Ergon Energy is stepping up efforts to ensure customers have their say as it prepares its expenditure proposal for the Australian Energy Regulator (AER) for its next five year regulatory period from 2015 to 2020.
Chief Executive Ian McLeod said “Over recent months we have ramped up our customer and community engagement program, undertaking research into the value different customer segments place on reliability of supply and other service elements.
“We’ve been talking to the various peak bodies that represent our customer base, largely through our Customer Council, and meeting with as many of our regional stakeholders as we can.
“And we’re also giving individuals the opportunity to have their say through an online survey. This opportunity is open to the end of January at www.ergon.com.au/futureinvestment.
People can also register their interest to be kept informed.
“The next step is to start taking the different elements of our future direction that have been informed by the feedback to date – from our position on regional Queensland’s electricity reliability standards to our approach to meeting the changing needs of our customers – out to as many of our customers and interest groups as possible for further feedback.”
The AER is seeking a broader, more coordinated approach to incorporating customers’ concerns into the capital and operational expenditure forecasts of electricity companies in the Australian energy market.
“This fits well with our ‘customer-driven’ focus – we want to provide our customers and the communities they live in the opportunity to express their views and concerns and give them a chance to influence the decisions we make that impact their lives,” Mr McLeod said.
“A lot has been said about the impact our costs have on electricity prices, so it’s important our customers understand what we’re doing about it and have a chance to have their say.
“For the last six months we’ve also been specifically seeking customer input on the way our network tariff prices are structured and charged to help us provide our customers with better time-of- use pricing signals, more choice and control.
“Most of our current tariffs are not set up to encourage energy use at the right time – they don’t reward customers with the right price for shifting their usage.
“We need fundamental change to bring our customers’ needs and Ergon’s into alignment and to unlock the economic value of the network for all, improving its utilisation and lowering the price of the services we offer.”
Mr McLeod said it was expected that a number of the network tariff changes being proposed could be in place for the 2014/15 financial year, with further tariff reform to be implemented over the 2015-2020 period.
“In the last thirty years or so the way we use electricity in the home and in business and industry has changed, so it makes sense to review these to better reflect the needs of Queenslanders.
“If we can encourage our customers to move more discretionary electricity use in to non-peak times or store energy on off peak times to utilise later at peak, then we can improve the efficiency of the existing network and reduce the need to spend significant amounts of money upgrading it.
This reduces our revenue requirements and therefore eases the upward pressures on price ’, Mr McLeod said.
The final outcomes of the network tariff reforms, Mr McLeod explained will therefore have an impact on Ergon Energy’s final regulatory proposal.
About the proposal
To ensure Ergon Energy manages the distribution network efficiently, the organisation is regulated by the Australian Energy Regulator (AER).
The AER sets the revenue Ergon Energy is allowed to collect for the use of the network. These charges represent around half of the retail price of electricity.
Ergon Energy is currently preparing its regulatory expenditure proposal for 2015 to 2020 for submission to the AER in October 2014.