Victoria Electricity Network Price Increases

The Australian Energy Regulator (AER) has reduced the potential impact that future distribution prices increases could have had on Victorian electricity customer had the network opertaors had their way.

The network operators had wanted to pass on cost increases which would have amounted to over $130 being added to the typical household bill in Victoria ove r the next 5 years.

The AER deemed these pricing demands too aggressive and has elected to reduce the impact down to $82 on average.  However, with the Victorian electricity market deregulated as it is, there's no certainty as to how these cost increase will flow through.

Summary of the impacts:

CitiPower - 2011: -1.6%   2012-15: 2.9%    
Powercor - 2011: 1.1%    2012-15: 2.5%    
Jemena - 2011: 3.1%    2012-15: 2.3%    
SP Ausnet - 2011: 5.1%    2012-15: 2.9%    
United - 2011:1.2%     2012-15: 2.6%    
Average - 2011: 1.8%    2012-15: 2.6%

NB: Based on % change per year

CitiPower- 2011: -$30.80    2012-15: $21.60
Powercor- 2011: $0.50        2012-15: $16.20
Jemena- 2011: $23.90     2012-15: $14.40
SP Ausnet - 2011: $48.00     2012-15: $21.60
United- 2011: $1.80       2012-15: $18.00
Average - 2011: $8.68       2012-15: $18.36

NB: Based on averafe $ change per year between 2012 & 2015

Tim Wolfenden, Director at comments: "It's a welcome sign that the AER is standing up for customers and looking to reduce the impact of future price increases.  They've taken the sting out of the tail of the increases proposed by Victoria's network operators to the tune of around 40%.  
The only concern is whether the holding back of these increases is merely delaying the inevitable - if investment is lower over the next 5 years, then we're just as likely to see more costs being hammered onto customers bills between 2015 and 2020.

With the Victorian electricity market fully deregulated, retailers are capable of passing through all or none of these increases - and some will potentially use these rises as an excuse to pass through an even higher amount.

Choice is key, and it's down to the customer to make this choice.  Switch retailers, and move to a business who's going to charge you less for what you consume."