Network tariff reform important for energy consumers

Network tariff reform is a key to making energy markets work better for energy consumers, Australian Energy Regulator Chair Paula Conboy said today at a CEDA event in Sydney.

In her speech, Ms Conboy discussed recent reforms that make network pricing more cost reflective and change the process for setting network prices.

“Cost reflective network prices allow consumers to compare the value they place on using the network with the costs of using it.”

If consumers choose to use electricity in ways that reduce network costs, for example by using less power at peak times when the network usage is at its highest, they will be rewarded through lower electricity costs in their retail bills.”

“In the long term, reductions in peak demand result in lower overall network expenditure, with benefits passed through to all consumers.”

“The new process and new timeframes for setting network prices improve certainty, timeliness and transparency for consumers and retailers. This helps support an environment where consumer choices drive outcomes in the market.”

Ms Conboy also highlighted the role that electricity distribution businesses would need to play in driving this reform.

“Businesses need to manage the transition to more cost reflective network prices. This will require businesses to effectively engage with customers and retailers, consider the impacts of their tariffs on customers and set network prices that customers can understand.”

Ms Conboy discussed recent AER initiatives to promote consumer engagement in energy markets.

“Building consumer confidence to engage with energy markets is a key priority for the AER. Our energy price comparison website, Energy Made Easy helps customers find the best energy offers for their needs.”

Read Ms Conboy's speech.

Conference: 
The Committee for Economic Development of Australia (CEDA)
Sector: 
Issued date: 
2 July 2015
AER reference: 
AS 002/15