PIAC recently made a submission to the Australian Energy Regulator’s revenue determination for the three NSW electricity distribution networks (Ausgrid, Essential Energy and Endeavour Energy).
These networks transport electricity around the state to households and businesses, and in NSW, the costs they charge make up around 50% of household electricity bills.
The distribution companies are proposing that the costs of building and maintaining poles and wires and financing these works in 2014 should be two to three times what they were in 2004. Continued high levels of revenue proposed by the networks mean continued high prices and an increasing financial burden, especially for low-income consumers.
PIAC is not convinced that network revenue needs to continue to be so high and is very concerned about many of the assumptions made in the proposals.
PIAC scrutinised the network’s spending proposals in terms of the proposed capital expenditure, operating expenditure, borrowing costs, consumer engagement and demand management. The resulting submission is more than 100 pages long and is available here.