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National energy regulator pushes energy savings plan

Distribution contributes to price hikes 16000646 800468954 0 0 15410 300

Electricity suppliers could pass on savings to consumers if the Australian Energy Regulator (AER) manages to succeed in implementing proposed reforms.

AER wants to introduce changes to the National Electricity Rules in order to ensure that customers are more accurately charge for the cost of energy distribution.

The expense of upgrading networks is commonly cited by electricity suppliers as a leading reason for price hikes.

AER chairman Andrew Reeves says: "The cost of delivering electricity through the transmission and distribution networks can be up to 50 per cent of a consumer's energy bill.

"And while there is a need to spend money on these networks to ensure a reliable supply, there needs to be a balance to be sure consumers pay no more than necessary."

The proposed changes would include an expansion of the AER's powers, allowing them to exercise greater control over costs - including the ability to "determine the forecast of efficient expenditure needed by the business for a reliable electricity supply".

AER hopes to enforce greater pricing consistency, easing the burden of costs being forced upon consumers.

Should the recommendations be acted on, AER would review rate forecasts every five years and ideally create more stability in market prices.

Posted by Charlie Moore