The Australian Energy Regulator (AER) is seeking feedback on a draft decision that would reduce the amount Powerlink can recover from electricity customers by 29 per cent from 1 July 2017.
The Powerlink draft decision released today would result in average revenue of $744 million being recovered from consumers each year from 2017 to 2022, which is $281 million (in real 2016–17 dollar terms) less than revenue collected annually between 2012 and 2017.
Transmission costs account for less than 10 per cent of an average Queensland customer’s electricity bill. Our decision would result in an estimated average saving of $40 per household in each of the next five years, relative to the existing level, if wholesale, distribution and retail costs remain constant.
“Powerlink consulted with its customers and proposed reductions in the revenue required to operate its transmission network,” AER Board member James Cox said.
Powerlink proposed the majority of the savings in the draft decision. Additional savings identified by the AER are primarily a result of interest rate adjustments, as well as reduced capital expenditure.
“We have accepted Powerlink’s rate of return proposal and updated it for prevailing market conditions. We have also reduced Powerlink’s proposed capital expenditure forecast to ensure consumers are paying no more than necessary for electricity transmission.”
“Powerlink has improved the way it manages its assets in recent years but, having considered expert advice, we have concluded that the assets can be maintained for longer, avoiding capital investment costs that would have been recovered from customers over the next 5 years,” Mr Cox said.
“We have accepted Powerlink’s operating expenditure forecast.”
The AER has consulted with stakeholders and consumers in making this draft decision and is seeking submissions until 1 December 2016. Powerlink’s final decision will be made no later than 30 April 2017.