Developments in the electricity sector are of great interest to QCOSS because the supply of electricity is an essential service that is vitally important for the health and wellbeing of families and individuals. QCOSS believes it is important to provide a voice for residential consumers, and particularly low-income and disadvantaged households, in the tariff reform process.
Under the new pricing rules outlined by the Australian Energy Market Commission (AEMC), Ergon Energy and Energex must prepare Tariff Structure Statements (TSS) for submission to the Australian Energy Regulator (AER). The TSS must outline proposed network tariffs from 2016, and must comply with the pricing principles outlined in the rules from 2017. Three of the important requirements that are relevant to this submission are to:
- Meet the pricing objective that network charges reflect the efficient costs of providing those services;
- Base each tariff on the distributors’ Long Run Marginal Cost (LRMC); and
- Consider the consumer impact of changes from the previous regulatory year.
QCOSS has made submissions to Ergon Energy and Energex on within which we have provided comment on the proposed tariffs, in particular the extent to which the organisations are meeting the customer impact principle and what actions we consider are required prior to, and during, the implementation of the new tariffs for the new tariffs to be effective in achieving their objectives.
Network tariffs in Queensland are amongst the highest across the National Electricity Market (NEM), and changes in tariff structures can have a large impact on the prices that households pay, depending on their current usage profile and ability to change it. QCOSS believes that any decisions on future network tariffs must not result in worse outcomes for low-income and vulnerable Queenslanders, many of whom have been under considerable pressure from price increases in the previous 10 years. It is vital that:
- households can understand the tariffs and respond to them
- households can access the tariffs and any supporting technology if they wish to do so; and
- there are adequate protections for vulnerable households.