At Envestra’s annual general meeting, Mr Allpass expressed concerns about the rate of return, operating costs and capital expenditure program allowed by the Australian Energy Regulator (AER) in its draft decisions.

“We do not believe the AER’s approach properly reflects equity investors’ expected returns in the current global economic climate. Without an improvement in the rate of return in the AER’s final decision, we will have to review our proposed investment program in Victoria,” said Mr Allpass.

Mr Allpass also reported that the company was maintaining its previous guidance of a profit after tax of approximately $100 million for 2012-13.

Gas volumes for the residential and smaller commercial market (from which the company earns over 90 per cent of its revenues) during the first three months of 2012-13 were 10 per cent higher than in 2011-12, reflecting cooler weather, particularly in the southern states. In addition, revenues for the quarter are $22 million higher than last year, which had unusually warm weather.

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Envestra expects to invest $230 million during the year expanding its networks and to connect approximately 24,000 consumers, as well as continuing its program of replacing old cast iron and steel mains. The company said that at this stage, the capital expenditure program for 2012-13 is running largely in accordance with expectations.