The ACT’s Independent Competition and Regulatory Commission (ICRC) has released an Issues Paper as its first step towards determining electricity prices for the Territory from 1 July next year.
The Commission said it had been asked by the Government to determine the price of electricity for small customers who purchased their power from ActewAGL on a standard customer contract.
“The Issues Paper describes the Commission’s current pricing approach and sets out issues that may be relevant to this price investigation,” the ICRC said.
It said the Paper invited stakeholders to make a submission before 11 October.
“The Commission’s form of regulation comprises a price control mechanism that is informed by a cost-index model and includes pass-through arrangements,” it said.
“The cost-index model is used to determine the maximum allowable price change across the basket of regulated tariffs from one year to the next.”
It said the pass-through arrangement would provide for the treatment of certain unexpected events, beyond the control of ActewAGL, which may occur after the price direction has been made.
It said its determination would apply for the four-year period from 1 July 2020 to 30 June 2024.
It said its pricing model relied on cost benchmarks for three main cost categories: wholesale energy costs, network costs and retail costs.
“Once these three cost categories are estimated, they are added together and multiplied by a retail margin (to provide a profit allowance) to produce total costs to be recovered in dollars per megawatt hour ($/MWh),” the ICRC said.
“This cost is then compared to the total costs calculated for the previous year. This produces a maximum allowable percentage.”
The Commission’s 43-page Issues Paper can be accessed at this PS News link.
