The Commission conducted an Inquiry into the retailer component of regulated electricity prices to apply from 1 January 2008 to 31 December 2010. The retailer component, charged by AGL SA, represents just over half of a customer’s electricity bill.
Commencement of Inquiry into regulated electricity prices from 1 January 2008 – 31 December 2010
The Commission regulates the electricity prices that apply to “standing contract” customers in SA. Standing contract customers are those that have not entered into market contract with AGL or another energy retailer. Approximately 40% of customers are on a standing contract.
The Commission has commenced an inquiry into the retail component of the regulated electricity prices to apply from 1 January 2008 – 31 December 2010. The retailer component of tariffs is just over half of a customer’s total bill (the rest being network tariffs).
The Inquiry has commenced following the receipt of a proposal submitted by AGL SA setting out the proposed retailer component of the regulated prices to apply to “standing contract customers”.
AGL SA proposed price parth
|
1 Jan 08 |
1 Jul 08 |
1 Jul 09 |
1 Jul 10 |
| AGL SA Proposal |
8.2% |
CPI + 2.68% |
CPI + 2.68% |
CPI + 2.68% |
The Commission has released an Issues Paper on 15th May 2007discussing some of the key issues associated with the AGL proposal. The Commission called for submissions by 22nd June 2007.
Both the proposal and Issues Paper can be accessed below. The indicative timetable for the Inquiry is as follows:
30 April 2007- Commission received AGL SA Submission
15 May 2007- release Issues Paper
22 June 2007- close of submissions on Issues Paper
24 August 2007- release Commission Draft Report and Draft Price Determination
30 November 2007- release Commission Final Report and Final Price Determination
1 January 2008- New Electricity Contract prices and price path to take effect
Publications
The Commission has received 13 submissions to the Issues Paper on 2008 to 2010 electricity standing contract prices.
On 2 July 2007 the Commission received a ‘Supplementary Approach to Wholesale Electricity Cost Benchmark’ from AGL SA.
Stakeholders, particularly those who have made submissions, may wish to comment on this supplementary approach from AGL SA. Any such further submissions should be provided by 5pm Friday 20 July 2007.
Submissions
The Commission has released its Draft Report and Draft Price Determination on the retail component of regulated electricity prices to apply from 1 January 2008 – 31 December 2010.
The Commission’s draft decision is to set the retail component of the standing contract price path lower than that initially proposed by AGL SA.
AGL SA proposed price path vs. Commission’s draft price path
|
1 Jan 2008 |
1 Jul 2009 |
1 Jul 2009 |
1 Jul 2010 |
|---|
| AGL SA Proposal |
8.2% |
CPI +
2.68% |
CPI +
2.68% |
CPI +
2.68% |
| Commission's draft price path |
7.33% |
CPI |
CPI |
CPI |
The Commission has called for submissions to the Draft Report by 21st September 2007.
The draft price path would result in standing contract customers experiencing a rise of about 4% on 1 January 2008. For a typical residential customer, this means an extra $40 on an annual bill. Any changes thereafter will reflect movements in CPI and network charges, giving an increase slightly over CPI.
The Draft Report, along with associated consultant reports, are available below.
Publications
The Commission has received 9 submissions to the Draft Report on 2008 to 2010 electricity standing contract prices.
The Commission has also received a revised price path proposal from AGL SA, proposing larger increases in the retail component to reflect the rapid increases seen in recent months in wholesale electricity prices in the national market, which reflect the impact of the drought on generator availability. These effects have been more pronounced in the eastern states, in part because much of South Australia’s generation capacity does not require fresh water for cooling. Nevertheless, market data shows that wholesale electricity prices in South Australia have risen.
Submissions
The Commission has released its Final Report and Final Price Determination on the retail component of regulated electricity prices to apply from 1 January 2008 – 31 December 2010.
The Final Report takes into account submissions to the Draft Report, along with a further submission from AGL SA in October 2007, containing a further amended price path proposal (three years only) with a significant rise in prices. The Commission’s final decision is to set the retail component of the standing contract price path lower than that proposed by AGL SA.
AGL SA revised price path and the Commission’s price path
|
1 Jan 08 |
1 Jul 08 |
1 Jul 09 |
1 Jul 10 |
| AGL SA Proposal |
26.5% |
CPI |
CPI |
CPI |
| Commission's Price Path |
12.34% |
CPI |
CPI |
CPI |
As the retailer component is just over half of a customer's total bill, the Commission's price path results in a rise of about 6.8% on total standing contract bills from 1 January 2008. For a typical residential standing contract customer the decision means an extra $49 for their annual bill in 2008 (over 2007). Any changes thereafter will reflect movements in CPI and network charges only, giving an increase slightly over CPI.
As market contracts continue to offer lower rates than the standing contract, customers remaining on the standing contract can ameliorate the effects of the new price path by moving to a market contract.
Publications
