Review of Regulated Retail Electricity Tariffs and Prices
On 11 May 2011, the Authority received a Ministerial Direction (the Direction) under section 10(e) of the Queensland Competition Authority Act 1997, directing it to conduct a further review of regulated retail electricity tariffs and prices. The review was called in response to recommendations by the Authority in reports to Government as part of its 2009 Review of Electricity Pricing and Tariff Structures.
The Direction required the Authority to report on:
- an alternative retail electricity pricing methodology for the determination of the cost components under an N (network) + R (retail) approach; and
- an alternative set of retail tariffs, based on an N+R approach, which could be applied from 1 July 2012.
The covering letter from the Minister also noted that:
- the Government had endorsed an inclining block network tariff for domestic customers commencing 1 July 2012;
- obsolete and declining block tariffs were to be removed from the tariff schedule from 1 July 2012;
- the Authority was required to undertake targeted consultation with industry groups before changing any farming or irrigation tariffs;
- the Government intends that large, non-residential customer in the Energex network area consuming over 100MWh per annum cease to have access to regulated tariffs from 1 July 2012; and
- the regulated street lighting tariff will in future only apply in the Ergon Energy network area.
A copy of the Direction and covering letter from the Minister can be downloaded below.
On 24 June 2011, the Authority released an Issues Paper and invited submissions from interested parties. The Issues Paper and submissions can be accessed here.
On 13 September 2011, the Electricity Act 1994 (the Electricity Act) was amended to replace the previous Benchmark Retail Cost Index approach to adjusting regulated retail electricity prices with a new price determination process based on a N+R cost build-up approach.
On 22 September 2011, the Minister for Energy and Water Utilities delegated to the Authority, under section 90AA(1) of the Electricity Act, the task of determining regulated retail electricity prices for 2012-13.
Under the Delegation, the review process undertaken in accordance with the original Direction, including the Issues Paper and submissions in response, are taken to be valid parts of the new pricing determination process for 2012-13.
As a result of the amendments to the Electricity Act and the new Delegation from the Minister for Energy and Water Utilities, this review has been subsumed within the pricing determination for 2012-13. See here for further information.
Minister’s Direction Notice
