SA Power Networks

In reply to the Hon. F. PANGALLO (16 May 2019).

The Hon. R.I. LUCAS (Treasurer): I have been advised the following:

On 15 May 2019, the Australian Energy Regulator (the regulator) approved SA Power Networks' 2019-20 pricing proposal. This follows an assessment by the regulator under the National Electricity Rules that the pricing proposal is consistent with the regulator's revenue determination for 2015-20 (approved in 2015) and the 2017-20 SA Power Networks' Tariff Structure Statement (approved in 2017).

For the distribution network costs, the regulator approved an increase of $46 for the average South Australian residential customer. However, the approved pricing proposal also includes pass-through increases for transmission costs and for solar PV feed-in tariff costs. These increase by $6 and $7 respectively for the average residential customer.

The drivers of the approved network prices include:

An increase in the allowed distribution revenue as per the 2015-20 revenue determination

An increase in revenue to address under-recovery of revenue in previous years, and

A forecast decline in electricity sales from 2018-19 to 2019-20 due to higher solar PV penetration and greater energy efficiency.

It should be noted that the network charges approved by the regulator's decision are not the total electricity bill for customers. South Australian electricity retailers incorporate the network tariff with the cost of wholesale electricity and retail costs. The regulator has indicated in their determination for the default market offer that these non-network components are forecast to go down in 2019-20, which would offset the network tariff increases.

The pricing proposal also outlines the three tariff trials that SA Power Networks is conducting in 2019-20:

An alternative agreed demand tariff for a small number of large business customers in the Riverland

A voluntary residential time-of-use trial to incentivise customers moving their energy usage to the middle of the day to use excess solar PV generation, and

An off-peak controlled load tariff for residential customers with smart meters.

Lastly, the regulator is currently considering SA Power Networks' revenue proposal for 2020-25. It is expected that a draft determination will be released in late September 2019 and a final determination in April 2020.

I am further advised that the member's claim that the Minister for Energy and Mining had conceded on radio that the government 'will not be able to meet their election promise' is not accurate.