AER Ruling on Network Charges

by Energy Action | Nov 02, 2015
The Australian Energy Regulator has released its final revenue determination for the Queensland and South Australia distribution network businesses and its preliminary revenue determination for the Victorian distribution network businesses.

Customers in South Australia will on average receive a real increase of 7.02% for financial year 2016/17 and a real increase of 1% for each of the following three years. This is significantly higher than was expected, and reverses price cuts indicated in the regulators draft decision on South Australian network prices handed down in April.

Customers in Queensland will on average receive a real decrease of 6.55% to 7.55% for financial year 2016/17 and real decreases of 6.45% to 2.35% for the following three years. These price changes are similar to those indicated for Queensland networks in the draft determination.

These final determinations may be subject to appeal by the network businesses in South Australia and Queensland in which case the revised price changes would not be known until sometime in 2016.

The final determinations for the South Australia and Queensland networks will not affect price reductions already enacted and which will remain for the current financial year.

In delivering its preliminary determination for Victoria the regulator is proposing average real reductions of 6.75% to 9.18% for each calendar year 2016 and 2017 and with prices then increasing at close to CPI for the following three years.

Whilst the final determination will not be made until April 2016 the Victorian network businesses will now set their prices for calendar 2016 based on the preliminary determination. Should the final determination be different from the preliminary determination any changes will be incorporated into calendar years 2017 to 2020.

The network price changes that individual customers will receive will not be exactly those stated in this briefing note. A better estimate of the actual changes will be available when the networks publish their Tariff Structure Statements later this year. (NB: Network charges represent about 40-50% of the total bill.)

Annual Real Changes in Allowable Revenues, Queensland & South Australia

 

2016/17

2017/18

2018/19

2019/20

Energex

-6.55%

-6.45%

-5.65%

-4.85%

Ergon

-7.55%

-5.05%

-2.65%

-2.35%

SA Power Networks

+7.02%

+1.00%

+1.00%

+1.10%


Source: AER: Final Decision Queensland/South Australia Distribution Determination 2015-16 to 2019-20 adjusted for CPI estimated at 2.75% for Queensland network businesses.

Annual Real Changes in Allowable Revenues, Victoria

 

2016

2017

2018

2019

2020

Citipower

-6.75%

-6.75%

+0.45%

+0.45%

+0.45%

Jemena

-9.18%

-9.18%

-1.34%

+0.64%

+0.64%

Powercor

-7.96

-7.96%

+0.75%

+0.75%

+0.75%

SPAusNet

-8.12%

-8.12%

0.00%

0.00%

0.00%

United

-8.72%

-8.72%

0.00%

0.00%

0.00%


Source: AER: Draft Decision Victoria Distribution Determination 2016 to 2020. 

Leave a comment