The Australian Energy Regulator (AER) has approved tariff structure statements submitted by the Victorian energy distributors.
AER chair Paula Conboy said, from 2017, the move will assist consumers in making better choices about their electricity use.
“The new tariffs will provide a price signal to retailers about the cost of using the distribution network. This will allow retailers to design offers to best suit their customers’ needs,” she said.
Victorian distributors have designed tariffs that have lower prices at off-peak times and higher prices during times when the network is under the greatest pressure. The new tariffs will be offered on an opt-in basis and seek to influence consumer behaviour to reduce usage in peak summer periods. The structure recognises the increasing use of technologies such air-conditioners and rooftop solar, which means the pattern of electricity demand becomes subject to greater peaks and troughs.
“Changing the way consumers pay for the poles and wires that transmit their electricity allows consumers to make more informed decisions about their energy usage. This will help consumers make better choices for themselves individually, which ultimately benefits the entire system,” Ms Conboy said.
“In particular, reducing pressure on the networks reduces the need for new network investments and this will help defer costly network upgrades. The investment needed to meet peak demand has contributed to the electricity price increases experienced by Australian consumers in recent years.”
New demand-based tariffs will be offered for the first time from 2017, but residential and small business customers who don’t take these up will remain on their existing network tariffs. For large commercial and industrial customers there are no changes to existing tariff structures where demand-based charging already exists.