The Australian Energy Regulator has recently released its 2014-19 Revenue Determination for TasNetworks, showing Tasmanian transmission charges are likely to fall.
The AER’s decision fully accepts TasNetworks’ revised revenue proposal. As a result, customers directly-connected to the transmission network, including major industrial customers, will see reductions to transmission charges again in 2015-16, on top of the reductions already passed through this financial year.
The transmission revenue reductions also flow through to residential and business customers connected to the ‘poles and wires’ distribution network.
“TasNetworks was able to clearly demonstrate that it has listened to its customers and taken steps to lower power prices,” said AER board member, Jim Cox.
TasNetworks will soon lodge its annual pricing proposal for distribution customers with the AER.
The proposal sees 2015-16 network bills falling (on average) in real dollar terms. The transmission decision supports this outcome.
“This transmission decision is a ground-breaking and unprecedented result and an excellent outcome for all our customers,” said TasNetworks CEO, Lance Balcombe.
“It supports TasNetworks’ desired outcomes of lower, predictable and sustainable pricing for our customers.
“This determination shows we are a customer focused business. We will continue to set ourselves challenging targets and take practical steps to deliver lower prices for all Tasmanian electricity users.
“We have done this through prudent network investment and proposals to further drive efficiency into the future.”
TasNetworks’ transmission revenue proposal included significant reductions in capital expenditure, operating expenditure and the rate of return, and provided that TasNetworks would permanently forgo a $37million under-recovery of transmission charges.
In an Australian first, the AER’s November 2014 draft decision accepted TasNetworks’ proposal in all material respects.
TasNetworks’ revised proposal, lodged in January this year, accepted the AER’s draft decision. Currently, the AER has confirmed that TasNetworks’ revised proposal was efficient and in the long-term interests of Tasmanian customers.
This is the first time the AER has fully accepted a revised revenue proposal.