Regulator rejects SA network solar tariff proposal

The Australian Energy Regulator has rejected the proposal from the South Australia’s monopoly network operator, SA Power Networks, to add a $100 a year network surcharge for households with rooftop solar.

As we reported here in May, SAPN caused a furore in the Australian solar industry by proposing the surcharge in a submission to the AER, despite decisions by both the Queensland and West Australian governments – the owners of their respective networks – to back away from similar moves.

But the proposal was rejected by the AER, which said in a statement on Wednesday that it was “not satisfied” that the network had demonstrated that PV and non-PV retail customers had “sufficiently dissimilar load profiles.”

“Customers with micro-generation facilities — such as solar Photovoltaic — should not be treated any less favourably than customers without such facilities, but with similar load profiles,” the AER statement said, citing current national electricity rules.

“A PV specific tariff of the type proposed by SA Power Networks would therefore constitute less favourable treatment of retail
customers with micro-generation facilities,” it said.

SAPN had justified the proposal of the tariff by saying that solar households still needed as much power from the network at peak times as other users, even if they used less electricity from the grid during the day when the sun was shining.

But the AER ruling questioned the SA Power Networks’ focus on the peak load of the profile, only, and its use of a limited number of values extracted from extreme weather days.

It also criticised the lack of consideration of the load profile over a reasonable time period, across the range of seasons and varying times of the day, in order to demonstrate a difference in the load profiles.

The ruling also said that SA Power Networks had not given any consideration to the reasonable variation across the residential population’s load profile.

SA Power Networks now has 10 days to resubmit its 2015-16 pricing proposal, with the Solar Tariff and Social Tariff removed. It is also required to inserting a reference to the ability of customers to choose their meter service provider, and meter type when installing a PV system.

The AER will then assess the revised submission for compliance with the pricing principles and the 2015-20 distribution determination.