The Australian Competition Tribunal today confirmed the Australian Energy Regulator’s October 2015 revenue decision for South Australian Power Networks (SAPN), rejecting all grounds of review sought by the distribution network business.
The Tribunal found that the AER made no error in its approach and rejected SAPN’s appeal which sought to increase the revenue it could recover from customers through electricity bills.
In October 2015, the AER determined SAPN could recover $3.8 billion ($nominal) from its customers over five years, commencing 1 July 2015. This was based on the AER’s assessment of the costs for an efficient network business to provide a safe and reliable service to customers.
SAPN appealed to the Tribunal to recover an additional $250 million ($nominal) for financing costs, labour costs and additional bushfire safety, arguing that the AER had made errors in its decision.
AER Chair Paula Conboy said the Tribunal has upheld the AER’s decisions in relation to all grounds appealed by SAPN.
“The AER welcomes the Tribunal’s decision. The Tribunal found no errors in our decision on the amounts SAPN needs to run safe and reliable electricity services,” Ms Conboy said.
“We understand that electricity bills are a concern to many households and businesses in South Australia. Distribution charges make up about 38 per cent of the bill of SA Power Networks’ typical residential customers. Today’s decision will help provide some predictability and stability in distribution network prices over the next four years,” Ms Conboy said.
“The Tribunal recognised that our decisions involve weighing up a range of differing expert theories and opinions and that our role is to consider all relevant information and use our judgment to arrive at an answer that best meets the long term interests of consumers. The Tribunal found that we had not made any errors nor been unreasonable in our approach”.
“We are pleased to see the Tribunal considered the views of consumers in its decision,” Ms Conboy said.
Notes to Editors
The Tribunal’s decision will be available: http://www.competitiontribunal.gov.au/
Approved image of AER Chair, Paula Conboy: http://www.aer.gov.au/system/files/Paula%20Conboy%20Hi-Res%20image%20for%20reproduction.JPG
About the AER
The Australian Energy Regulator regulates energy markets and networks under national legislation and rules in eastern and southern Australia, as well as networks in the Northern Territory. Its functions include:
- monitoring wholesale electricity and gas markets to ensure energy businesses comply with the legislation and rules, and taking enforcement action where necessary;
- setting the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy;
- regulating retail energy markets in Queensland, New South Wales, South Australia, Tasmania (electricity only), and the ACT;
- operating the Energy Made Easy website, which provides a retail price comparator and other information for energy consumers;
- publishing information on energy markets, including the annual State of the energy market report, to assist participants and the wider community.