Groups call for lower energy network charges
Consumer, small business and social sector groups are urging the Australian Energy Regulator (AER) to rethink the rates energy users pay for network infrastructure. In a letter made public on Monday, the collective argues that while investment in energy networks is crucial, costs should be recovered at the lowest level necessary.
The groups are specifically calling on the AER to reduce the Rate of Return Instrument, which determines how much consumers pay network operators for investments in poles, wires, and substations. The regulator is currently reviewing this instrument and has been accepting submissions, with a final decision due in December.
Brendan French, chief executive of Energy Consumers Australia—one of the groups behind the letter—said a billion dollars of consumers' money was being poured down the energy network drain. "That's money that can and should be back in Australians' pockets for other essentials," he said. "The AER needs to put consumers first and not let energy networks needlessly profit from this complex regulatory process."
French acknowledged that a draft proposal from the regulator addressed some of what he called the billion-dollar premium, but said it does not go far enough. "Our joint letter to the AER makes a simple request - maximise every cent possible back to households and small businesses facing cost-of-living pressures," he added.
Cassandra Goldie, chief executive of the Australian Council of Social Service, said energy networks were continuing to make significant profits at a time when some people were struggling to heat their homes in winter, keep cool in summer, and put food on the table. She said the AER's proposed changes, while welcome, do not go far enough given the significant impacts electricity prices are having on inflation and cost-of-living. "The AER must implement further measures to reduce unnecessary network profits," Goldie said, adding that its job is not to strike a "balanced outcome" between energy networks and consumers, but to put people first.