On the road to cost reflective pricing Alternative formats available on request to PIAC - Contact PIAC
The development of the NSW networks tariff structure statements (TSS) has been a long and in-depth process. PIAC has been involved throughout the process, and has made a number of submissions that noted our concern about the declining block tariff and other aspects of the proposed statements.
PIAC generally supports the AER’s draft determination, which includes a range of recommendations that the three networks appear to have addressed in their revised proposals. PIAC remains concerned, however, that the networks have still not satisfactorily addressed the key issue of how they plan to balance residuals with long-run marginal cost.
While we acknowledge that there are a number of challenges in moving to more cost reflective tariff designs, PIAC would like to see more commitment from the networks to implement greater tariff design options in the next round. PIAC will work with the networks during the next two years to progress more cost reflective pricing. While progress has been made in the networks revised tariff statements, there is still a long way to go to effectively meet the cost-reflectivity objectives.