NSW could see electricity price rise due to higher operating costs

Residents of NSW and ACT could see higher electricity bills in the coming year thanks to the Australian Competition Tribunal overturning the Australian Energy Regulator’s (AER) decision to slash the greater costs charged by energy networks.

Last year in April, the AER said that electricity network operators in NSW had overestimated their requisite expenditure, and had then imposed cuts of up to 30 per cent against the costs that network companies can charge for supplying power. These extra costs would added between $113 and $339 a year to the average power bill, reported The Australian.

Subsequently, electricity and gas network companies Endeavour Energy, Essential Energy and Ausgrid challenged the decision, claiming that their operating costs were much higher than what the regulator had calculated.

On Friday The Australian Competition Tribunal upheld part of a challenge to the AER’s decision, sending it back to the regulator for a review.

What this means for households is that the AER might have to reverse some of the cuts, and allow the networks to make up lost revenue which would result in a potential price hike.

In a statement, AER Chair Paula Conboy said that The Tribunal found it was correct to conclude that distribution businesses for ACT and NSW electricity  were not operating as efficiently as other networks and that consumers were paying more than necessary for safe and reliable electricity and gas.

“The AER’s aim continues to be setting network revenues in the long term interests of consumers as required under the National Electricity Law. We are now looking at the Tribunal’s decisions in these large and complex revenue determinations to identify what happens next,” she said.

Both NSW and ACT have a deregulated energy market, which means consumers can choose their electricity and gas providers. According to Mozo’s free online electricity comparison tool, a 4-person household in ACT could save up to $120 a year by switching to the cheapest energy tariff.


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