Financeability tests and their role in price regulation - IPART - NSW ...

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6 Summary of IPART’s preliminary views 38 IPART Financeability tests and their role in price regulation
A Modelling credit rating changes A Modelling credit rating changes In section 3.2 we demonstrated how changes in revenue, opex and capex impact on the notional credit rating of a regulated utility. In order to compute these changes, we used a simplified version on our building block model which is available on our website: http://www.ipart.nsw.gov.au/investigation_content.asp?industry=6&sector=17&in quiry=221&doctype=4&doccategory=1&docgroup=1 We computed the changes on the notional credit rating in this building block model by varying annual revenue, opex and capex. For all scenarios, we have held the Tariffs increases constant at 4.61%. 1. Varying revenue. We have varied the annual revenue by increasing or decreasing the revenue line in the “Tariffs” sheet by 30% (cells K53 to N53). 2. Varying capex. We have varied the annual capex by increasing or decreasing the capex line in the “Inputs” sheet by 30% (cells K71 to N71). We also held the revenue from sales constant, based on the 4.61% tariff increase per annum. 3. Varying opex. We have varied the annual opex by increasing or decreasing the opex line in the “Inputs” sheet by 30% (cells K90 to N90). We also held the revenue from sales constant, based on the 4.61% tariff increase per annum. Financeability tests and their role in price regulation IPART 39
Page 1: Independent Pricing and Regulatory
Page 4 and 5: © Independent Pricing and Regulato
Page 7 and 8: Contents Contents Invitation for su
Page 9 and 10: 1 Introduction 1 Introduction In ma
Page 11 and 12: 1 Introduction We expect that the o
Page 13 and 14: 2 Why do IPART and other regulators
Page 19 and 20: 3 How do IPART and other regulators
Page 21 and 22: 3.1.2 Computing the financial ratio
Page 23 and 24: 3 How do IPART and other regulators
Page 25 and 26: Box 3.1 Differences in financeabili
Page 27 and 28: 4 How IPART should address finaceab
Page 33 and 34: 5 How should IPART respond when a b
Page 37 and 38: IPART seeks comment 5 How should IP
Page 41 and 42: Box 5.4 Case study: Ofgem 5 How sho
Page 43: � identify the reasons for the de
Page 48 and 49: B Financeability tests in other jur
Page 50 and 51: 42 IPART Financeability tests and t
Page 52 and 53: 44 IPART Financeability tests and t
Page 54 and 55: C CEPA note on UK legislative requi
Page 56 and 57: C CEPA note on UK legislative requi
Page 58: D Quantifying the impact of credit

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