AER issues final decision on SA Power Networks' 2020-25 Regulatory Proposal

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The Australian Energy Regulator (AER) today has announced its final decision in regard to SA Power Networks’ 2020-25 Regulatory Proposal.

The AER has approved revenue of $3,914 million for the 2020-25 period, 5.5 per cent lower than the allowed revenue in the 2015–20 final decision. This revenue reflects the cost of maintaining and upgrading the network of substations, Stobie poles and wires that delivers electricity reliably and safely to about 900,000 residential and business customers across South Australia.

Real revenues will fall from 2019–20 levels by 9.4 per cent in the first year of the regulatory control period with a smaller 1.79 per cent decrease over the remaining years of the regulatory control period. The decision means SA Power Networks’ charges for customers will be held below inflation for the five-years.

The actual first-year impact for residential and business customers will be announced later this month when the AER confirms SA Power Networks’ proposed tariffs for 2020/21. These tariffs will reflect the revenue decision and other factors, including the impact of regulatory incentive schemes; lower business energy sales (due to solar uptake and lower business demand including from COVID 19); and Government FiT scheme costs.

Announcing the AER decision, AER Chair Clare Savage said “We have largely supported what SA Power Networks proposed to us because of their strong consumer engagement. Consumers were clear in their support for lower prices, increased spending to accommodate more solar PV and new tariff structures,” said Ms Savage.


Ms Savage said “Rooftop solar is now mainstream for South Australian households and businesses but that has an effect on the operation of the network. We’ve funded increased capability to help the network cope with this change.

“We’ve also approved discounted daytime tariffs to encourage consumers to use power when the sun is shining. The decision will allow SA Power Networks to come back to us for more funding if they need to further strengthen the network to cope with very low levels of grid demand during the day,” said Ms Savage.

The new "solar sponge" tariff will see charges increase during mornings and evenings to encourage consumers to access the cheaper pricing in the middle of the day. This will only be available for those homes with time-of-use meters installed and where the retailers pass on the new tariff structure.

“We welcome finalisation of what has been a long and detailed process to determine our revenue for 2020-25,” said SA Power Networks General Manager Customer & Community, Jess Vonthethoff. “We particularly appreciate the extensive contribution of time and effort from our customer and stakeholder representatives in helping shape our proposal.”

For more information on this determination, please visit the AER's website here

The Australian Energy Regulator (AER) today has announced its final decision in regard to SA Power Networks’ 2020-25 Regulatory Proposal.

The AER has approved revenue of $3,914 million for the 2020-25 period, 5.5 per cent lower than the allowed revenue in the 2015–20 final decision. This revenue reflects the cost of maintaining and upgrading the network of substations, Stobie poles and wires that delivers electricity reliably and safely to about 900,000 residential and business customers across South Australia.

Real revenues will fall from 2019–20 levels by 9.4 per cent in the first year of the regulatory control period with a smaller 1.79 per cent decrease over the remaining years of the regulatory control period. The decision means SA Power Networks’ charges for customers will be held below inflation for the five-years.

The actual first-year impact for residential and business customers will be announced later this month when the AER confirms SA Power Networks’ proposed tariffs for 2020/21. These tariffs will reflect the revenue decision and other factors, including the impact of regulatory incentive schemes; lower business energy sales (due to solar uptake and lower business demand including from COVID 19); and Government FiT scheme costs.

Announcing the AER decision, AER Chair Clare Savage said “We have largely supported what SA Power Networks proposed to us because of their strong consumer engagement. Consumers were clear in their support for lower prices, increased spending to accommodate more solar PV and new tariff structures,” said Ms Savage.


Ms Savage said “Rooftop solar is now mainstream for South Australian households and businesses but that has an effect on the operation of the network. We’ve funded increased capability to help the network cope with this change.

“We’ve also approved discounted daytime tariffs to encourage consumers to use power when the sun is shining. The decision will allow SA Power Networks to come back to us for more funding if they need to further strengthen the network to cope with very low levels of grid demand during the day,” said Ms Savage.

The new "solar sponge" tariff will see charges increase during mornings and evenings to encourage consumers to access the cheaper pricing in the middle of the day. This will only be available for those homes with time-of-use meters installed and where the retailers pass on the new tariff structure.

“We welcome finalisation of what has been a long and detailed process to determine our revenue for 2020-25,” said SA Power Networks General Manager Customer & Community, Jess Vonthethoff. “We particularly appreciate the extensive contribution of time and effort from our customer and stakeholder representatives in helping shape our proposal.”

For more information on this determination, please visit the AER's website here

  • SA Government initiatives to secure electricity supply

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    19 Jun 2020
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    South Australian government initiatives to secure electricity supply

    The SA Government has announced a number of actions aimed at ensuring secure electricity supply for South Australians amid continued growth in solar rooftop installations.

    SA Power Networks welcomes these initiatives as they will have an important role in ensuring we can continue our State’s exciting energy transition in a co-ordinated, secure and managed way.

    South Australia has some very specific challenges in managing our electricity system due to high levels of rooftop solar generation and comparatively low levels of energy demand.

    The challenges impact all levels of the State’s energy system and ultimately put at risk the security, reliability and quality of supply experienced by customers.

    The National Electricity Market operator (AEMO) has provided a technical analysis to the State Government examining the issues posed by continuing rapid growth in solar and its ability to manage security of supply. The two key areas of concern highlighted by the SA Government following the detailed AEMO modelling are:

    • ensuring the continued operation of rooftop solar during system disturbances (many inverters currently in place switch off in response to disturbances, exacerbating the impact on the system) and
    • managing minimum demand when we are separated from the National Energy Market (ie loss of the SA-Victoria interconnector).

    To tackle this, the Government has announced a number of actions for urgent implementation while we wait for completion of a new SA – NSW interconnector (Electranet’s Project EnergyConnect).

    These initiatives include:

    1. working with SA Power Networks to bring forward $10 million in investment to enhance voltage management and provide emergency backstop capabilities if required by AEMO
    2. accelerating new smart solar standards ahead of national changes so that solar supports the grid during disturbances
    3. establishing constraints to manage the SA - Vic interconnector to reduce the risk to the State’s energy system until Project EnergyConnect is delivered
    4. updating protection schemes and emergency protocols to make sure they are fit for purpose in low demand conditions
    5. increasing fast frequency control through the Grid Scale Storage Fund and rollout of home batteries.

    In welcoming the initiatives, SA Power Networks’ General Manager Network Management said “SA Power Networks has been engaging with customers, stakeholders, rule makers, industry and manufacturers to develop prudent, cost effective approaches to deal with emerging issues in the electricity distribution network due to rapidly increasing levels of solar generation in our system.”

    “The measures being undertaken by SA Power Networks create the potential to double the amount of renewable energy the distribution network can accommodate over the next five years,” Mr Schmidt said.

    These initiatives include Time of Use Tariffs available from 1 July 2020; encouraging customers to use appliances in the middle of the day to soak up energy from rooftop solar; investment in enhanced voltage management and monitoring and analytics in the low voltage network; and developing industry approaches and standards to support introduction of flexible export limits for rooftop solar to respond to what is happening in the network at any given time.

    You can find out more here. Many of the issues are canvassed in the Future Networks section of our Regulatory Proposal 2020-25. You can also read a copy of the State Government’s AEMO’s statement.


  • AER delays final decision on 2020-25 Revised Regulatory Proposal

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    01 May 2020

    Following consultation with stakeholders, the Australian Energy Regulator (AER) has decided to delay its final 2020-25 revenue determination for SA Power Networks to 29 May 2020.

    The short delay is to allow the AER to use short-term forecasts of inflation from the Reserve Bank expected on 8 May 2020. This will allow the AER to include a more accurate reflection of the economic circumstances in its decision for the next regulatory control period.

    Once the final determinations have been made, SA Power Networks and the AER will work together closely to enable new retail prices to be in places for 1 July 2020.

    In the event the Reserve Bank does not publish new forecasts on 8 May 2020 the AER will publish its final decisions as soon as possible using the February short-term inflation forecasts to give certainty of prices over the five year regulatory period. A revised timeline will be published shortly in addition to submissions received during consultation on the proposed delay. You can read more here.

  • Consumer Engagement Report highlights network innovation

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    30 Apr 2020
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    Energy Networks Australia has released a report highlighting how networks are adopting new and innovative approaches to support customers.

    A compilation of entries to the 2019 Energy Networks Australia and Energy Consumers Australia Consumer Engagement Awards, the document provides a fascinating insight into projects that are helping deliver a smarter grid to support the energy transformation to benefit consumers.

    CEO Andrew Dillon said while networks were not named on bills and customers did not pay them directly, they had significant face to face time with customers. You can read more here.

  • 2020-25 Revised Regulatory Proposal submitted 10 December 2019

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    05 Jun 2020
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    We submitted our 2020-25 Revised Proposal for managing the South Australian electricity distribution network with the Australian Energy Regulator (AER) on 10 December 2019.

    The Revised Proposal followed an extensive engagement program with customers and stakeholders over three years. The Proposal included an average reduction of $62 for residential customers and $276 for small-to-medium sized businesses in 2020-21. In fact, our Proposal outlined the lowest distribution network charges in 2020/21 that we've seen in a decade.

    Figure 1: Key outcomes for customers

    Throughout conversations with customers and stakeholders there was a growing recognition that equity for customers is not just a matter of price. Equity also means not passing on today’s costs to future generations and doing something for customers who get a substantially worse service than others in South Australia. Our stakeholders also made it clear that it is not equitable for us to “kick the can down the road” by deferring expenditure on an ageing network today, in order to push additional costs onto future years and generations of customers.

    As a result, our Revised Proposal included some important targeted enhancements to reliability for some of our worst-performing feeders, as well as plans to reduce the risks posed by our ageing assets.

    Figure 2: Customers' key priorities and our Revised Proposal

    In response to the AER’s Draft Decision on our Original Proposal, lodged back in January 2019, we provided additional evidence to support programs in areas such as replacement of ageing assets, investment in information technology and some much needed property improvements at various sites across the business.

    You can read more about our Revised Proposal in our Overview .

  • Talking Engagement

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    11 Dec 2019
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    Talking Engagement

    Our engagement program over the past three years has been extensive and has covered a wide variety of topics and has seen us meet people from all across the State.

    It has been our honour and privilege to be given an opportunity to listen to so many of you throughout our broad community. So, we say thank you so much for taking the time to post a comment or complete a survey online, provide written feedback, attend a workshop or meeting, or stop by and say hi at a pop-up community booth.

    We hope you continue to engage with us – we truly believe that it is only by working together that we can ensure the best outcomes for our customers.

  • Hardening the network

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    02 Dec 2019
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    Extreme weather in 2016/17 resulted in significant network outages and loss of supply to customers for extended periods of time. Customers, particularly in regional areas, are often supplied via overhead bare-wire conductor making them more likely to be affected by storm activity. Customers located in heavily vegetated areas are also more likely to be affected by strong winds and storms.

    In our 2020-25 Revised Regulatory Proposal, we are proposing targeted programs to reduce power outages and improve reliability caused by severe weather events. One way of doing this is to finalise our ‘Hardening the Network’ program - which we developed in response to customer feedback. This program has been ongoing since 2015. Once (if) completed, this program will reduce the length of outages by two hours each year for around 50,000 customers in targeted regional areas across SA.

    In its Draft Decision, the Australian Energy Regulator (AER) did not support our proposed ‘hardening’ program. Following the AER’s Draft Decision, SA Power Networks consulted further with our Customer Consultative Panel (SAPN CCP) and key stakeholders, and received strong feedback from several stakeholders that the Hardening the Network program should be re-submitted to address the ongoing reliability concerns of pockets of customers (especially business customers), who are impacted by weather events.

    We'd like to hear from you - comment below to show your support of this program.
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  • Improving reliability for our worst-served customers - map your experience!

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    27 Nov 2019
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    Our 178,000km network of poles and wires is one of the most reliable in Australia, but for 16,000 customers mainly on the edge of the grid, they go days without power each year! By making small, targeted improvements to our network we could keep the power on more often for these customers.

    In its Draft Decision, the AER did not allow our proposed program to significantly improve reliability in targeted regional areas – a program we developed in response to customer feedback. We are now re-submitting this program as part of our Revised Proposal, but we need your support to encourage the AER to reconsider its position on these works.

    We recently brought Adnyamathanha elder, Terry Coulthard from the Iga Warta community in the northern Flinders Ranges, to speak to a group of stakeholders about why improved reliability is so important to him and others like him. Check out the short video then find your home or business on the interactive map, select a pin and rate your reliability experience.

  • Replacing and upgrading our ageing assets - tell us what you think!

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    26 Nov 2019
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    Our network of poles and wires is the oldest in Australia, built in the 1950s and 1970s. That’s up to 70 years ago! Not surprisingly, parts are now reaching the end of their working lives. To ensure we continue to safely supply reliable power to the 900,000 homes and business we service in SA, 38% of our proposed capital works program over 2020 – 2025 is dedicated to replacing and updating our ageing network assets.

    In its recent Draft Decision, the AER has proposed we spend 20% less in the next five years on replacing ageing assets than we did from 2015-2020.

    We don’t believe this is sustainable for a network of the scale and age of South Australia’s and it will make it more difficult to maintain reliability and safety. It also will push increasing costs on to customers in the future. Let us know what you think today



  • AER announces Draft Decision on our 2020-25 Regulatory Proposal

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    15 Nov 2019

    The Australian Energy Regulator (AER) response accepted a number of our plans, including work to ensure the network can support the integration of more solar, batteries and electric vehicles to 2025.

    However, we are concerned the AER did not fully recognise the very specific challenges of managing South Australia’s ageing distribution network – the oldest in the National Electricity Market (NEM).

    If the AER draft decision stands we will spend 20% less in the next five years on replacing aging assets than we invested in 2015-2020. We don’t believe that this is sustainable for a network of the scale and age of South Australia’s and it will make it more difficult to maintain reliability and safety. It also will push increasing costs on to customers in the future.

    Had the AER accepted our proposal in full for a measured ongoing replacement of ageing assets, it would add about $3 per annum to the bill of a residential customer.

    We also are disappointed, as are some of our stakeholders, that the AER has not supported a plan to improve reliability of some of our worst-performing power lines mainly in regional locations including the Eyre Peninsula and Adelaide Hills.

    Our future plans were developed following extensive engagement with customers, stakeholders and the community who indicated they had three priorities – keeping prices down, maintaining safety and reliability and transitioning to the new energy future.

    We are in the process of reviewing the AER’s specific decisions in greater detail. We are also engaging further with our customer representatives and other stakeholders before submitting a revised proposal to the AER in December.

    You can read the full Draft Decision on the AER’s website.