AER approves Victorian electricity network charges for 2020, prices to rise

power prices

Victorians will see a small increase in electricity network charges in the coming 12 months with the Australian Energy Regulator (AER) approving the 2020 network tariffs for Victorian electricity distributors. These include AusNet ServicesCitiPowerJemenaPowercor and United Energy.

AER chair Clare Savage said this year’s price rises should be seen in the context of Victoria’s current regulatory determination, which has delivered savings or stable prices for Victorians.

“Our first principle is that consumers should pay no more than necessary for safe and reliable energy. Over the last five years, most Victorian consumers have paid less or around the same for the network of poles and wires delivering power to their houses and business,” Ms Savage said.

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Overall revenues for Victorian electricity distributors have decreased in the 2016-20 period:

  • AusNet by 7.04 per cent
  • Jemena by 2.12 per cent
  • Powercor by 3.79 per cent

Revenues for CitiPower (0.88 per cent) and United Energy (8.32 per cent) increased over the period.

Network charges cover the transmission and distribution costs of delivering electricity to households and businesses. These costs are increasing for each of the Victorian electricity distributors.

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The AER says increasing transmission charges in Victoria – representing up to 81 per cent of the price increase – have fed into these 2020 prices.

Some of the reasons for this are rising Victorian land taxes and more power travelling long distances from interstate, which increases costs, have contributed to the rise.

The AER estimates the typical network tariff charge – which is only one part of a household bill alongside wholesale costs, retail margins and other elements – will increase the average bill in 2020 by:

  • AusNet Services (Residential $38.16, Small business $130.02)
  • CitiPower (Residential $26.14, Small business $115.00)
  • Jemena (Residential $37.26, Small business $200.89)
  • Powercor (Residential $46.00, Small business $99.28)
  • United Energy (Residential $53.04, Small business $212.27)

The approved network tariffs take effect from January 1, 2020.