AER calls for consumer input on proposed network electricity charges in Tasmania

The transmission business in Tasmania, Transend (now part of TasNetworks) is proposing a decrease of around 18 per cent in electricity network revenues over the next five years. The decrease is contained in the revenue proposal recently submitted to the Australian Energy Regulator (AER). This proposal will be subjected to a public review over the next nine months.

Transmission charges make up more than 10 percent of a typical residential bill, but account for a greater part of a larger business’ electricity bills.

The AER is holding a public forum on the proposal for TasNetworks in Hobart on Wednesday 9 July 2014. Members of the public are welcome to attend the forum and ask questions of the business about the proposal. The AER’s Consumer Challenge Panel will also be attending the forum to put forward its perspectives on the proposals.

“This proposal has been submitted in a different financial and operating environment compared to five years ago, when network charges rose significantly. This new environment has seen significant reductions in both demand and in the financing costs faced by network businesses,” AER Chairman Andrew Reeves said.

“These developments will mean that network charges should fall and our assessment will consider whether TasNetworks has fully taken these changed circumstances into account in its proposal”.

Consumers could expect that the current proposal will reduce electricity prices in Tasmania. The AER is publicly consulting on the proposal and seeking comment from electricity consumers and other stakeholders.

“The new rules ensure that consumers have a say in these decisions. The network businesses are required to consult with consumers when they put forward their pricing proposals. The consumer interest is at the core of our regulatory decisions and we would like to hear whether consumers accept that this proposal is justified.” Mr Reeves said.

“We have also established a panel of experts that advise the AER on whether network proposals are in the long term interests of consumers.”

The Consumer Challenge Panel assists the AER to make better regulatory determinations by providing input on issues of importance to consumers. They include experts in consumer advocacy, economics and regulation.

The AER has released an issues paper which explains the issues that are likely to be relevant to the review and the likely impact on electricity bills. However, the AER is seeking and will consider any public submission on any aspects of the revenue proposal.

Submissions should be sent to the AER by 1 August 2014. A draft determination is expected to be published in late November 2014, and final determinations by 30 April 2015, with new prices to commence on 1 July 2015.

Media opportunity

Media are invited to a doorstop with AER chairman Andrew Reeves and a Consumer Challenge Panel member.

Time: 9.45am

Date: Wednesday, 9 July 2014

Location: Hotel Grand Chancellor Hobart
1 Davey Street
Hobart, Tasmania

Issued date: 
8 July 2014
AER reference: 
NR 013/14
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