AER approves VIC networks 2019 tariff proposals

The AER has approved the 2019 tariff proposals from Victoria’s electricity networks – AusNet Services, CitiPower, Powercor, Jemena and United Energy.

AER Chair Paula Conboy said the new tariffs follow on from capped network revenues, set by the AER, for the 2016-2020 period.

“In 2016 the AER approved a reduction in revenue that networks could recover from customers. This was a reduction in the revenues proposed by the networks at the time, as well as a reduction in revenues from the previous regulatory period,” Ms Conboy said.

“However, at that time, we recognised that there would be modest increases in some years in order to ensure that consumers would continue to receive safe and reliable services.

“The AER makes regulatory decisions on network revenues that seek to ensure consumers pay no more than necessary for safe and reliable electricity, and much of this heavy lifting has been addressed through reduced revenue limits for this period.

“While lower revenues have been set, there are small tariff increases in 2019 to reflect capital investment to maintain service levels, and in some regions, to address bushfire risks.”

The estimated yearly impact on a typical residential customer (assuming full retailer pass through of the 2019 network tariffs) includes:

• Jemena: no impact
• United Energy: $11 increase
• Citipower: $14 increase
• Powercor: $16 increase
• AusNet Services: $30 increase

“Network costs have been falling steadily in recent years decreasing by between $54 and $182 for residential customers, and even larger reductions for small business customers,” Ms Conboy said.

“These tariff increases are the minimum required for the network businesses to continue to provide a safe and reliable service and to meet regulatory obligations.

“The AER acknowledges that affordability is a concern for Australian households and businesses. It’s important, more now than ever, for customers to understand what’s out in the market and shop around for the best deals.”

The new network tariffs will take effect from 1 January 2019.

Background

The AER conducts annual compliance checks to ensure that proposed network tariffs for each distributor for the upcoming year comply with the distribution determination price controls, approved tariff structure statements and other requirements of the National Electricity Rules. The AER’s distribution determinations set out the total revenue that distributors can recover from consumers to ensure they pay no more than necessary for a safe and reliable electricity supply.

The following is the estimated effect of approved network tariffs on residential customers in 2019 (assuming full retailer pass through):

The above table is based on an average retail bill of approximately $1,700 p. a. and average usage of approximately 4,600 kWh p. a.

In Victoria it is a requirement for households to have a smart meter.