AER approves network tariffs for Victorian electricity customers in 2017

The Australian Energy Regulator (AER) has approved the 2017 electricity network tariffs submitted by the five Victorian electricity distributors, AusNet Services, CitiPower, Powercor, Jemena Electricity Networks and United Energy.

The 2017 tariffs comply with the decisions the AER made in May 2016 that set out the amount the distributors’ can recover from consumers over 2016–20, and the decisions issued in August 2016 on the distributors’ 2017–20 tariff structure statements.

Table1 shows the reduction in network tariffs estimated over 2017, with the greatest benefits associated with a fall in smart meter tariffs across all distributors.

Business Typical residential network tariff changes, $ p.a. Typical residential smart meter tariff reduction, $ p.a. Retail tariff change, per cent and $ p.a.
Table 1 - Estimated impact of approved network tariffs on residential customers in 2017, assuming full retailer pass through
AusNet Services $6.50 -$7.86 -0.09 (-$1.50)
CitiPower -$10.09 -$9.53 -1.57 (-$21.58)
Powercor -$5.79 -$6.75 -0.89 (-$13.79)
Jemena -$1.49 -$45.46 -3.31 (-$51.64)
United Energy $7.76 -$30.66 -1.70 (-$25.19)

Notes: based on benchmark annual Victorian household consumption of 4905KWh.
Analysis performed on single rate peak only network tariff. Assumes full network tariff pass through, with wholesale and retail costs held constant.

AER Chair Paula Conboy said consistent with the AER’s revenue decisions, consumers will continue to see further reductions in the network tariffs and metering charges components of their bills in 2017.

From 1 January 2017, network businesses will make available new optional demand based tariffs for residential, small and medium business customers.

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

 “We encourage consumers to use the Victorian Government’s independent, price comparison site Victorian Energy Compare to find the best deal to suit their energy needs,” Ms Conboy said.  

“Shopping around can save money; consumers should take their time and feel confident before making a choice that is right for their energy needs”, Ms Conboy said.

Notes to Editor

  • The AER only 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 revenues for the upcoming year are no more than permitted under the price controls set by the AER for 2017.
  • The AER’s distribution determinations set out the total revenues that distributors can recover from consumers to ensure customers pay no more than necessary for safe and reliable electricity.
  • The tariff structure statements set out new tariff approaches that reflect the costs of different patterns of use.
  • The electricity distribution businesses’ poles and wires carry electricity from high voltage transmission lines to household and commercial customers’ premises. 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 help determine final bills that customers pay.
  • The tariff structure statements set out the tariff structures that will apply over the 2017 to 2020 period, including new demand based tariffs that are being made available on an optional basis to residential, small and medium business customers for the first time.
  • These new demand tariffs will offer customers lower network prices.

About the AER

The Australian Energy Regulator regulates energy markets and networks under national legislation and rules in eastern and southern Australia, as well as networks in the Northern Territory. Its functions include:

  • monitoring wholesale electricity and gas markets to ensure energy businesses comply with the legislation and rules, and taking enforcement action where necessary;
  • setting the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy;
  • publishing information on energy markets, including the annual State of the energy market report, to assist participants and the wider community.
Sector: 
Segment: 
Issued date: 
9 November 2016
AER reference: 
NR 27/16
Contact: 
AER Media enquiries 1300 138 917