The Victorian DNSPs CitiPower, Jemena, Powercor, SP AusNet and United Energy are required to submit to the AER an annual pricing proposal in November which outlines proposed prices to take effect from 1 January 2010.
The annual approval of the Victorian DNSPs distribution tariffs (including a pass through of transmission tariffs) is a responsibility that has been transferred to the AER from the Essential Services Commission (ESCV).
The AER is required to approve each DNSPs pricing proposal for its distribution and transmission tariffs to apply in 2010 in accordance with the ESCV's 2006-2010 Electricity distribution price determination.
Movements in individual distribution tariffs are limited to CPI+2 per cent price increases. Changes to transmission tariffs are limited to a re-balancing constraint of CPI + Z + Y per cent. The Z factor is calculated as the average annual increase in transmission costs up to an 18 per cent cap; and the Y factor is equal to 2 per cent.
Clause 3.4.7 of the EDPR, however allows the constraint applying to transmission tariffs to be adjusted if the Regulator is satisfied that a DNSP will not be able to recover its expected transmission related costs.
CitiPower, Jemena, Powercor and United Energy have all made submissions to the AER to vary the constraint for 2010 transmission tariffs. The AER sought comment on these proposals by 6 November 2009. The AER received no comments on the proposed variation to the Y factor.
The AER's decision on the proposed variation to the Y factor is set out below, under Decision.
The Victorian distribution businesses are required by the Victorian Government to roll out AMI (smart meters) by 31 December 2013 to all residential and small business customers. Smart meters will allow electricity consumption to be recorded in half hour intervals.
Distributors will progressively introduce time of use (TOU) network tariffs over this period. For 2010, SP AusNet and United Energy Distribution have already introduced TOU tariffs. TOU tariffs can be applied once the smart meter is activated. The AER has permitted distribution businesses to re-assign customers to TOU tariffs in accordance with clause 2.1.21 and 2.1.22 of the EDPR 2006-10 and the AER’s final decision on tariff re-assignment.
TOU tariffs include peak, shoulder, and off peak rates. These tariffs provide customers with price incentives to use less electricity during peak periods and to move more of their consumption to off peak periods.
Customers should refer to the following pages of the distributors Annual Tariff Reports for further information on TOU tariffs.