Tasmanian households will pay less for electricity because transmission company TasNetworks has identified millions of dollars worth of savings.
The Australian Energy Regulator (AER) approved TasNetworks’ plans to raise $731 million across four years. It is estimated the average household electricity bill will drop by $10 in the 2015-16 financial year, off the back of a $48 drop this financial year.
As a business, CEO Lance Balcombe said TasNetworks is already making progress to reduce electricity prices. “This has been demonstrated recently with the AER accepting our proposal for transmission revenue. The proposal included significant reductions in capital expenditure, operating expenditure and the rate of return,” he said.
TasNetworks was formed in 2014 as part of a major restructure of the state’s energy sector, taking the electricity distribution business from Tasmania’s only electricity retailer, Aurora Energy, and merging it with transmission company Transend.
The business has already saved about $8 million through efficiencies connected with the merger.
TasNetworks applied for the energy regulator to determine a pricing structure for its forward estimates across four years. The revenue the transmission company can raise flows on to influence prices charged by Aurora.
The regulator’s Jim Cox said transmission costs made up about 15 per cent of household and business energy bills in Tasmania.
“They volunteered reductions in costs because they thought they could become more efficient,” he said, as reported by ABC News.
“Prices for residential customers will fall about $10 a year and prices for small business customers will fall about $16 a year. Prices will also fall for TasNetwork’s light industrial customers who are important users of its services.”
In the 12 months to June 2014, the state’s energy prices fell almost 4 per cent. In the same period the number of Tasmanians seeking help to pay their power bills doubled.