AER - Australian Energy Regulator

07/01/2020 | News release | Distributed by Public on 07/01/2020 00:07

AER approves Ergon Energy 2020-21 electricity distribution tariffs

The AER has approved Ergon Energy's 2020-21 electricity distribution tariffs in accordance with its 2020-25 revenue determination.

These tariffs will come into effect from 1 July 2020 and see the network component $13 higher for regional Queensland residential tariffs and $45 lower for small business.

While our recent regulatory determination led to reductions in distribution charges, these have been offset by increases in jurisdictional scheme costs. The AER is required to ensure that distributors only recover from customers the amounts they are entitled to under jurisdictional schemes. The AER is not responsible for setting the parameters of jurisdictional schemes.

Electricity bills are made up of a number of components including the wholesale cost, retail margins and network charges. This decision relates to the network charges component of the bill. As other costs may be moving in different directions, changes in retail bills may differ from the estimates provided. In addition, we note that the Queensland Competition Authority (QCA) sets regulated prices for regional Queensland retail customers.

The AER acknowledges that energy bills are a concern for many households and businesses at this time. As part of our Statement of Expectations for energy businesses during the COVID-19 pandemic we have provided advice for people impacted by the pandemic.

We encourage consumers to use the AER's EnergyMadeEasy website, our free and independent price comparison tool, to find the best deal to suit their energy needs.

The AER sets the amount of revenue Ergon Energy can recover from its customers over five years. Each year the AER checks that Ergon Energy's annual tariffs comply with its five-year revenue amount. This information is used by retailers in developing bills for their customers, in particular the network component of the bill.

In June, the AER approved Ergon Energy's 2020-25 network revenue determination. The determination allows Ergon Energy to recover $5,925.9 million from its customers in 2020-25. The estimated price declines resulting from this revenue decision excluded amounts that could be passed on to customers under the Queensland Government's Solar Bonus Scheme. This is because the solar bonus scheme is outside our revenue determination.

For an explanation of the reasons for our decision and additional background information, please see the Statement of Reasons.