Push to hit solar homes with added fees rejected again by regulator

A proposal by South Australia’s monopoly network operator SA Power Networks to charge rooftop solar customers as much as $100 a year more for access to the grid has again been rejected by the Australian Energy Regulator.

The SAPN “solar tax” proposal, which the utility predicted would cut rooftop solar uptake by half in the state, was rejected by the AER in June of that year, who said it constituted “less favourable treatment” of solar customers, without evidence of “sufficiently dissimilar load profiles.”

A legal challenge to have the Federal Court overturn the AER’s decision was also rejected, although that result was not yet known when SAPN submitted its December 2015 tariff structure statement. Clearly, it decided to take its chances on re-submitting the proposal, unrevised.

In a draft decision published on Monday, the Regulator said that while there were many elements of the broader SAPN proposal that it approved of – and in particular, the move to demand tariffs for residential and small business customers – other elements had rendered it non-compliant, including the unchanged social and solar tariff proposal.

“We do not approve SAPN’s proposed social and solar tariffs,” the AER said. “We are not satisfied SAPN’s proposed social and solar tariffs contribute to the achievement of compliance with the Rules.

“SAPN originally proposed these tariffs as part of its 2015/16 annual pricing proposal. We did not approve these tariffs at that time. SAPN appealed our decision to the Federal Court.

“…The Federal Court has since upheld our decision not to approve these tariffs. SAPN has not submitted any new information in support of these tariffs since (that ruling). For example, SAPN has not submitted any new information that specifically addressed how these customers’ use of and connection to the network result in these customers contributing significantly different costs on the
network,” it said.

“We therefore have no reason to depart from our previous assessment, which was to not approve these tariffs.”

The AER also recommended that, if SAPN wished to include these tariffs in their revised proposal or future tariff structure statements, “we encourage them to provide information which highlights how these tariffs comply with the distribution pricing principles, in that: they reflect their efficient costs of providing services to these customers; and take into account impacts on customers.”

In a statement accompanying the draft decision, AER board member Jom Cox made it clear the Regulator hoped SAPN and other networks would move on from the proposal and others like it, and towards tariffs that would help customers make better choices about their electricity use.

“Distribution networks are developing new tariffs that reflect the costs of different patterns of use. This will allow consumers clearer choices and they will be able to directly benefit if they use electricity at times that don’t increase costs for the networks,” Cox said.

SAPN’s submission had, on balance, constituted a “positive step towards cost reflective tariffs,” he said.

“These tariffs incorporate different charges which reflect the network’s peak demand periods, which predominantly occur during hot summers.

“Through lower prices at off peak times and higher prices during peak periods, these new tariffs will give customers more control over their electricity bills”, he added.

SA Power Networks’ revised tariff structure statement is due by October 4, 2016. The AER will make a final decision on the tariff structures in February 2017.