AER issues draft determination on SA Power Networks’ 2020-2025 revenue

The Australian Energy Regulator (AER) today issued its draft determination on how much revenue SA Power Networks can recover from consumers over the 2020-25 regulatory period.

AER Acting Chair Jim Cox welcomed the engagement that SA Power Networks has had with its consumers, but says more consumer engagement needs to be had as part of the revised proposal.

“Our concern is to ensure that consumers pay no more than necessary for a safe and reliable electricity supply and that projects are delivered as efficiently as possible.

“We have asked SA Power Networks to engage further with consumers on their concerns and provide us with more information to justify its expenditure proposals.”

AER’s draft decision allows SA Power Networks to recover $3 905.3 million from its customers for the 2020-2025 period.

This is $309.2 million less than the $4 214.5 million SA Power Networks proposed.

If this decision is implemented, SA Power Networks customers will see the following reductions in network distribution charges in 2020:

  • $63 a year (residential)
  • $283 a year (small business)

Network charges will only increase in line with inflation over the next five years. In 2025 network charges will still be $20 (residential) and $90 (small business) below the 2019 level.

Mr. Cox said the draft decision recognises that the way South Australians engage with electricity is changing and that networks like SA Power Networks have to adjust their business accordingly.

“The future impact of electric vehicles and electric storage are uncertain but increasing levels of solar photo-voltaic installations are causing voltage issues in the low voltage network (LV) network.

“This draft decision approves $34.1 million for SAPN to develop a new LV management program. This program will allow the use of new technologies and will use data to manage the energy flows and optimize generation across the network.   

SA Power Networks have also developed new tariffs that will alleviate voltage problems by increasing demand in the middle of the day,” said Mr. Cox.

SA Power Networks now has the opportunity to consider the draft decision and submit its revised proposal and supporting material in December 2019.

The AER will make its final determination by 30 April 2020.

About the AER

The 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 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.

Issued date: 
8 October 2019
AER reference: 
NR 22/19
AER Media 0466 409 921