Australian Energy Regulator rules on allowable network costs
What does it mean to power consumers?
Initially, power costs will come down by up to $300 per year in the Essential Energy network area. That is good news. It comes at the cost of thousands of jobs lost, many of the in areas that are critical to emergency responses. We are likely may see longer periods without power when disaster strikes!
Further, I can’t help the feeling that the move is driven by the ambition to make solar power less attractive. The less you pay, the lower the incentive to go solar. The AER ruling will also drive down the market value of the grid assets to be privatised, possibly resulting in much lower government returns from the sale/leasing of these assets. There go some of the promised infrastructure projects.
Whichever way you look at it, it is the move to renewable energies that will keep driving electricity prices down. Without the threat of customers leaving the grid, or partially leaving the grid, we would see prices going up and up.
And the final vote has not been cast – the NSW government is considering a legal challenge, so do grid operators. It may be all hot air in the end.