Posted on 06. Jun, 2010 in News

Energy and Resources Minister Peter Batchelor has welcomed a draft decision by the independent Australian Energy Regulator (AER) which would see Victorian electricity distribution prices drop next year.

Mr Batchelor said the draft determination of distribution charges, announced by the AER, was a reflection of a mature, stable and well-managed electricity market in Victoria.

“While this is only a draft decision, the AER seems to have struck the right balance between providing sufficient revenue for the privatised electricity distributors and ensuring Victorian families receive safe, reliable and affordable energy supplies,” Mr Batchelor said.

The AER today released a draft determination which dictates the amount that Victoria’s five electricity distribution businesses are able to charge for the five years starting from 2011. Network charges account for about 40 per cent of a consumer’s bill.

If confirmed in the final decision, today’s decision would see distribution charges for the five businesses next year decrease in real terms by between 1.5 per cent and 19.6 per cent.

For an average Victorian family with an annual electricity bill of $1200, the draft decision would mean a real reduction in 2011 of between $7 and $94.

Mr Batchelor said it was a draft decision, but highlighted the price cuts in today’s announcement were good news when seen in the context of recent AER determinations in other states:

  • In NSW distribution charges will rise by up to 93 per cent over the current five year period;
  • In South Australia distribution charges will rise by 59 per cent over the coming five year period; and
  • In Queensland, distribution charges have been approved to go up by 29 per cent in one year for some customers. 


Mr Batchelor said today’s decision was evidence of incentive based regulation working well and reflected the government’s strong record for the past 10 years in ensuring the energy networks in Victoria provided a reliable, safe and efficient power supply.

“Today’s decision should be seen as a credit to the Victorian distribution businesses as the most efficient in the country,” he said. “The decision shows that when the distribution businesses make savings, these are passed on to all Victorians.”

Mr Batchelor said the draft determination did not attempt to pre-empt the findings of the Victorians Bushfire Royal Commission or subsequent decisions of the Victorian Government.

He said the government would analyse the draft determination and, if required, provide a submission to the review.

It is the first time the AER has made a determination on Victorian distribution prices. Previous determinations have been undertaken by the Essential Services Commission.

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