AER proposes stable transmission charges in Victoria

The Australian Energy Regulator (AER) has issued its draft decision on the 2017-22 revenue proposal for AusNet Services’ Victorian electricity transmission network.

The draft decision is to approve revenue of $2695 million throughout the five years from 2017-22 – a 14.7 per cent reduction compared to the $3160.5 million proposed by AusNet Services.

Transmission charges typically make up around 5 per cent of an average Victorian household’s electricity bill. The AER does not regulate generation or retail costs or approve retail prices.

AER chair Paula Conboy said she understands electricity bills are a concern for many consumers, which is why the AER has undertaken a thorough review of the businesses’ proposals to ensure consumers are paying no more than necessary for electricity and gas.

“Our process also involves reaching out to consumers to understand their views,” Ms Conboy said.

“If implemented, our draft decision will result in transmission charges in Victoria remaining stable for households over the next five years. This follows on from our recent final decisions on distribution network charges in Victoria which provided for reductions in those charges over the next four years”.

“In part, our draft decision reflects the current investment environment with low interest rates compared to previous years. This translates to lower financing costs necessary to attract efficient investment. We have also applied a lower corporate tax allowance, consistent with our rate of return guideline.

“We have considered the views of stakeholders and the AER’s Consumer Challenge Panel (CCP) in forming our draft decision. The CCP assists the AER to make better regulatory determinations by providing input on issues of importance to consumers.”