AER approves 2018 network tariffs for Victorian electricity customers

The Australian Energy Regulator (AER) has approved the 2018 networks tariffs for the five Victorian electricity distributors – AusNet Services, CitiPower, Powercor, Jemena and United Energy.

The 2018 tariffs comply with decisions made by the AER in May 2016 setting out the amount the distributors’ can recover from consumers over 2016–20, and include the amended decisions on the distributors’ 2017–20 tariff structure statements approved in September 2017.

AER Chair Paula Conboy said there should be further reductions in the network tariff and metering charge components of customer bills in 2018, consistent with the AER’s revenue decisions. These reductions will help to offset other factors in the market which are placing upward pressure on retail prices, such as increases in the wholesale cost of generating electricity.

“At a time when energy affordability is a serious concern, it is more important than ever that consumers have the confidence that we are carefully examining all aspects of network costs.

“We understand that electricity bills are a concern to many households and businesses in Victoria. These tariffs will provide a price signal to retailers about the cost of using the electricity network. This will allow retailers to design retail offers to allow consumers choice in the offer that best suits their needs,” said Ms Conboy.

Table 1 – Estimated effect of approved network tariffs on residential customers in 2018 (assuming full retailer pass through)

Business

Typical residential network

tariff change ($ p.a.)

Typical residential smart meter

tariff change ($ p.a.)

Total impact
($ p.a.)
AusNet Services –$16 –$53 –$69
CitiPower –$0 –$13 –$13

Powercor

–$27 –$25 –$52
Jemena –$27 –$10 –$37
United Energy –$6 –$4 –$10

Notes: Estimates based on benchmark annual Victorian household consumption in each distribution area.

Notes to Editor

  • The AER regulates network tariffs but does not have a role in approving or assessing retail tariffs.
  • The AER conducts annual compliance checks to ensure that proposed network tariffs for each distributor for the upcoming year comply with the distribution determination price controls, approved tariff structure statements and other requirements of the National Electricity Rules.
  • The AER’s distribution determinations set out the total revenue that distributors can recover from consumers to ensure they pay no more than necessary for a safe and reliable electricity supply.
  • The tariff structure statements set out new tariff approaches that reflect the costs of different usage patterns.
  • The electricity distribution businesses’ poles and wires carry electricity from high-voltage transmission lines to households and commercial customers. In Victoria, approximately 20 to 40 per cent of a customer’s retail bill is related to regulated network tariffs. A range of other factors including actual electricity use, the retail plans customers choose, individual retail charges and wholesale costs, also determine final bills that customers pay.
  • The tariff structure statements set out the tariff structures that will apply over the 2017–20 period.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future. 

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We do not set the prices consumers pay.

We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.

Sector: 
Segment: 
Issued date: 
10 November 2017
AER reference: 
NR 34/17
Contact: 
AER Media 0466 409 921 media@aer.gov.au