The Australian Energy Regulator has approved increases in Victorian electricity network tariffs for the period 1 January 2013 to 31 December 2013 for the distribution network service providers (DNSPs), CitiPower, Powercor, SP AusNet, Jemena Electricity and United Energy.
Network tariffs recover the costs associated with transporting electricity along the low and high voltage power lines. They typically make up between 30-40 per cent of total residential electricity bills in Victoria.
"Network charges for the average residential customer are expected to increase by 16 per cent in 2013," AER Chairman Andrew Reeves said.
“This would correspond to an average increase in retail tariffs of about 5 per cent. The impact of the approved network charges will differ, depending upon a customer’s individual tariff and to which DNSP the customer is connected.”
The AER is required to assess the Victorian DNSP’s annual pricing proposals to ensure that they comply with the AER’s electricity distribution determination for the current regulatory period (2011-15) which capped increases to network charges.
The increase in network charges in 2013 is based on the AER’s 2010 determination, but also includes year-on-year adjustments in charges for use of the transmission network, payments for solar PV feed-in tariffs, the outcomes from the Australian Competition Tribunal ‘s review of the AER’s 2010 price determination allowing the networks to claim higher allowances for the costs of debt and other items, and a bonus for improved network reliability. In addition, network charges for Powercor and SP AusNet include the pass through of additional costs for approved bushfire related safety expenditure.
The DNSP’s network tariffs for 2013 also include new time of use tariffs, known as flexible tariffs, which will come into force from 1 July 2013. This follows the Victorian Government’s initiative to allow customers who have a smart meter to move to these new tariffs, should they choose do so.
"For the average residential customer, the increase due to the increase in network charges would be approximately $80 on a $1900 annual total bill. The impact will vary according to the customer’s consumption and its location. A customer’s total bill may also be affected by changes in wholesale electricity costs and retail costs."
The AER’s approved network tariffs are available on the AER website, and the respective DNSP’s websites.
Background:
| DNSP | Typical Residential Network tariff increase 2012-13 | Network tariff increase 2012-13 |
|---|---|---|
| Citipower | $25 | 6% |
| Powercor | $60 | 9% |
| Jemena Electricity Networks | $89 | 18% |
| SP AusNet | $180 | 31% |
| United Energy | $54 | 11% |
- It is important to recognise that the estimated impact of the approved network tariff on individual customers will vary based on network tariff, consumption levels and retailers approach to pricing.
- Distribution network tariffs represent around 30-40 per cent of the total cost of supplying electricity to residential customers and the impact of network tariffs for 2013 are based on an estimated average annual consumption of 6 500 kWh.
- Typically, customers do not see network charges itemised on their final electricity bills. Instead, they are included in tariffs charged by electricity retailers, such as AGL, Origin Energy and EnergyAustralia.