❓ Hon. Norman Moore questions the Minister for Energy about Synergy's annual displacement statement and a price cut imposed on Verve Energy. The Minister clarifies the availability of the report and explains the pricing mechanism, citing commercial confidentiality for not tabling certain documents.
AnsweredQoN 557Legislative Council
QuestionView source ↗
SYNERGY — ANNUAL DISPLACEMENT STATEMENT
This question is to the same minister. I hope he has his mind on the job today. I refer the minister to his disclosure that Synergy’s 2007-08 annual displacement statement indicates that the average vesting price paid to Verve Energy for the year is $64.82 per megawatt hour, which is a cut of 5.9 per cent on the $68.88 paid the previous year. (1) Will the minister table the 2007-08 annual displacement report; and, if not, why not? (2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE
This question is to the same minister. I hope he has his mind on the job today. I refer the minister to his disclosure that Synergy’s 2007-08 annual displacement statement indicates that the average vesting price paid to Verve Energy for the year is $64.82 per megawatt hour, which is a cut of 5.9 per cent on the $68.88 paid the previous year. (1) Will the minister table the 2007-08 annual displacement report; and, if not, why not? (2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE
AnswerView source ↗
I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(1) Will the minister table the 2007-08 annual displacement report; and, if not, why not? (2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc.
(1) Will the minister table the 2007-08 annual displacement report; and, if not, why not? (2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(2) Will the minister table the Office of Energy report recommending the cut in price paid to Verve for 2007-08? (3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(3) If the minister will not table the report, will he outline the main reasons that Verve Energy had a price cut imposed on it? (4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(4) Does the $64.82 figure in the 2007-08 displacement report include price cuts imposed on Verve in the second half of 2007? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
I thank the honourable Leader of the Opposition for some notice of the question. (1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(1) Synergy’s “Annual Displacement Statement of Opportunities” for 2007-08—the ADSOO—is a public document produced by Synergy and is available on the Synergy website. (2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(2) No. The report on the vesting contract reset outlines the annual revisions to the pricing arrangements under the vesting contract. However, as the pricing under the vesting contract is commercially confidential, the report is also confidential. (3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
(3) Synergy pays Verve Energy for energy and capacity credits under the vesting contract based on netback pricing, meaning that Verve Energy is paid a price that reflects Synergy’s revenue from tariff customers and inherited retail contracts covered by the vesting contract less a net retail margin, which is kept by Synergy, less network tariffs paid to Western Power and less other defined costs relating to Synergy’s participation in the wholesale electricity market. Prices are reset under the vesting contract annually in accordance with the formulae specified in the schedules to the vesting contract. Vesting contract prices are confidential, but the rest of the vesting contract is a public document. A copy of the vesting contract, excluding prices, can be obtained from the Office of Energy’s website. As a result, it is open to anybody to review the specific reset calculation methodology. The Office of Energy annually undertakes the reset calculations in the schedules to the vesting contract based on data provided by Synergy, Verve Energy, Western Power and the Independent Market Operator. Synergy and Verve Energy are fully involved in the reset processes. Given the tariff freeze, a limited amount of tariff revenue has been available to support Synergy, Verve Energy and Western Power. The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc. (4) The ADSOO provides Synergy’s forecasts of the “average vesting price” over a 10-year period. As such, the ADSOO does not indicate the actual prices that Synergy will pay to Verve Energy in any given year. However, it should be noted that in making its forecasts in the ADSOO, Synergy accounts for the annual vesting contract resets by making assumptions on each of the key inputs into the netback calculation—tariff volumes, retail tariff prices, network tariff prices, market fees and regulatory charges. Synergy’s assumptions for each of these inputs are provided in the ADSOO.
The prices that Verve Energy receives for supplying electricity under the netback pricing mechanism under the vesting contract are reset annually to account for the factors listed above. Therefore, the annual changes to the prices Verve Energy receives are effectively determined by changes in Synergy’s vesting revenues, which are determined largely by tariff volumes and the regulated tariff rates and changes in costs under the vesting contract. These changes in costs are determined by other wholesale electricity purchases for vesting contract customers, Synergy tariff volumes and Western Power’s network tariffs and other costs—market fees, regulatory charges etc.
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