The Australian Energy Regulator (AER) has approved 2021–22 electricity distribution network tariffs proposed by AusNet Services, CitiPower, Jemena, Powercor and United Energy in accordance with their 2021–2026 distribution revenue determinations.
This follows the AER’s approval of the proposed Victorian electricity distribution network tariffs from January to June 2021, to enable the Victorian distributors’ transition to operating on a financial year and align with all other National Electricity Market jurisdictions.
The result of both of these decisions means that most Victorian customers will generally be paying no more for network charges compared to 2020.
In January to June 2021, network prices for Victorian households fell between $19.68 and $41.13, and from $18.18 to $158.30 for small businesses.
On 1 July 2021 the 2021-22 annual network prices for Victorian customers will come into effect, and when compared to January to June 2021 are estimated to be:
- $51.53 higher for households and $178.87 higher for small businesses for AusNet Services’ customers;
- $64.44 higher for households and $74.83 higher for small businesses for CitiPower customers;
- $57.28 higher for households and $293.91 higher for small businesses for Jemena customers;
- $65.06 higher for households and $73.71 higher for small businesses for Powercor customers; and,
- $29.28 higher for households and $22.21 lower for small businesses for United Energy customers.
These increases are due to a range of factors including the impacts of the COVID-19 pandemic.
CitiPower, Jemena, Powercor and United Energy network price increases are predominantly driven by reduced consumption forecasts for 2021-22. Most networks are expecting less energy will be consumed, resulting in higher prices being set in order to recover the required revenue. As well as adjustments for previous under‑recovered revenue.
AusNet Services’ network price increases are primarily the result of its recent 2021–26 determination, which allowed it to recover more revenue due to the significant investment it made in reducing bushfire risks in recent years, and allowed depreciation recovery over the next five years.
Network tariffs relate to the network charges of an electricity bill while the other components of a bill are wholesale and retail costs.
Distributors are required to submit annual network tariffs they propose to charge their customers to the AER for approval.
The AER’s role in approving these network tariffs is limited to checking compliance with the National Electricity Rules and the AER’s relevant revenue determination, which is the amount of money networks can recover from customers to provide safe and reliable electricity.
It is important to note that retailers may repackage tariffs, and that different movements may be observed in other components of the retail bill, and therefore these estimated bill impacts may not actually be realised by retail customers. The Essential Services Commission Victoria also regulates retail prices for small customers on standing offers.