The Australian Energy Regulator (AER) has today published its final decision on the revenue proposal submitted by electricity network business SA Power Networks for the 2025–30 regulatory period.
Electricity distribution network businesses are required to submit revenue proposals to the AER every five years outlining how much they intend to recover from consumers to provide safe, reliable and secure electricity services that meet consumer needs.
AER Chair Ms Clare Savage said the final decision seeks to balance affordability and efficient and prudent investment to maintain an ageing network, support the changing nature of the energy system and meet the long-term needs of consumers.
“Cost-of-living pressures and affordability concerns continue to be front of mind for households and small businesses.
“South Australia is also at the forefront of greater reliance on renewable energy, including household solar adoption.
“We have rigorously scrutinised SA Power Networks’ proposed expenditures to ensure consumers pay no more than necessary for safe and reliable energy, while enabling the business to address important emerging issues such as network cybersecurity, climate resilience, and integration of consumer energy resources,” Ms Savage said.
The decision come after an extensive regulatory process including consultation and submissions following draft decisions released in September 2024.
The final decision for SA Power Networks allows for $5,207 million in revenue to be recovered from consumers over the five years from 1 July 2025.
“The final decision accepts substantial parts of the initial and revised proposals. However, there are areas – particularly for augmentation expenditure – where we did not accept the forecast and substituted our alternative forecast. This included adopting lower demand forecasts that are more up to date, which has reduced demand driven capital expenditure,” Ms Savage said.
The increase in allowed revenue for the next regulatory period is significantly impacted by higher inflation and higher interest rates, accounting for 46% of the total change in revenue compared with the current period (2020–25).
SA Power Networks’ allowed revenue is $1,299 million (or 33.2%) more than allowed revenue in the 2020–25 period in nominal terms.
The estimated impact of the final decision is a total nominal increase to the typical residential customer’s electricity bill in South Australia on average of around $9 a year over 2025–30. For small business customers, the impact will be an increase on average of $22 a year. We were asked to also report the impact for residential customers without rooftop solar and/or with higher usage, this is an estimated increase on average of $14 a year.
“We have taken into account the ending of South Australia's solar feed-in tariff scheme in 2028. This will provide for more stability and means consumers will benefit from lower increases in network revenue in the initial years of the next regulatory period,” Ms Savage said.
The decision highlighted the value and importance of consultation and engagement with consumers by network businesses to balance service levels and prioritise areas of expenditure.
“SA Power Networks demonstrated strong commitment to engaging with their customers, including through working with their Community Advisory Forum to make sure consumer preferences were taken into account in the revenue proposal,” Ms Savage said.
Ms Savage said that this was reflected in SA Power Networks’ refinement of its innovation fund and the further development of solar soak tariffs and two-way pricing that are able to be packaged by retailers to reward those consumers that are willing and able to shift more of their use into periods of lower electricity prices during the day.
“We expect these tariffs will contribute to improving the utilisation of network assets over time reducing future network costs,” Ms Savage said.