ECC NSW advocating for fairer household electricity costs

by Esther Lozano - Wednesday, 23 March 2016

 In 2005, the Australian Energy Regulator (AER) determined the revenue allowed to the electricity network distribution businesses in NSW and ACT for the next 5 year regulatory period.

The AER determinations could have resulted in reductions in revenue of 28 – 33%. Given that distribution business charges make up about 40 – 50% of the cost of retail electricity bills, this reduction would have resulted in a reduction of approximately $100 - $300 in average yearly household electricity bills.

Both the distribution networks and the Public Interest Advocacy Centre (PIAC) appealed the determination in the Australian Competition Tribunal.

The networks were seeking to increase their revenue for the next 5 year regulatory period and PIAC were asking for the revenue to be decreased. If the PIAC appeal was upheld, bills would have seen a further considerable decrease. Over 1 million pages of evidence and submissions were presented to the Tribunal to consider.

The ECC NSW Energy Advocate attended the hearings and presented verbal and written submissions to the Tribunal in support of a reduction in the revenue determinations. The recent decision by the Tribunal (several hundred pages long) sent a considerable portion of the determination back to the regulator for review, and casts considerable doubt on whether price decreases will be available for NSW electricity consumers in the immediate future, if at all.

There is an opportunity for the parties to appeal the decisions and if this path is taken we may be in for a long wait on pricing decisions. This long drawn out process will most likely result in increased prices for consumers until the issues are resolved.

The South Australian Council of Social Service (SACOSS) and PIAC have undertaken a similar appeal for the South Australian revenue determination from last year and these hearings are set down for June 2016.

The ECC NSW Energy Advocate will again be supporting SACOSS and PIAC in these proceedings. All of these proceedings will probably delay the release of the Victorian revenue determinations, which were due in April 2016, until the revenue issues are resolved.