AER approves new network tariffs for Victorian electricity customers from 1 January 2021

The Australian Energy Regulator (AER) has approved the electricity network tariffs proposed by AusNet Services, CitiPower, Jemena, Powercor, and United Energy for the six month period of 1 January to 30 June 2021.

These tariffs comply with the requirements of each distributor’s determination. The determinations set revenues these distributors can recover from customers for the cost of delivering electricity supply.

For the first six months of 2021, when compared to the charges for half of 2020, the network component of the typical bill will drop by:

  • $24.26 for households and $110.38 for small businesses on the AusNet Services network
  • $19.68 for households and $90.77 for small businesses on the CitiPower network
  • $29.05 for households and $158.30 for small businesses on the Jemena network
  • $34.60 for households and $18.18 for small businesses on the Powercorbamcisco network
  • $41.13 for households and $140.35 for small businesses on the United Energy network.

These changes will come into effect from 1 January 2021.

Drivers of these price movements vary by network, but mostly reflect the lower revenue allowances for distribution charges set by the AER as part of the related determination for the 1 January to 30 June 2021 six-month period.

The average residential energy bill consists of several cost components including retail, wholesale, network and environmental costs. This decision relates to the network cost component only. In Victoria, network costs make up around 38% of residential retail bills. It is important to note that retailers may repackage tariffs, and that different movements may be observed in other components of the retail bill, and therefore these estimated movements may not actually be realised by retail consumers.

For further information, see the Statement of Reasons published alongside each approved pricing proposal.

The AER acknowledges that energy bills are a concern to many households and businesses at this time. The AER’s Statement of Expectations of energy businesses outlines how we are working with industry to support customers.

Background

In April 2019, we were advised by the Victorian Minister for Energy, Environment and Climate Change of the intention to make changes to the timing of the Victorian electricity and gas network price resets to operate on a financial year basis. This would allow network and retail price changes to take effect on 1 July and to bring Victoria into alignment with other National Electricity Market jurisdictions.

On 27 October 2020 the National Energy Legislation Amendment Act 2020 (Vic) (NELA Act) came into effect. The NELA Act amends the National Electricity (Victoria) Act 2005 (NEVA) to extend the current regulatory control period (1 January 2016 – 31 December 2020) by six months.

On 28 October 2020, we released our determinations in relation to this six-month extension period.

Looking forward, we expect to release our final determination for the next regulatory control period – from 1 July 2021 to 30 June 2026 – in April 2021. The distributors will submit separate pricing proposals for the period 1 July 2021 to 30 June 2022, and for each year thereafter.

Sector: 
Segment: 
Issued date: 
16 November 2020
AER reference: 
AC 151/20
Contact: 
AER Media 0466 409 921 media@aer.gov.au