The network component of your electricity bill is regulated by the Australian Energy Regulator (AER). Each year, network providers must submit a list of proposed network tariffs and the network prices that will apply for the next financial year, starting on 1 July.
Once approved, Ausgrid then provides its network prices to electricity retailers. The retailers incorporate those prices into the final retail tariffs that appear on a customer’s electricity bill. Retailers can choose how they pass on these network charges, taking into account their own pricing strategies and priorities. From 1 July 2014, retailer charges are no longer regulated by the Independent Pricing and Regulatory Tribunal. Our Tariff Structure Statement for the 2019-2024 regulatory period was approved by the AER in April 2019.
Ausgrid typically submits our proposed network prices to the AER in March. The AER considers our proposal to establish whether our proposed network prices are compliant with the National Electricity Rules and the Distribution Determination. AER makes its decision on our prices in May. We notify retailers about our approved network prices. Retailers then make their decision on the retail electricity prices, based on our network charges, to apply from 1 July of each year.
Our network prices dropped on 1 July 2019. The overall change in a customer’s electricity bill may depend on a range of factors such as how much electricity is consumed and the final network and retail tariffs.
Your electricity bill is helping to pay for the safe and reliable operation and maintenance of the electricity network, including the poles, wires and substations that transport electricity from power stations to your home or business. Our network is made up of about 50,000 kilometres of underground and overhead power lines, 30,000 small and large substations and more than 500,000 power poles. Much of this equipment was built in the 1960s and 1970s and needs to be replaced to ensure your power supply remains safe and reliable. The electricity network must also be maintained to provide power at high use times called ‘peak periods’.
Costs vary between regions that are supplied by different electricity networks. For example, in country areas it can cost a lot more to transport electricity over long distances across bushland, rivers and mountains. Network costs can also be affected by the age of electrical equipment, how much power is used at peak periods, demand for new connections, and reliability and safety requirements. These factors have to be taken into account when comparing the network prices of different distributors.
There are a number of steps you can take to reduce your energy usage at home or at work. Visit your energy use on our website for useful tips and tools to help you understand where your energy goes and which actions will have the biggest impact on your bills.
In some cases, it may be more cost-effective to reduce peak demand for electricity than to invest in infrastructure that is only used for a few days each year. Before undertaking any major capital programs, we conduct an investigation to see if there are more innovative and less expensive alternatives to building more network infrastructure. At the moment, the majority of our capital investment will replace ageing electricity assets so we can continue to provide a reliable and safe electricity supply.
Our new residential and small business demand tariffs are sending the price signal to reduce peak demand, to help make electricity more affordable, now and into the future.
Customers with interval meters can choose to go on a time of use tariff with their retailer. This means your electricity use is charged at different prices during three different time periods – peak, shoulder and off peak. This type of pricing provides incentives for you to save money by shifting your usage out of peak periods to less expensive shoulder and off peak periods. Our time of use tariffs are seasonal from 1 July 2018.