Victorian Auditor-General's Office

Appendix B. Audit Act 1994 section 16—submissions and comments

Introduction

In accordance with section 16(3) of the Audit Act 1994, a copy of this report, or part of this report, was provided to the Department of Economic Development, Jobs, Transport & Resources, the Department of Treasury & Finance and the Department of Premier & Cabinet.

The submissions and comments provided are not subject to audit nor the evidentiary standards required to reach an audit conclusion. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

Appendix A. Glossary

Definition of financial terms

Discounted cash flow

Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.

4 Maximising consumer benefits

At a glance

Background

The state has a responsibility to take an active oversight role in implementing the Advanced Metering Infrastructure (AMI) program to deliver the expected benefits. While it has no ability to directly control benefits realisation, the Department of Economic Development, Jobs, Transport & Resources (DEDJTR) can play a critical influencing role in engaging regulators and informing consumers on how to maximise benefits.

1 Background

1.1 Introduction

When an electrical appliance is switched on, power is instantly transmitted from a power station to the appliance. Although this occurs instantaneously, a specific sequence of events takes place to ensure the required electricity is delivered.

Key players involved in the supply of electricity are:

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