New tariffs protect South Australian solar users

The Australian Energy Regulator (AER) has released its draft decision on SA Power Networks tariff structure statement, and it’s good news for solar customers and businesses.

New tariffs for electricity networks that will take effect in 2017 will assist consumers in making better choices about their electricity use.

Using the new tariffs, electricity retailers will be able to design offers for customers that support how they want to use electricity, whether that’s encompassing air-conditioners or solar panels, battery charging stations and electric vehicles.

AER board member Jim Cox said the move should make it clear to consumers how they can save money by changing their energy usage patterns.

“These tariffs incorporate different charges, which reflect the network’s peak demand periods, which predominantly occur during hot summers. Through lower prices at off peak times and higher prices during peak periods, these new tariffs will give customers more control over their electricity bills,” he said.

South Australia has one of the peakiest distribution networks in the world. If customers move usage from peak summer periods when the network faces its highest demand pressure, there will be less need for new network investments and this will defer costly network upgrades. The investment needed to meet peak demand has contributed to the electricity price increases experienced by Australian consumers in recent years, according to the AER.

In its draft decision, the regulator supports most of SA Power Networks proposed initiatives to reform its network tariffs. However, the AER found SA Power Networks must address its customer assignment policies before the proposed tariff structures can be approved.

Distribution charges make up about 38 per cent of a customer’s final bill in South Australia. It will be up to retailers to decide if and how they pass on the network tariff structures and price signals to users.

For large commercial and industrial customers there are relatively few changes from their existing network billing arrangements where demand-based charging already exists.

The clean energy industry has welcomed the news.

“If the SA Power Networks proposal was successful, it would send a message that no matter what action people take to reduce their bills, they’ll get stung another way. Effectively ‘you’re damned if you do and you’re damned if you don’t’,” Clean Energy Council (CEC) policy manager Darren Gladman said.

“If this push was successful, it would have opened the door for similar, and possibly much larger, charges by operators in other states. We believed the proposal was unfair and campaigned strongly against it. We are pleased the AER agreed with our position.”

Mr Gladman said the CEC will continue to work with SA Power Networks to support better ways of introducing demand-based tariffs that don’t discriminate against owners of solar, storage or smart meters.

“More than 1.5 million homes across the country have now installed solar power. This is a huge political constituency, and they won’t stand for being treated like mugs,” he said.

“Just about everyone is concerned about the cost of power right now. We should not be penalising people who want to go solar just because they aren’t paying as much to the operators of the power networks as they used to.”