2014 Network Price Determination
Under the Electricity Networks (Third Party Access) Code (Network Access Code), which is a schedule to the Electricity Networks (Third Party Access) Act, the Commission is required to set the revenues that the network service provider can recover, or prices that can be charged, for the provision of regulated network access services.
In the Territory, the licensed network service provider is the networks business division (PWC Networks) of the Power and Water Corporation (PWC).
The Commission has published its Final Determination in relation to the maximum allowed revenue that PWC Networks can recover from the provision of regulated network access services during five-year regulatory control period from 1 July 2014 to 30 June 2019 (the 2014-19 regulatory control period).
The Final Determination is the culmination of an extensive two-year review process which included consultation with stakeholder groups and assessment of detailed regulatory proposals provided by PWC Networks.
The Final Determination is made up of two parts:
- Part A is the Statement of Reasons, which sets out the Commission’s basis and rationale for the 2014 Network Price Determination; and
- Part B is the 2014 Network Price Determination, which sets out the Commission’s constituent decisions in relation to the revenue cap which will apply to the supply of regulated network access services by PWC Networks during the 2014-19 regulatory control period.
The Commission has also produced a Fact Sheet explaining the reasons for the Determination, the process and final outcome of the Determination, and the impact on retail customers.
The Commission’s Final Determination on the total revenue requirement to apply to PWC Networks for the 2014-19 regulatory control period for the supply of regulated network access services is $1 034 million (nominal), inclusive of $42 million (nominal) carried over from the cost pass through from the implementation of the Davies Review recommendations approved by the Commission in May 2013.
The approved total revenue requirement is $181 million less than the $1 215 million (inclusive of the May 2013 cost pass through) sought by PWC Networks in its revised regulatory proposal.
The Commission has established a revenue path, of the CPI minus X form, that is consistent with the approved total revenue requirement. The revenue path has been set to phase in the required reference tariff increases over the initial regulatory years of the 2014-19 regulatory control period.
Reference tariffs are generally paid by electricity retailers (including PWC Retail) to PWC Networks, and represent one component of bundled electricity charges, which also include generation, system operation and retail charges.
For small and medium size retail customers (those consuming less than 750 MWh of electricity per annum), retail prices are regulated by a Northern Territory Government Pricing Order which sets the maximum amount that PWC Retail is able to charge these categories of retail customers. A change to the reference tariff as a result of the 2014 Network Price Determination will not impact the current Pricing Order or the retail prices that PWC can charge these categories of retail customers.
For retail customers on negotiated contracts (for example, retail customers consuming more than 750 MWh of electricity per annum), the size and timing of the impact on retail prices payable by those retail customers will depend on the terms and conditions of each individual negotiated contract. However, for retail customers using between 750 MWh and 2 GWh per annum, there is currently a Northern Territory Government Pricing Order in place that limits the rate at which PWC Retail can increase an individual retail customer’s retail price.
2014 Network Price Determination – Fact Sheet
2014 Network Price Determination – Part A – Statement of Reasons
2014 Network Price Determination – Part B – Network Price Determination
Accompanying documents
2014 Network Price Determination – PWC Networks NTRM – Final decision
2014 Network Price Determination – PWC Networks RFM – Final decision
Parsons Brinckerhoff Review of PWC Revised Regulatory Proposal 2014-19