Notified Electricity Prices 2012-13
Final Decision
The Authority released its Final Decision on the 2011-12 BRCI on 31 May 2011. The Authority estimates the BRCI will increase by 6.60% between 2010-11 and 2011-12, compared to an estimated increase of 5.83% at the time of its Draft Decision.
The 6.60% increase in the BRCI is made up of:
- a 10.62% increase in the network cost component ($/MWh), largely reflecting the ongoing investment in Queensland's distribution networks approved by the AER for the 2010-11 to 2014-15 regulatory period and a 2.13% reduction in load. As network costs account for around 49% of total costs, the 10.62% increase contributed 5.24 percentage points to the change in the BRCI (79% of the total increase).
- a 1.66% increase in the energy cost component ($/MWh), reflecting an increase in the long run marginal cost of energy offset by a reduction in the purchase cost of energy plus some changes in other energy costs, including an increase in the cost of the Federal Government's Expanded Renewable Energy Target and a reduction in the cost of complying with the Queensland Gas Scheme, as well as the 2.13% reduction in load. As energy costs account for around 41% of total costs, the 1.66% increase contributed 0.68 percentage points to the change in the BRCI (10% of the total increase).
- a 7.24% increase in the retail cost component ($/MWh), reflecting increased operating costs due to wage and price inflation, an increase in customer numbers, the inclusion of regulatory fees and a 2.13% reduction in load. As retail costs account for around 9% of total costs, the 7.24% increase contributed 0.68 percentage points to the change in the BRCI (10% of the total increase).
A key influence underlying the change in the BRCI was the change in the relevant load between the two years. For the purposes of calculating the BRCI, total costs are divided by the relevant load. Between 2009 and 2010 the load decreased by 2.13%, reflecting the more benign temperatures during the latter months of 2010. As costs increased while the load decreased, the BRCI was pushed higher than it would have been had the load remained relatively constant.
The increase in the BRCI would have been higher than 6.60% had it not been for a decision by the Queensland Government to limit the amount of revenue it would allow Energex and Ergon Energy to collect in 2011-12 as a result of a decision by the Australian Competition Tribunal. Had the Government not made this decision, which reduced network costs by $93.2 million, the change in the BRCI, and hence notified electricity prices, would have been 8.31%.
The Authority has applied the change in the BRCI to the existing notified prices to arrive at notified prices to apply from 1 July 2011. New notified prices were published in the Queensland Government Gazette on 31 May 2011.
The Final Decision, consultant's reports, associated cost of energy modelling data and the Gazette Notice of the new notified prices for 2011-12 can be accessed below.
Final Decision
Final Decision Data
