The Australian Energy Regulator today issued its supplementary draft decision on the prices which will apply to public lighting services provided by the NSW electricity distribution businesses (Country Energy, EnergyAustralia and Integral Energy) for the regulatory control period 2009–10 to 2013–14.
The prices do not include energy costs or network charges.
AER Chairman, Mr Steve Edwell, said public lighting has been a vexed issue in NSW for some time.
"Many councils are concerned about proposed price increases, service performance and access to energy efficient lighting. These concerns were reinforced at the AER's public forum last November."
"The AER has undertaken a detailed analysis of the charging arrangements for public lighting proposed by the distribution businesses and has established a new regime to determine public lighting charges and prices," Mr Edwell said.
The key aspects of this new regime are:
- a simplified and consistent tariff structure
- separate treatment of existing (as at 1 July 2009) and new assets
- a value of assets for each customer which more accurately reflects the condition of their assets
- cost reflective prices for new public lighting assets
- greater clarity to assist councils to determine when it is economic for them to replace existing lights with energy efficient lights.
The AER has proposed a reduction in overall charges for Country Energy and EnergyAustralia for existing public lighting assets in 2009–10 and a slight increase in overall charges for Integral Energy.
The impact on councils of the proposed change in charges is set out in attachment 1. The AER estimates that the average bill for councils in the Country Energy and EnergyAustralia's networks in 2009–10 would be reduced on average by 33 per cent and 7 per cent respectively, compared with 2008–09 bills, while bills for Integral Energy's councils would increase by 1 per cent. Because the new regime establishes a cost reflective basis for charges the outcomes for each customer will vary significantly.
The 2009–10 prices proposed by the AER in this draft decision for existing public lighting assets for Country Energy, EnergyAustralia and Integral Energy are 14 per cent, 22 per cent and 3 per cent on average lower than those put forward by the businesses respectively.
The AER's detailed analysis confirmed that the efficient cost of installing new public lighting assets is generally higher than the tariffs previously approved by IPART. This analysis also identified significant variations in installation costs between the businesses.
Based on this analysis the AER has proposed increases in 2009–10 prices for new public lighting assets. The proposed prices, however, are 22 per cent, 10 per cent and 2 per cent lower on average than those proposed by Country Energy, EnergyAustralia and Integral respectively. Attachment 2 compares a composite of prices put forward by the businesses for key new lights against a composite of the same prices proposed by the AER.
The AER has also reviewed the proposed charges for the early replacement of existing public lighting assets with energy efficient lights.
"The AER considers that the charge for replacing existing assets should be based on the residual value of the asset being replaced rather than a charge based on the cost of a new asset," Mr Edwell said.
The AER welcomes feedback on its supplementary draft decision. Interested parties have until 27 March to provide comments to the AER.
Background
In February 2008 the AER issued its statement on its approach to regulating public lighting services for NSW. The AER proposed to apply a schedule of fixed prices for the first year of the regulatory period and a price path for the remaining years of the period. This approach would have broadly maintained the regulatory approach adopted by IPART.
On 2 June 2008, Country Energy, EnergyAustralia and Integral Energy submitted their regulatory proposals to the AER for the 2009–14 regulatory control period. The proposals included a submission on public lighting charges to apply to the next regulatory period. Consistent with the AER's statement on control mechanisms, the tariffs had been developed by combining the capital costs of both new and existing assets.
The AER reviewed the public lighting proposals submitted by the businesses and identified a number of issues with them, including that the current pricing schedules were not cost reflective, the businesses did not have comprehensive records of the age and condition of assets and that it was not appropriate to apply replacement costs to prices for existing assets. In order to address these issues the AER revised its approach to approving public lighting charges in its November 2008 draft decision. As a consequence, businesses were required to submit two schedules of prices for 2009–10, one for assets constructed before 1 July 2009 and another for those assets constructed after 30 June 2009.
On 16 January 2009, the DNSPs lodged their revised proposals (including their proposed schedules of public lighting tariffs) with the AER. The proposals were published on the AER's website. The AER has reviewed in detail the models used by the businesses to calculate their proposed tariffs including opening asset bases, allocation of assets to customers and other key inputs and assumptions. The supplementary draft decision discusses this review and the changes that have been made in determining the AER's approved tariffs.
The AER will make its final decision on the prices and price paths to apply to NSW public lighting services as part of its final distribution determination for the NSW distribution businesses in late April 2009.
Attachment 1 compares the estimated total bills* for each council for 2009–10 using the tariffs proposed by each distribution business for existing assets against the council's 2008–09 bills. It also compares the estimated total bills for each council for 2009–10 using the charges approved by the AER for 2009–10 against the council's 2008–09 bills.
*This is the bill for assets constructed before 1 July 2009, it does not include new assets that are constructed after that date.
Attachment 2 compares a composite of tariffs proposed by the businesses in June 2008 for key new lights against a composite of the same tariffs approved by the AER. The composite includes tariffs for a bracket, luminaire and associated maintenance costs.
Attachment 1: Impact of draft decision on council bills
Country Energy
| Customer bills ($ nominal p.a.) ^ |
% Change from current 2008-09 to CE proposed (January) 2009-10 |
% Change from current 2008-09 to AER revised 2009-10 |
| ARMIDALE DUMARESQ COUNCIL | -27% | -41% |
| BALLINA SHIRE COUNCIL | -24% | -39% |
| BALONNE SHIRE COUNCIL | -19% | -34% |
| BALRANALD SHIRE COUNCIL | 7% | -5% |
| BATHURST REGIONAL COUNCIL | 7% | -11% |
| BEGA VALLEY SHIRE COUNCIL | -12% | -35% |
| BELLINGEN SHIRE COUNCIL | -23% | -37% |
| BERRIGAN SHIRE COUNCIL | -22% | -43% |
| BLAND SHIRE COUNCIL | -17% | -37% |
| BLAYNEY SHIRE COUNCIL | -22% | -36% |
| BOGAN SHIRE COUNCIL | -11% | -34% |
| BOMBALA SHIRE COUNCIL | -20% | -41% |
| BOOROWA COUNCIL | -20% | -41% |
| BOURKE SHIRE COUNCIL | -16% | -31% |
| BREWARRINA SHIRE COUNCIL | -41% | -52% |
| BROKEN HILL CITY COUNCIL | -26% | -45% |
| BYRON SHIRE COUNCIL | -18% | -33% |
| CABONNE SHIRE COUNCIL | -22% | -36% |
| CARRATHOOL SHIRE COUNCIL | -20% | -40% |
| CENTRAL DARLING SHIRE COUNCIL | -27% | -46% |
| CITY OF ALBURY | -21% | -41% |
| CITY OF WAGGA WAGGA | -23% | -43% |
| CLARENCE VALLEY COUNICL | -23% | -38% |
| COBAR SHIRE COUNCIL | -1% | -26% |
| COFFS HARBOUR CITY COUNCIL | -10% | -24% |
| CONARGO SHIRE COUNCIL | -19% | -40% |
| COOLAMON SHIRE COUNCIL | -22% | -41% |
| COOMA-MONARO COUNCIL | -18% | -39% |
| COONAMBLE SHIRE COUNCIL | -11% | -33% |
| COOTAMUNDRA SHIRE COUNCIL | -20% | -40% |
| COROWA SHIRE COUNCIL | -22% | -42% |
| COWRA SHIRE COUNCIL | -16% | -31% |
| DENILIQUIN MUNICIPAL COUNCIL | -20% | -41% |
| DUBBO CITY COUNCIL | -9% | -31% |
| DUNGOG SHIRE COUNCIL | 7% | -6% |
| EAST GIPPSLAND SHIRE COUNCIL | -3% | -29% |
| EUROBODALLA SHIRE | -19% | -40% |
| FORBES SHIRE COUNCIL | -9% | -31% |
| GILGANDRA SHIRE COUNCIL | -3% | -27% |
| GLEN INNES SEVERN SHIRE COUNCIL | -10% | -25% |
| GLOUCESTER SHIRE COUNCIL | 7% | -10% |
| GOONDIWINDI SHIRE COUNCIL | -10% | -25% |
| GOULBURN MULWAREE COUNCIL | -21% | -41% |
| GREAT LAKES | 7% | 7% |
| GREATER HUME SHIRE COUNCIL | -16% | -37% |
| GREATER TAREE | 7% | 3% |
| GRIFFITH CITY COUNCIL | -24% | -43% |
| GUNDAGAI SHIRE COUNCIL | -22% | -42% |
| GUNNEDAH SHIRE COUNCIL | -9% | -26% |
| GUYRA SHIRE COUNCIL | -9% | -24% |
| GWYDIR SHIRE COUNCIL | -18% | -33% |
| HARDEN SHIRE COUNCIL | 7% | -7% |
| HASTINGS COUNCIL | 7% | 2% |
| HAY SHIRE COUNCIL | -21% | -41% |
| INGLEWOOD SHIRE COUNCIL | -27% | -41% |
| INVERELL SHIRE COUNCIL | -18% | -33% |
| JERILDERIE SHIRE COUNCIL | -28% | -47% |
| JUNEE SHIRE COUNCIL | -17% | -37% |
| KEMPSEY SHIRE COUNCIL | 3% | -14% |
| KYOGLE SHIRE COUNCIL | -23% | -37% |
| LACHLAN SHIRE COUNCIL | -15% | -31% |
| LEETON SHIRE COUNCIL | -25% | -44% |
| LISMORE CITY COUNCIL | -18% | -33% |
| LIVERPOOL PLAINS SHIRE COUNCIL | 7% | -13% |
| LOCKHART SHIRE COUNCIL | -11% | -33% |
| MID-WESTERN REGIONAL COUNCIL | -22% | -42% |
| MOREE PLAINS SHIRE COUNCIL | -11% | -27% |
| MURRAY SHIRE COUNCIL | -20% | -40% |
| MURRUMBIDGEE SHIRE COUNCIL | -21% | -41% |
| NAMBUCCA SHIRE COUNCIL | -25% | -39% |
| NARRABRI SHIRE COUNCIL | -21% | -36% |
| NARRANDERA SHIRE COUNCIL | -20% | -40% |
| NARROMINE SHIRE COUNCIL | -9% | -32% |
| OBERON COUNCIL | -6% | -26% |
| ORANGE CITY COUNCIL | -21% | -34% |
| PALARANG COUNCIL | -21% | -41% |
| PARKES SHIRE COUNCIL | -5% | -21% |
| QUEANBEYAN CITY COUNCIL | -23% | -43% |
| RICHMOND VALLEY COUNCIL | -19% | -34% |
| ROADS AND TRAFFIC AUTHORITY | -32% | -47% |
| SHOALHAVEN CITY COUNCIL | -20% | -42% |
| SNOWY RIVER SHIRE COUNCIL | -21% | -41% |
| STANTHORPE SHIRE COUNCIL | -19% | -34% |
| TAMWORTH REGIONAL COUNCIL | 7% | -12% |
| TEMORA SHIRE COUNCIL | -25% | -44% |
| TENTERFIELD SHIRE COUNCIL | -26% | -41% |
| TUMBARUMBA SHIRE COUNCIL | -18% | -38% |
| TUMUT SHIRE COUNCIL | -20% | -40% |
| TWEED SHIRE COUNCIL | -25% | -39% |
| UPPER HUNTER SHIRE COUNCIL | 2% | -23% |
| UPPER LACHLAN COUNCIL | -19% | -40% |
| URALLA SHIRE COUNCIL | -28% | -42% |
| URANA SHIRE COUNCIL | -18% | -39% |
| WAGGAMBA SHIRE COUNCIL | -21% | -37% |
| WAKOOL SHIRE COUNCIL | -18% | -39% |
| WALCHA SHIRE COUNCIL | -28% | -42% |
| WALGETT SHIRE COUNCIL | -16% | -31% |
| WARREN SHIRE COUNCIL | -3% | -27% |
| WARRUMBUNGLE SHIRE COUNCIL | -18% | -39% |
| WEDDIN SHIRE COUNCIL | -10% | -26% |
| WELLINGTON SHIRE COUNCIL | -22% | -42% |
| WENTWORTH SHIRE COUNCIL | 0% | -25% |
| YASS VALLEY COUNCIL | -20% | -41% |
| YOUNG SHIRE COUNCIL | -20% | -41% |
| Average percentage change | -16% | -33% |
^The above list is comprised of councils only and includes a rebate.
EnergyAustralia
| Customer bills ($ nominal p.a.) ^ |
% Change from current 2008-09 to EA proposed (January) 2009-10 |
% Change from current 2008-09 to AER revised 2009-10 |
| ASHFIELD MUNICIPAL COUNCIL | 33% | -6% |
| AUBURN MUNICIPAL COUNCIL | 6% | -7% |
| BANKSTOWN CITY COUNCIL | 15% | -6% |
| BAULKHAM HILLS COUNCIL | 6% | -7% |
| BOTANY MUNICIPAL COUNCIL | 18% | -6% |
| BURWOOD MUNICIPAL COUNCIL | 5% | -8% |
| CANTERBURY MUNICIPAL COUNCIL | 7% | -7% |
| CESSNOCK CITY COUNCIL | 11% | -7% |
| CONCORD MUNICIPAL COUNCIL | 9% | -8% |
| DRUMMOYNE MUNICIPAL COUNCIL | 7% | -8% |
| GOSFORD CITY COUNCIL 860 | 21% | -7% |
| HORNSBY SHIRE COUNCIL | 14% | -6% |
| HUNTERS HILL MUNICIPAL COUNCIL | 9% | -6% |
| HURSTVILLE CITY COUNCIL | 13% | -7% |
| KOGARAH MUNICIPAL COUNCIL | 12% | -7% |
| KU-RING-GAI MUNICIPAL COUNCIL | 17% | -6% |
| LAKE MACQUARIE CITY COUNCIL | 20% | -5% |
| LANE COVE MUNICIPAL COUNCIL | 19% | -6% |
| LEICHHARDT MUNICIPAL COUNCIL | 17% | -6% |
| MAITLAND CITY COUNCIL | 8% | -6% |
| MANLY MUNICIPAL COUNCIL 850 | 24% | -7% |
| MARRICKVILLE MUNICIPAL COUNCIL | 22% | -6% |
| MOSMAN MUNICIPAL COUNCIL 83 | 12% | -6% |
| MUSWELLBROOK SHIRE COUNCIL | 10% | -7% |
| NEWCASTLE CITY COUNCIL | 21% | -6% |
| NORTH SYDNEY MUNICIPAL COUNCIL | 30% | -6% |
| PARRAMATTA CITY COUNCIL | 3% | -9% |
| PITTWATER MUNICIPAL COUNCIL | 52% | -6% |
| PORT STEPHENS SHIRE COUNCIL | 19% | -5% |
| RANDWICK CITY COUNCIL | 9% | -7% |
| ROCKDALE MUNICIPAL COUNCIL | 15% | -7% |
| RYDE MUNICIPAL COUNCIL | 14% | -6% |
| SINGLETON SHIRE COUNCIL | 8% | -6% |
| STRATHFIELD MUNICIPAL COUNCIL | 18% | -6% |
| SUTHERLAND SHIRE COUNCIL | 18% | -7% |
| SYDNEY CITY COUNCIL 411 | 16% | -7% |
| UPPER HUNTER SHIRE COUNCIL | 10% | -7% |
| WARRINGAH SHIRE COUNCIL 851 | 24% | -7% |
| WAVERLEY MUNICIPAL COUNCIL | 13% | -7% |
| WILLOUGHBY CITY COUNCIL | 6% | -7% |
| WOOLLAHRA MUNICIPAL COUNCIL | 15% | -7% |
| WYONG SHIRE COUNCIL 861 | 21% | -7% |
| Total | 15% | -7% |
^The above list is comprised of councils only.
Integral Energy
| Customer bills ($ nominal p.a.) ^ |
% Change from current 2008-09 to EA proposed (January) 2009-10 |
% Change from current 2008-09 to AER revised 2009-10 |
| BANKSTOWN CITY COUNCIL | -37% | -39% |
| BAULKHAM HILLS SHIRE COUNCIL | 26% | 24% |
| BLACKTOWN CITY COUNCIL | 13% | 11% |
| BLUE MONTAINS CITY COUNCIL | 1% | -1% |
| CAMPBELLTOWN CITY COUNCIL | 8% | 6% |
| COUNCIL OF THE CITY OF SHELLHARBOUR | 6% | 4% |
| EVANS SHIRE COUNCIL | 58% | 57% |
| FAIRFIELD CITY COUNCIL | 0% | -2% |
| HAWKESBURY CITY COUNCIL | -1% | -3% |
| HOLROYD CITY COUNCIL | -7% | -9% |
| HORNSBY SHIRE COUNCIL | -18% | -19% |
| KIAMA MUNICIPAL COUNCIL | -4% | -6% |
| LITHGOW CITY COUNCIL | 4% | 2% |
| LIVERPOOL CITY COUNCIL | 16% | 14% |
| MID WESTERN REGIONAL COUNCIL | -9% | -10% |
| PARRAMATTA CITY COUNCIL | -8% | -10% |
| PENRITH CITY COUNCIL | 11% | 9% |
| RYDE CITY COUNCIL | -28% | -30% |
| SHOALHAVEN CITY COUNCIL | 0% | -2% |
| THE COUNCIL OF CAMDEN | 29% | 27% |
| WINGECARRIBEE SHIRE COUNCIL | 3% | 1% |
| WOLLONDILLY SHIRE COUNCIL | 4% | 3% |
| WOLLONGONG CITY COUNCIL | -3% | -5% |
| Average percentage change | 3% | 1% |
^ The above list is comprised of councils only.
Attachment 2: Comparison of 2009-10 tariffs for key lights
| Distribution business | Light type | June 2008 proposal | AER Draft decison | % Change |
| EnergyAustralia(a) | 2*20W TF | 121.93 | 119.89 | -2% |
| 80W MV | 67.91 | 63.22 | -7% | |
| 2*14W T5 | 113.60 | 100.50 | -13% | |
| 42W CFL | 95.72 | 92.69 | -3% | |
| 150W HPS | 116.18 | 104.27 | -11% | |
| 250W HPS | 153.68 | 133.53 | -15% | |
| 250W MV | 138.07 | 120.79 | -14% | |
| 400W MV | 166.36 | 145.43 | -141% | |
| Country Energy | 2-20W TF(b) | - | - | - |
| 80W MV | 127.00 | 102.18 | -24% | |
| 2*14W T5(c) | - | 132.60 | - | |
| 42W CFL (d) | 151.00 | 118.65 | -27% | |
| 150W HPS | 207.00 | 160.85 | -29% | |
| 250W HPS | 200.00 | 162.36 | -23% | |
| 250W MV | 197.00 | 160.51 | -23% | |
| 400W MV(e) | 216.00 | - | - | |
| Integral Energy (g) | 2*20W TF(f) | 67.22 | - | - |
| 80W MV | 48.99 | 77.93 | 37% | |
| 2*14W T5 | 60.36 | 93.95 | 36% | |
| 42W CFL(h) | - | 91.81 | - | |
| 150W HPS | 128.28 | 97.01 | -32% | |
| 250W HPS | 118.08 | 143.42 | 18% | |
| 250W MV(i) | 116.91 | - | - | |
| 400W MV(j) | 95.81 | - | - |
(a) Assumptions were made to produce final tariffs. These include: 2m bracket for 2*20W TF, 80W MV, 2*14W T5, 42W CFL and 150W HPS. 5m bracket for250W HPA, 250W MV and 400W MV.
(b) This light is no longer being installed.
(c) Country Energy has not previously offered this light.
(d) Light being offered from 2009-10 onwards.
(e) Light is being replaced.
(f) Being replaced by 2x14W T5.
(g) Assumptions were made to produce final tariffs. These include: Minor bracket for 2*20W TF, 80W MV, 2*14W T5, 42W CFL and 150W HPS. Major bracket for 250W HPA, 250W MV and 400W MV.
(h) Light currently being proposed.
(i) Being replaced by 150W HPS.
(j) Being replaced by 250W HPS.