AER commences consultation on guidelines to regulate two-way tariff pricing

The Australian Energy Regulator (AER) has commenced consultation on developing Export Tariff Guidelines. The Australian Energy Market Commission (AEMC) recently released its Access, pricing and incentive arrangements for distributed energy resources rule change, which aims to get more small-scale solar into the grid and support the growth of batteries and electric vehicles. This includes the ability for network energy businesses to propose two way tariff pricing.

The rule change introduces important customer benefits and protections including:

• homes with rooftop solar may send excess energy to the grid without additional charge (the basic export level)
• homes with rooftop solar may not be assigned to an export tariff until 2025 at the earliest.

The AER is also required to assess all tariff pricing proposals and only provides approval to those that are in the best interest of customers. Under the rule change the AER is required to develop Export Tariff Guidelines to outline how network energy businesses will need to justify export tariff proposals submitted to the AER for assessment. The Export Tariff Guidelines will also guide how networks should define the basic export level service for customers who export to the grid.

The AER has released a consultation paper seeking feedback on issues being considered as it develops the Export Tariff Guidelines, such as:

• how networks should engage with their customers and other stakeholders on the export of energy
• how the impact on customers of any two way pricing proposals has been considered
• evidence that export tariffs are justified to avoid or minimise future network investment and to fairly recover the cost of any investment that must occur.

Feedback from the consultation paper will be used to inform draft Export Tariff Guidelines that will be released for further consultation. The final Guidelines are expected to be published in May 2022. The AEMC's rule change and the AER's final Guidelines will come into effect from 1 July 2025 for existing customers.

The AER will continue its ongoing role in regulating and approving tariffs that are in the best interest of customers. The AER is required to approve proposed tariffs from network energy businesses every five years through the revenue determination process.

The AER welcomes feedback on the consultation paper by 4 November 2021. Registrations for an online public forum on 5 October 2021 are also open.

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