granted.
A copy of the final determination can be viewed on the ERA's website - www.erawa.com.au
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