Diversified Utility and Energy Trusts (DUET) Welcomes Final Regulatory Decision on UED - Release by Macquarie International Infrastructure Fund Limited's Investment in DUET

Diversified Utility and Energy Trusts (DUET) welcomes today’s final decision by the Victorian Essential Services Commission (ESC) on the 2006 Electricity Distribution Price Review (EDPR) for United Energy Distribution (UED), which is a substantial improvement on the draft decision and confirms UED’s capacity to make distributions to DUET over the 2006-2010 regulatory period.

The 2006 EDPR determines the pricing and service parameters for UED for the 2006-2010 period.  DUET is the majority owner of UED, with a 66% interest.

The ESC’s final decision contains some significant variations from the draft decision released in June this year, as shown in the table below.

Key Parameter	Draft Decision	Final Decision
Po (Average real price reductions in 2006)	-22.7%	-14.7%
x-factor (CPI – x% yearly increase formula)	2.5%	2.5%
Po with metering #	-23.4%	-15.6%
x-factor with metering #	1.4%	1.4%
Total revenue (2004$, with metering # )	$1,266.7m	$1,326.3m
Volume growth	2.5%	1.6%
WACC	5.9%	5.9%

 

# includes the cost of the interval meter installation program for the 2006-2010 regulatory period

 

DUET and UED support the ESC’s movement on a number of issues in the final decision regarding UED.  In particular, the ESC has revised its position on volume growth rates and capital expenditure requirements.  This will enable UED to continue to improve its service to customers in the future.

 

DUET and UED will now conduct a full analysis of the ESC’s final decision to determine the extent of any concerns. 

 

DUET distribution guidance

 

DUET has forecast a minimum total distribution of 22.5 cents per stapled security for the year to 30 June 2006, with an undertaking to provide an update on expectations following the 2006 EDPR final decision.  DUET and UED expect to complete their full analysis of the ESC’s final decision in the near term and following that DUET will update its 2006 distribution guidance.