On 14 December 2010, the Commission made its Final Price Determination on the Electricity Standing Contract Price to be applied from 1 January 2011 to 30 June 2014. The standing contract price comprises two separate charges, the retailer charge which includes the cost of electricity generated, and the network charge which covers the cost of transporting electricity from generators to customers. Electricity retailers recover network charges on behalf of the SA electricity distribution business, ETSA Utilities. Network charges typically make up about 40% of a typical residential customer’s electricity bill.
The Commission’s Final Determination on the Electricity Standing Contract Price allows the regulated retail price to change annually, based on movements in unregulated “market contract” electricity prices. Such a change is permitted subject to the pricing outcome sitting within a predetermined floor and ceiling established by the Commission, which sets out the minimum and maximum standing contract prices (inclusive of network prices) that can be charged by the standing contract retailer, AGL SA.
Clean Energy Act 2011
The Australian Government’s Clean Energy Bill 2011 passed through the Senate on 8 November 2011. The Government states the legislation:
“will put a price on carbon pollution, promote investment in renewable and clean energy technologies and support action to reduce carbon pollution.”
In the fixed price stage that runs from 1 July 2012 to 30 June 2015, the carbon price will start at $23 per tonne and rise by 2.5 per cent a year in real terms. Thereafter, a flexible carbon price will apply.
The Commission’s 2011 Standing Contract Price Determination does not include an allowance for the costs associated with the introduction of a carbon price in the predetermined floor and ceiling thresholds.
On 13 February 2012 the Commission received an application from AGL SA to re-open the Price Determination to adjust the tolerance band as a result of the introduction of a carbon price. The proposed adjustment to the tolerance band is intended to accommodate any impacts of the carbon pricing mechanism on market contract prices.
Further information relating to the introduction of a carbon price can be found by visiting the Australian Government’s Clean Energy Future website.
South Australian Feed in Tariff Scheme
On 23 December 2011, ETSA Utilities submitted a letter to the AER, giving notice of its intention to recover increased costs associated with administering the South Australian Feed-In Tariff (FiT) Scheme. A copy of ETSA Utilities’ letter can be viewed on the AER’s website.
ETSA Utilities has requested that the AER revoke its current distribution determination and make a new determination for the remainder of the period. The inclusion of additional costs will influence the tariff set by ETSA Utilities, which in turn will affect the total standing contract prices which can be charged by AGL SA.
Request for Submissions
The Commission invites written submissions from interested parties in relation to AGL SA’s Application for a Special Circumstances Review. Written comments should be provided by 15 March 2012. It is highly desirable for an electronic copy of the submission to accompany any written submission.
It is Commission policy to make all submissions publicly available via its website (www.escosa.sa.gov.au), except where a submission, either wholly or partly, contains confidential or commercially sensitive information provided on a confidential basis and appropriate prior notice has been given.
The Commission may also exercise its discretion not to exhibit any submission based on their length or content (for example containing material that is defamatory, offensive or in breach of any law).
Submissions should be directed to:
2012 AGL Application for Special Circumstances Review
Essential Services Commission of SA
GPO Box 2605
Adelaide SA 5001
Telephone: (08) 8463 4444 Facsimile: (08) 8463 4449 Email: escosa@escosa.sa.gov.au
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