The Australian Energy Regulator has approved the 2016 electricity network tariffs for Victorian distributors CitiPower, Powercor, Jemena Electricity Networks, AusNet Services, and United Energy.
These businesses’ poles and wires (the networks) carry electricity from high voltage transmission lines to household and commercial customers’ premises. In Victoria approximately 20 to 40 per cent of a customer’s retail bill is related to regulated network tariffs. A range of other factors including actual electricity use, the retail plans customers choose, individual retail charges and wholesale costs, also help determine final bills that customers pay.
“The AER’s role is to ensure that consumers pay no more than necessary for the safe and reliable delivery of electricity. The proposed network tariffs were approved based on the revenue that the AER permitted the Victorian distributors to recover from customers in its preliminary decision in October 2015. The distributors can only recover approved costs from customers,” AER acting chair Jim Cox said.
“Generally for 2016, consumers will see some reductions in their network charges but much larger reductions in their meter charges. Provided their retailer fully passes through these savings, users will pay less next year than in the last twelve months, for the same usage,” Mr Cox said.
“While the AER expects that businesses will pass through these savings, consumers are urged to shop around and take advantage of competitive retail market offers to ensure they get the benefits of the distributors’ network tariff reductions.” Mr Cox added.
Victorian customers can compare retail offers with Victorian Energy Compare – https://compare.switchon.vic.gov.au/.
The network tariffs will be amended to account for any difference in revenue when the AER issues its final decision for the Victorian distributors in April 2016 after further consultation. Any such changes will take effect from 1 January 2017.
| Business | Typical residential network tariff reduction, $ p.a. | Typical residential meter tariff reduction, $ p.a. | Retail tariff change, per cent p.a. |
|---|---|---|---|
| CitiPower | -$0.85 | -$21.26 | -1.78 |
| Powercor | -$88.70 | -$14.49 | -6.50 |
| Jemena | -$0.69 | -$95.90 | -6.67 |
| AusNet Services | -$12.61 | -$88.68 | -6.26 |
| United Energy | -$17.74 | -$62.96 | -5.82 |
Notes: based on benchmark annual Victorian household consumption of 4905KWh Network tariff is single rate peak only. Assumes full network tariff pass through, and all other costs held equal.
Background
The AER only regulates network tariffs. This is an annual compliance check to ensure that proposed network revenues for the upcoming year are no more than permitted under the price controls set by the AER for 2016.
The AER has no role in approving or assessing retail tariffs. These have been deregulated and are subject to full competition.