27 December 2020

ACT power bills set to rise as states enjoy falls

| Ian Bushnell
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Rising network costs

Rising network costs will boost ACT bills. Photo: File.

Canberrans will buck a national trend and pay more for their household power over the next three years, according to the Australian Energy Market Commission.

AEMC says in its report on residential electricity price trends that annual bills in the ACT are expected to increase by 2.3 per cent or $45 over the whole reporting period to 2022-23.

It says that nationally, although Western Australia and the Northern Territory are not included, residential electricity prices and bills are expected to decrease until 2021-22, before rising in 2022-23, but overall prices will fall.

This is driven by the falling cost of wholesale electricity, due to increasing solar and wind generation and lower gas prices.

Environmental costs are also falling, driven by a decrease in Large-scale Renewable Energy Target (LRET) costs due to cheaper large-scale generation certificates (LGCs).

Across the NSW border, bills are expected to fall by $29 to 2022-23, driven by a greater take-up of solar rooftop panels, south-east Queensland by 14.2 per cent ($190) and 3.6 per cent (or $70) in Tasmania.

In Victoria, a surge in wind farm generation will see bills fall by 37.2 per cent or $197 over the three years, and in SA more solar PV is behind an expected decrease of 10.8 per cent (or $203) in bills.

While the ACT’s electricity is now sourced completely from renewable generators, rising network costs will increase bills by 14.6 per cent (or $78) over the next three years.

AEMC says this is being driven by an increase in distribution and transmission costs, partly due to previous under-recoveries and higher operating expenditure.

Wholesale costs are expected to go down by 13.4 per cent (or $108) and environmental costs by 8.1 per cent (or $26).

The residual cost component explains the remaining variations in the annual residential bill.

AEMC attributes the expected slight increase in prices and bills in 2022-23 to the closure of the Liddell power station.

Federal Minister for Energy and Emissions Reduction Angus Taylor said the Federal Government expected the electricity sector to deliver 1,000 megawatts of new dispatchable energy before Liddell closes in 2023.

He said the forecast lower prices come after government measures such as introducing a price cap to protect loyal customers from being ripped off, prioritising the delivery of reliable generation and transmission, getting rid of sneaky late payment penalties, and passing the ‘big stick’ legislation to hold the energy companies to account and require them to pass on cost reductions to their customers.

AEMC says that the pricing and billing outcomes do not constitute specific forecasts and that the results may not reflect what consumers actually pay.

”Actual price movements will be influenced by how retailers compete, the dynamics of the wholesale spot and contract markets, the outcome of network regulatory decisions, and changes in policy and legislation,” it says.

”However, the results do reflect movements in the underlying costs of service provision and are a guide to pricing and bill directions based on current expectations, policy and legislation.”

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Capital Retro8:56 pm 01 Jan 21

“Just put a set of p/v panels on the roof and your bill goes backwards.”

Not after the capital outlay and other factors are taken into account it doesn’t.

It does but of course the capital outlay needs to amortised over a number of years. Just like any capital cost.

Capital Retro5:30 pm 29 Dec 20

“Canberra has the lowest uptake and penetration of rooftop solar in the country ….”

That’s because it costs a hell of a lot more to buy and install it in Canberra.

HiddenDragon8:06 pm 27 Dec 20

The varying ownership structures of electricity generation and distribution assets across the States and Territories would make comparisons of profits, dividends etc. difficult – that’s presumably (one of the reasons, at least) why the AEMC report on prices does not look at that issue.

In the case of the ACT, ACTEW via Icon Water pays the ACT Government an annual dividend and interest on loans (or perhaps that should be “loans”).

The interest payments have been relatively steady in recent years, in spite of repeated and cumulatively substantial cuts in official interest rates, so unless there have been significant additional loans to Icon / ACTEW there may be some opportunistic interest charging going on – which would be passed on as a cost to Icon / ACTEW customers. [ACT Budget Paper 3 – section 6.2 refers]

“So unless there have been significant additional loans to Icon”.

You know you could just read their published annual reports to find out right? Although I think you already probably know the answer.

https://www.iconwater.com.au/Media-Centre/Reports-and-Publications/Annual-Reports.aspx

Capital Retro4:32 pm 27 Dec 20

“Mick Welsh 3:08 pm 27 Dec 20
Samuel Nicholls coal power is more expensive than wind and solar”

Please explain this claim given there a still a lot of consumers getting massive subsidies for exporting solar to the grid. Some of the subsidies are over twice what the grid is selling power back to the same people. I call it “solar sophistry”.

Tell me more. I’m only getting eight cents a kilowatt hour export on my plan

Capital Retro7:46 am 29 Dec 20

When solar exporting was introduced to home owners many took advantage of the subsidies available namely the RECS and long term (20 year) contracts of 0.49 cents a kilowatt hour.

I looked at solar a few years ago and without at least 0.15 cents a kilowatt hour export it wasn’t economically viable, even with the RECS.

Capital Retro5:49 pm 26 Dec 20

Virtue signaling costs!

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