The AER today published three determinations relating to pass through applications received from ActewAGL Distribution (ActewAGL), Energex Limited (Energex) and Ergon Energy Corporation Limited (Ergon Energy). These pass through applications reflect the changing costs ActewAGL, Energex and Ergon Energy experienced during 2011–12 as a result of feed-in payments made under the solar bonus schemes (SBS) operating in the Australian Capital Territory (ACT) and Queensland.
The current five-year determinations of the maximum revenue which may be earned by ActewAGL (made in 2009) and Energex and Ergon Energy (made in 2010) contain a pass through mechanism which allows the approved revenue for each distributor to be adjusted in certain circumstances. Under these determinations, ActewAGL, Energex and Ergon Energy are entitled to submit a feed-in tariff pass through application to the AER for assessment if actual costs are different to the allowances included in the original determinations. Each application is, in effect, a request to pass through to customers costs which were not included in the determination. We are required to approve an application provided that it satisfies the relevant requirements in the National Electricity Rules (NER) and the determination.
We have assessed each pass through application in accordance with clause 6.6.1 of the NER and the determination currently applying to each business and are satisfied that the proposed pass through amounts meet these requirements. This means that in 2013–14:
- ActewAGL will decrease its approved revenue by $727 564 (a decrease of 0.5% from the determination)
- Energex will increase its approved revenue by $78 560 900 (an increase of 6% from the determination)
- Ergon Energy will increase its approved revenue by $27 808 270 (an increase of 2% from the determination)
From 1 July 2013 the above changes in revenue will be passed through to those ACT and Queensland consumers who are supplied electricity by ActewAGL, Energex and Ergon Energy. For ActewAGL customers the decrease in revenue will be returned back to customers in the form of lower network charges. For Energex and Ergon Energy customers the increase in revenue can be recovered from customers through higher network charges.
The increased feed-in costs in Queensland reflect the fact that consumer participation in the SBS (through the installation of photo-voltaic systems, or solar panels) has been significantly greater than was forecast. These forecasts were made by Energex and Ergon Energy when the current determinations were decided. At that time, the SBS was a relatively new initiative and there was little historical data upon which Energex and Ergon Energy could rely to make their forecasts. In fact, consumer participation in the SBS has been substantial. Participation in the scheme also increased rapidly following the announcement of the Queensland Government on 26 June 2012 to close the existing scheme to new applications from midnight on 9 July 2012.
The Queensland Competition Authority, in a recent review of the SBS, estimated that at the peak of its impact in 2015-16, the costs of the SBS will add $120 to an average Tariff 11 (residential retail tariff) customers’ annual electricity bill. [Queensland Competition Authority, Draft Report- Estimating a Fair and Reasonable Solar Feed-in Tariff for Queensland, November 2012, pp. 53-54. The final report is due to the Minister on 22 March 2013.]