Australians Face Rising Energy Transmission Costs
Australians hoping for energy bill relief next financial year have been met with disappointment as the cost of energy transmission is set to rise in different parts of the country. This decision by the Australian Energy Regulator (AER) will see the amount charged by six electricity distributors increase over the next five years.
In New South Wales, customers of Ausgrid, Endeavour Energy, and Essential Energy will see their bills increase by $14 to $39 annually. ACT residents served by Evoenergy will face an $18 annual increase.
Tasmanian households will be hit the hardest, with an average increase of $56 per year. Small businesses in the state will see an even steeper rise of $79 annually.
The Northern Territory will experience the most significant increase, with transmission costs charged by the Power and Water Corporation rising by $116 per year for the average household. Small businesses in the territory will face a staggering $332 annual increase. However, the NT government's retail price cap will shield most residential and business customers from feeling the full impact of this rise.
The AER attributed the price hikes to rising interest rates and inflation. "These revenue determinations have been developed during a challenging time for energy consumers and the sector more broadly," said AER chair Clare Savage.
Energy analyst Marc White predicts a decade of rising distribution costs for Tasmanians due to major energy projects like the North West Transmission Developments and the Marinus Link undersea cable. He expects the next five years of increases to be driven by rising interest rates and capital costs, followed by increased investment in network assets in the subsequent five years.
Tasmanians will have to wait until June to find out their exact electricity prices for the next financial year, as the Tasmanian Economic Regulator will consider wholesale energy prices, renewable energy certificate costs, retail operation costs, and the AER-set network costs before making a final determination.
Despite the recent price hikes, White predicts a more modest overall increase for consumers this year compared to the 9.51% and 11.88% increases experienced in the previous two financial years. He attributes this to the rise in network charges and an increase in renewable energy certificate costs.
Electricity prices played a significant role in Tasmania's recent state election campaign, with the Liberal Party promising a one-off $250 bill reduction payment for households and $300 for small businesses.