Without doubt, everyone would like cheaper electricity bills, but if one considers what 1kW gives (and it’s price compared to other consumer items), overall I believe the price of electricity is possibly reasonable. Notwithstanding this, the amount that consumer’s pay in the electricity has increased considerably over the past 20+ years. Some of this increase is due to costs of supply and generation, but I suspect that a considerable portion of increasing electricity bills is due to increasing domestic consumption (as evidenced in the past 18 months due to Covid). Increased consumption = higher electricity bills.
As Australia’s standard of living has increased, we now expect to use devices/appliances which support this increase in standard of living. Invariably, these devices/appliances use electricity causing a substantial increase in usage and hence increased bill amounts. The increasing domestic consumption has resulted in a shift in peak demand from early to afternoon hours (caused a few decades ago by business/industry) to the late afternoon/early evening.
Domestic consumption and the cost of an electricity bill will continue to rise as more and more appliances/devices/consumer products shift from traditional forms of energy to electricity. This includes transportation, if electric vehicles uptake is as predicted, and other types home equipment and heating. The pressure on the network will also increase through the phasing out of traditional forms of energy due to public policy. This includes in some jurisdictions, gas which will be replaced with electricity - and likewise for calls for wood fired heating.
The increased domestic consumption will place further pressure on network costs (to meet a potentially higher peak demand), storage (as variability of renewable generation requires higher reliance on storage) and generation (including adequate) redundancy to maintain reliable supply.
Yes, I have worked with a network operator on a planning and development perspective, including assisting with information compiling for resets.
Yes and no.
For the no. It is challenging in the existing environment which is in a state of flux. Network infrastructure has a life of 50+ years and up to more recent times, there was certainty with long term forecast. More recently, there seems to be an impression that the network infrastructure should respond immediately to potential changes which may be temporary or suit the current operational or political environment.
Adapting to regular changes isn’t often practicable, or where it is, could be costly (where costs are passed onto the consumer).
The AER hasn’t been overly successful in
- change management and expectations (from a consumer perspective - why are changes needed, why are electricity costs structures slowing changing to the historical model (e.g. higher peak time costs), what is practicable/impracticable (there are many commentators who don’t understand how the electricity industry works but seem to have all the solutions to fix the problems)
- consistency in approach over reset areas (this is particularly the case in recent times where different approaches to peak demand management are employed (e.g. Demand charges/levies on top of base tariffs to Peak period tariffs). Consumers looking over the fence see others are doing it differently (even though many networks are interconnected) thinking that the charging system adopted for their own location penalises them compared to others.
The AER has also been lacking in identifying/forecasting problems caused by domestic PV on the network. If the AER had hindsight (say 20 years ago), the approach taken for domestic PV systems may have been different and the current impacts of such systems on the network could have been potentially avoidable.
And the Yes, the AER has been placing pressure on network operators to reduce network charges. The AER reset review process is an example where the AER independently critiques information provided in the reset to determine if there is opportunity to reduce the Reset costs and thus consumer costs. The AER ability to set the Reset amount irrespective of what the network operator asks for is positive and should be continued into the future.