NSW electricity distributors Ausgrid, Endeavour Energy and Essential Energy are proposing higher electricity charges over the next five years according to regulatory proposals submitted to the Australian Energy Regulator (AER). The distributors have proposed annual increases of 2%, on average, over the next five years. The distributors’ charges make up around 40% of consumers’ electricity bills.
TransGrid, the electricity transmission business in NSW, has proposed similar increases to those proposed by the distribution businesses. TransGrid’s charges make up around 10% of the cost of consumers’ electricity bills.
All four network businesses in NSW will be presenting their proposals at a public forum on 10 July in Sydney. Members of the public are welcome to attend the forum and ask questions of the business about the proposal. The AER’s Consumer Challenge Panel will also be attending the forum to put forward its perspectives on the proposals.
Over the next nine months the AER will be scrutinizing the proposals through a public review process. Anyone interested in participating in the review will be able to make written submissions or attend a public forum.
“While the increases are relatively small compared to the last five years, the distributors still need to justify the increases they are seeking. We would like to hear from consumers whether they think these increases are justified,” AER Chairman Andrew Reeves said.
“Investment conditions have improved since the last review in 2009 and the costs of financing of infrastructure businesses have come down markedly. Demand has softened and the NSW Government has eased network reliability standards. These factors will all have a bearing on prices.”
“What we are hearing from consumers is that electricity prices are too high and need to come down. At the same time, we need a reliable supply of electricity for our homes and businesses. It’s all about getting the balance right, so a critical part of the review will be the views of consumers” Mr Reeves said.
“In addition to submissions from the public, the AER has also established an expert panel including consumer advocates that advise the AER on whether pricing proposals are justified in terms of the services to be delivered to customers and whether the proposal is in the long term interests of consumers.”
The Consumer Challenge Panel assists the AER to make better regulatory determinations by providing input on issues of importance to consumers. The AER also has direct contact with representatives of consumers in the networks’ distribution areas.
The role of the AER is to set prices that encourage the efficient operation of and investment in electricity networks that is in the long term interests of consumers.
To help consumers better understand the proposals, the AER has released issues papers that focus upon the key aspects of the proposals. These highlight aspects of the proposals that drive prices and reliability – issues that impact on consumers need to be carefully examined.
Submissions should be sent to the AER by 1 August 2014. A draft determination is expected to be published in November 2014, and further submissions will be invited at that time. Final determinations will be made by April 2015, with new prices to commence on 1 July 2015.
Media opportunity
Media are invited to a doorstop with AER chairman Andrew Reeves and members of the Consumer Challenge Panel.
Time: 12:45pm
Date: 10 July 2014
Location: The Menzies, Sydney
14 Carrington Street, Sydney