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Stability for South Australian customers in ElectraNet decision: AER

South Australian electricity customers can expect stable network transmission costs over the next five years after the Australian Energy Regulator today released its final decision on the amount of revenue ElectraNet can recover from consumers.

The AER’s decision allows ElectraNet to recover $1603.2 million over the 2018-23 regulatory period, a reduction of 7.8 per cent ($135 million) on ElectraNet’s original proposal.

Transmission charges make up approximately seven per cent of household electricity bills for the typical residential customer in South Australia and the AER decision keeps this element of household bills stable.

AER board member Jim Cox said the AER accepted most aspects of ElectraNet’s proposal, and welcomed the company’s engagement with its customers during the determination process.

“Affordability is a concern for households and businesses, and customers need to be confident that they are paying no more than needed for safe and reliable electricity.

“We assessed ElectraNet’s original proposal as reasonable and this final decision bears out the value of the extensive consultation it undertook with its customers,” Mr Cox said.

The key differences between ElectraNet’s original proposal and the AER’s final determination revolve around technical financial matters where the AER applies a consistent approach across all network decisions: the rate of inflation and the value of imputation costs.

This determination is ElectraNet’s first since the “black system” event in South Australia on 28 September 2016 which resulted in a state-wide loss of electricity.

ElectraNet proposed an increase in capital expenditure (13 per cent) in response to the black system event to improve the security of the transmission network and increase its resilience to extreme weather events, which the AER accepted.

ElectraNet has also identified a number of reviews and contingent projects that may require further expenditure to address current power system security and reliability issues. These may be required during the 2018-23 period and will be considered when the need has been clearly demonstrated and additional information provided.

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