Power price dip flagged by regulator

TASMANIAN households and small businesses will pay lower electricity network charges from July after a decision by the Australian Energy Regulator. But wholesale power prices remain a concern.

The regulator yesterday said electricity network costs would fall by about 21 per cent from July 1, offsetting the impact of rising wholesale electricity costs.

Australian Energy Regulator board member Jim Cox said distribution costs accounted for about 41 per cent of an average household bill.

TasNetworks chief executive Lance Balcombe said the state-owned distribution company would pass the savings on via its charges to retailers such as Aurora Energy.

The regulator said the decision would result in an estimated saving of $133 for households and $223 for small businesses in the first year — “all things being equal”.

“Our customers told us they wanted us to maintain existing levels of reliability without having to pay more,” Mr Balcombe said.

“We proposed a significant reduction in revenue to reflect efficiencies and cost savings that TasNetworks has achieved as a merged business and reflected changes in financial markets.”

Energy Minister Matthew Groom welcomed the regulator’s decision, but said wholesale costs, influenced by the national electricity market, “continue to be of significant concern”.

Mr Groom said the State Government was working with the state’s energy businesses “to make sure that Tasmanians aren’t exposed to the issues affecting the national market”.

The Australian Energy Regulator also approved TasNetworks’ proposal to introduce demand-based pricing for residential and small business companies.

The change is a move away from the current emphasis on consumption-based pricing, and TasNetworks said it would encourage customers to reduce their electricity use during times of high demand.

The new demand-based pricing will be available next financial year and the following financial year for residential and small business customers who choose it, provided their electricity retailer offers the new tariffs.