The Australian Energy Regulator (AER) has today approved the 2019–20 distribution network tariffs as proposed by Power and Water (Northern Territory).
These distribution network tariffs implement the first year of the AER’s 2019 distribution determination, which reduced the amount of revenue Power and Water could recover from its customers over 2019–24.
Network charges comprise of distribution and transmission components to cover the costs of networks delivering electricity to households and businesses, and these costs are declining for Power and Water in 2019–20. However due to falling demand, Power and Water realised a significant under-recovery of revenue in the last two years of its current period, which has been carried forward to result in an increase in overall network charges in 2019–20.
As the Northern Territory Government regulates retail electricity prices through the Electricity Pricing Order that caps retail prices, the distribution network tariffs will have no impact on the retail bill of most Northern Territory customers.
The approved distribution network tariffs will take effect from 1 July 2019.
Background
The AER approves tariffs which are the network cost component of a retail bill.
Retailers use networks tariffs to develop their market offers.
Network tariffs are one component that can impact a bill. Other components include distribution, transmission, wholesale and retail.