AER decisions deliver efficient costs for NSW electricity distributors

Improved operational efficiencies at three New South Wales electricity distribution companies will result in stable network costs for consumers after the Australian Energy Regulator (AER) released its final determination for Ausgrid, Endeavour Energy and Essential Energy for the 2019-24 regulatory period.

AER board member Jim Cox said the key focus of the determinations is ensuring that consumers pay no more than is necessary for safe and reliable electricity.

“Charges for electricity network services will remain largely stable over the next five years as networks are required to become more efficient and focused on what their customers are willing to pay for.

“Today’s decisions continue the downward momentum since network charges peaked in 2012. Since then, AER regulated network costs have fallen as businesses have become more efficient and responsive to their customers,” Mr. Cox said

The decisions allow the companies to recover the following from consumers over the 1 July 2019 to 30 June 2024 regulatory period:

  • Ausgrid - $7703.3 million
  • Endeavour Energy - $4201.2 million
  • Essential - $5079.3 million

The network tariffs set under this determination make up about one third of the average electricity bill in NSW.

As a result of these decisions, the AER estimates that, compared to the end of the current regulatory period, by the end of the 2019-24 regulatory period the average annual electricity bill will be (assuming non-network components of the electricity bill stay the same):

  • $67 less for a residential customer and $156 less for a small business customer on Ausgrid’s network (or 3.3 per cent less in both cases);
  • $24 less for a residential customer and $44 less for a small business customer on Endeavour’s network (or 1.3 per cent less in both cases);
  • $24 more for a residential customer and $111 more for a small business customer on Essential’s network (or 1.2 per cent more in both cases).

Mr. Cox said that the decision came after significant public consultation with the distribution businesses, stakeholders and consumers.

“This decision provides sufficient revenue to enable the NSW distributors to operate their networks reliably and safely. It takes account of the requirement to invest in the networks to cater for the increasing use of renewable energy.”

“Consumers will be paying for network investments such as these for decades to come, and it is our role to ensure they pay no more than they need for these services,” Mr. Cox said.

Issued date: 
30 April 2019
AER reference: 
NR 09/19
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