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4647.0 - Alternative View of Electricity and Gas Supply Activity , 2006-07 to 2007-08 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 29/09/2009  First Issue
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TECHNICAL NOTE 3 METHODOLOGY USED TO GENERATE ALTERNATIVE VIEW


INTRODUCTION

1 The methodology developed in an Research Paper: Developing an Alternative View of Electricity and Gas Supply Activity in Australia (cat. no. 4647.0.55.001) has been applied in this publication to produce estimates in Chapters 1-3, see the following diagram.

Diagram: 1.5 INTRODUCTION


GAS PROPORTION OF MINING AND TRANSPORT

2 Data on the gas supply industry is supplemented with data on gas extraction and transport from the mining and transport industries. Businesses mainly engaged in the extraction of gas and the high-pressure transport of gas are classified to the ANZSIC 2006 industry Divisions B: Mining and I: Transport, Postal and Wholesaling respectively, and not to the gas supply industry. The purpose of this treatment is to ensure consistency with the ANZSIC 2006 classificatory framework, which groups business units carrying out similar productive activities, together within an industry boundary.

3 This treatment is sound for energy statistics users who wish to focus on domestic and international industry comparisons. However, some energy statistics users wish to focus exclusively on productive activity associated with specific energy products, which may be produced and value added across a number of ANZSIC industries. The focus of this alternative view is to assist these users by using a methodology to derive estimates of productive activity associated with electricity supply and gas supply irrespective of the industry associated with the productive activity.


RECLASSIFYING ELECTRICITY AND GAS ACTIVITY

4 Industry statistics assign businesses to ANZSIC 2006 industries on the basis of predominant activity, and compile statistics for each industry based on the data for businesses assigned to that industry.

5 The alternative view presented in this publication reclassifies the data for businesses to either electricity supply or gas supply. This is simple for those businesses involved in electricity supply (but not gas supply) or gas supply (but not electricity supply), with all data allocated to electricity supply and gas supply respectively.

6 For those businesses involved in both electricity supply and gas supply, the data needs to be split between these two activities. For sales and service income (referred to as "sales" hereafter), data for total sales, electricity supply sales and gas supply sales is available for each business. Any sales from other sources are allocated to electricity supply and gas supply in proportion to electricity supply sales and gas supply sales.

7 For the other key data items, Industry Value Added (IVA), Wages and salaries (W&S) and Employment, only the total for each of these data items was collected for each business, and a methodology is required to split these totals between electricity supply and gas supply.

8 For those businesses involved in electricity supply (but not gas supply) or gas supply (but not electricity supply), the sales per IVA, sales per W&S and sales per Employment ratios are known across all those businesses supplying only electricity and across all those businesses supplying only gas. It would seem reasonable to assume that these ratios be maintained for each of the electricity supply and gas supply components of "mixed" businesses. So an estimate of electricity supply IVA (EIVA) for a mixed business is calculated as the total IVA of the business multiplied by the sales per IVA across all those businesses supplying only electricity. An estimate of gas supply IVA (GIVA) for a mixed business is calculated similarly. Estimates for electricity/gas supply for W&S and Employment for a mixed business are calculated in the same way.

9 But these estimates of electricity and gas supply data items for a mixed business will not sum to the total for the data item for that mixed business (for example, total IVA (TIVA)). To ensure the electricity and gas supply estimates sum to the required total, a factor (for example, for IVA the factor will be TIVA / (EIVA + GIVA) ) is applied to each of the estimates to provide final estimates. This not only ensures that the electricity and gas supply estimates sum to the required total, but also ensures that the relativities between electricity supply and gas supply ratios are maintained.


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