Energex listens to consumer concerns in AER decision

Consumers in South East Queensland have had their voices heard in the Australian Energy Regulator’s (AER) final decision for Energex’s 2020-25 regulatory period.

AER Deputy Chair Jim Cox said that a thorough and genuine process of consumer engagement helped to shape a decision that supports both networks and the community.

“We know that affordability is a major issue for Energex’s consumers. This decision balances those consumer concerns about affordability with the need for investment in the network.

“We are pleased that Energex demonstrated its commitment to listening to those who pay the bills through its extensive engagement program, giving consumer groups the opportunity to influence its proposals,” Mr Cox said.

The AER’s decision allows Energex $6009.6 million in revenue over the 2020–25 regulatory control period.

Energex network charges make up about 35 per cent of a standard residential retail bill and 28 per cent for small businesses.

As a result of this decision network charges for residential consumers will drop by $73 (4.6 per cent) in the first year and then rise on average by $3 year (0.2 per cent) for the remaining four years.

For small business consumers, network charges will drop by $82 (3.7 per cent) in the first year and then rise on average by $3 a year (0.1 per cent) for the remaining four years.

This excludes the amount that may be passed on to customers under the Queensland Government’s Solar Bonus scheme. The solar bonus scheme is outside our decision but will be included in the network’s annual pricing proposal.

Mr Cox said that the decision also allows Energex to upgrade its low voltage network but that the business should be considering distributed energy resources as part of its future planning to support system integration and better outcomes for consumers.

“The decision allows Energex to invest in a management platform which will allow consumers to export energy to the grid without increasing voltage problems in the network,” he said.

“But Energex needs to integrate this investment with new tariffs that further encourage consumers to make the most of the technology. Pricing and these new technologies must, and will, evolve alongside each other.”

Notes to editors

The AER delayed its final decision which was originally scheduled for 30 April 2020. This was to incorporate the Reserve Bank of Australia’s (RBA) short term inflation forecasts released on 8 May 2020.

  • The AER has considered the RBA’s short term inflation and will adopt the trimmed mean inflation forecasts for the first two years of our 2020-25 determination. We consider that the use of the trimmed mean contributes to the best estimate of inflation over a ten year period.
  • Our future approach to inflation will be considered through our inflation approach review.

The AER recognises the delay in releasing this determination will impact on the first annual pricing proposals for this business. This may affect some retailers who wish to release revised prices by 1 July 2020.

The AER acknowledges COVID-19 is having an impact on consumers and the energy market. We are factoring this into our decisions through our approach to inflation. We have also acted through our Statement of Expectations, market monitoring and consideration of proposed rule changes.

The AER will continue to monitor the impact over the coming months to inform how we can deliver the best outcomes for households, businesses and industry.

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 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: 
5 June 2020
AER reference: 
NR 19/20
AER Media 0466 409 921 media@aer.gov.au