Electricity Prices set to rise as energy regulator loses challenge
Author: The Australian Business Review Date Posted:29 February 2016
A move to ensure lower electricity bills has been defeated
Hoped for cuts to household power bills of up to $339 a year are under a cloud after the electricity networks won a review of rulings imposed by the Australian Electricity Regulator.
Transmission and distribution networks that account for up to half the cost of the average electricity bill were facing cuts of up to 30 per cent or $7 billion in revenue over the next four years under rulings by the AER a year ago. The cuts were expected to be worth between $131 and $339 a year off the cost of the average household bill.
The Australian Competition Tribunal upheld part of a challenge to the Australian Energy Regulator’s decision, sending it back to the AER for a redetermination.
In particular, it told the AER to rethink the method it had used to slash the electricity company capital expenditure, which has been heavily criticised for “gold plating” sending power prices higher.
The decision was a test of the AER aggressive push to lower electricity prices, which have ballooned in recent years on the back of big capital expenditure, all while demand for electricity has fallen.
