The Australian Energy Regulator has issued its draft decision on the 2017–22 revenue proposal for AusNet Services’ Victorian electricity transmission network. Transmission charges typically make up around 5 per cent of an average Victorian household’s electricity bill. Other components of consumer bills include the cost of generation, distribution network charges, and retailer costs. The AER does not regulate generation or retail costs or approve retail prices.
The draft decision is to approve revenue of $2695.0 million over the five years from 2017–22. This is a 14.7 per cent reduction compared to the $3160.5 million proposed by AusNet Services.
“We understand that electricity bills are a big concern for many consumers. This is why we undertake a thorough review of the businesses’ proposals to ensure that consumers are paying no more than necessary for a safe and reliable supply of electricity and gas. Our process also involves reaching out to consumers to understand their views.” AER Chair Paula Conboy said.
“If implemented, our draft decision will result in transmission charges in Victoria remaining stable for households over the next 5 years. This follows on from our recent final decisions on distribution network charges in Victoria which provided for reductions in those charges over the next 4 years”.
“In part, our draft decision reflects the current investment environment with low interest rates compared to previous years. This translates to lower financing costs necessary to attract efficient investment. We have also applied a lower corporate tax allowance, consistent with our rate of return guideline”.
“We have considered the views of stakeholders and the AER’s Consumer Challenge Panel (CCP) in forming our draft decision. The CCP assists the AER to make better regulatory determinations by providing input on issues of importance to consumers.”
The AER is seeking submissions on whether the draft decision has struck the right balance between keeping network charges as low as possible and enabling AusNet Services to deliver a safe and reliable supply of electricity. Submissions will be considered when making the final decision, due no later than the end of January 2017. Submissions should be made to the AER by 21 September 2016. Details on submissions and our public forum on the draft decision can be found on our website.
We encourage customers to shop around for the best deal. Victorian customers can compare retail offers with Victorian Energy Compare – https://compare.switchon.vic.gov.au/.