Cost reflective pricing to make tariffs fairer

The networks industry has backed the Australian Energy Regulator’s (AER’s) view that cost reflective pricing reforms can make electricity tariffs fairer for customers.

Responding to AER consultation on distribution network Tariff Structure Statements (TSS) in Queensland, South Australia, Tasmania and the Australian Capital Territory, the Energy Networks Association (ENA) endorsed the regulator’s view that “moving towards tariffs that take account of a customer’s use of electricity during peak times will make pricing for electricity fairer”.

ENA CEO John Bradley said implementing new network tariff structures was also important to improve Australia’s long-term energy productivity during a period of critical change.

“The tariff structures proposed by electricity networks were developed after extensive customer and stakeholder consultation,” Mr Bradley said.

“Customers who take up the new network pricing plans that are being offered will be rewarded for helping to reduce peak demand – a key driver of network investment.

“Customers would save money with simple changes like not using appliances all at once, and for other choices like participating in load control programs for pools and air-conditioning, smart orientation of solar panels, or new devices like battery storage.”

Through consultation with their customers, Mr Bradley said network businesses had tailored their approach to managing the transition to more cost-reflective prices.

“Network businesses are implementing changes in a measured and consultative way, considering the ability of customers to receive and respond to new pricing,” Mr Bradley said.

The ENA has recently released a draft Electricity Network Tariff Reform Handbookfor consultation highlighting international and local case studies in achieving fair and efficient pricing outcomes for customers.