The Australian Energy Regulator (AER) has today approved the 2019–20 network tariffs as proposed by SA Power Networks (SAPN).
Network tariffs will rise by 10.2 per cent, ensuring that SAPN has sufficient revenue to provide safe and reliable network services in the 2019-20 financial year.
These network tariffs implement the last year of the AER’s 2015 decision that set the maximum revenue SAPN could recover from its customers over the 5 year period 2015-20.
In that decision the AER determined that SAPN was entitled to recover $3.8b from its customers to operate a safe and reliable network. This amount was about 10 per cent less than what the company was entitled to recover over the 2010-15 period and 15 per cent less than what SAPN had requested. Today’s decision on SAPN’s 2019-20 network tariffs will result in no increase in overall revenue for SAPN for 2015-20.
Today’s decision does not impact the DMO prices the AER set last month for customers on standing offers in South Australia.
Network tariffs are one component that make up a retail bill. Other retail bill components are forecast to go down over the year starting from 1 July 2019, essentially offsetting the increase in network tariffs. Therefore the AER would expect retailers to take this into account when developing their market offers going forward.
Notwithstanding this, the AER acknowledges that affordability continues to be a concern for South 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 using our independent EnergyMadeEasy website.
The approved network tariffs will take effect from 1 July 2019.
The AER approves tariffs which are the cost network cost component of a retail bill.
Retailers use networks tariffs to develop their market offers.
Retailers cannot pass the network tariffs on to consumers on standing offers as these are set through the Default Market Offer (DMO) that comes into force on July 1 2019. Standing offers will remain as set in the DMO
Network tariffs is one component that can impact a bill. Other components include distribution, transmission, wholesale and retail.