Today the Australian Energy Regulator is set to publish Evoenergy’s 2021–22 electricity network pricing proposal, detailing a substantial increase in ACT electricity network charges. This increase is predominantly driven by a 133% rise in the jurisdictional charge resulting from the ACT Government’s 100% renewable energy target.
Under the ACT Government’s 100% renewable energy target, large-scale wind and solar generators are paid for the energy they generate under contracts entered into with the ACT Government.
Electricity network charges are a component of the retail bill (in 2020–21 they made up approximately 40%) and consist of transmission charges, the costs to operate and maintain Evoenergy’s electricity distribution network and jurisdictional charges. Under ACT legislation, Evoenergy is required to recover jurisdictional charges from the ACT community by passing the costs through to all ACT energy retailers.
This follows approval on 26 February 2021 by the ACT Minister for Energy, Water and Emissions Reduction of the forecast amount Evoenergy is able to recover for costs associated with the administration of the ACT Government’s large-scale feed-in tariff scheme for the next financial year (part of the ACT Government’s 100% renewable energy target).
Under the scheme, payments are made on a contract-for-difference arrangement, where the payment is calculated as the difference between the fixed feed-in tariff price agreed to in the contract and the wholesale electricity price.
Evoenergy’s Chief Executive Officer John Knox said in this instance the sustained decrease in wholesale electricity prices for around the past twelve months has been the driving factor behind the increase.
“What we’ve seen over the past year is a significant drop in wholesale electricity prices which has increased the payments Evoenergy has had to make under the scheme. This has resulted in a tripling of the funds Evoenergy requires to make large-scale feed-in tariff payments to generators, from around $42m in the current financial year to $127m in 2021–22,” Mr Knox said.
“We understand passing through any increase is difficult for the ACT community, let alone one of this size. The significant jurisdictional charge increase, combined with smaller transmission and distribution charge increases, is expected to result in an average network increase of around 41 per cent higher than 2020–21.”
“Under current ACT legislation, Evoenergy’s role is to administer the ACT Government’s large-scale feed-in tariff scheme. The ACT Government is responsible for the framework of the scheme and the long-term contracts with renewable energy generators.”
“We will continue to work with the ACT Government as part of our administrative responsibility and have raised our concern about the impact of this increase on the ACT community.”
The Australian Energy Regulator will now assess Evoenergy’s network electricity pricing proposal with a final decision expected in May 2021.
For more information about the electricity network charge, visit Evoenergy’s electricity network and jurisdictional charges page.
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