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SA Power Networks' electricity price hike rejected

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SA Power Networks’ appeal to charge South Australian customers more for the distribution of electricity has been rejected.

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The Australian Competition Tribunal this morning upheld a decision of the Australian Energy Regulator, which determined late last year that SA Power Networks would be allowed to collect $3.84 billion in revenue from 2015 to 2020.

The tribunal rejected SA Power Networks’ arguments that it needed a further $250 million in revenue because of additional bushfire safety, labour costs and financing costs.

Energy Minister Tom Koutsantonis told reporters this morning the decision was “an unprecedented victory for the people of this state” and urged SAPN not to undertake any further appeals.

“Every single argument SAPN has made [was] rejected,” he said.

“I now call on SAPN not to appeal this decision to the Federal Court, accept the determination of the tribunal, accept the determination of the South Australian public and the Government – enough is enough.”

Koutsantonis said South Australians would save about $700 million in electricity costs as a result of the decision.

(He cites the $700 million figure, rather than $250 million, because SA Power Networks first appealed to the Australian Energy Regulator to collect $4.53 billion between 2015 and 2020.)

Koutsantonis blamed the sale of South Australia’s poles and wires network to SA Power Networks, under the previous Liberal Government, for high consumer electricity prices.

SA Council of Social Service chief executive Ross Womersley called the decision an “incredibly important win for consumers”, saying the AER was to be “congratulated” for deciding to pursue a challenge to the SAPN appeal.

“This was one of those scenarios where people were going to be paying a lot more [and] the result of this appeal means people won’t be paying nearly as much,” he said, adding that the decision would secure average annual savings of $140 per residential customer.

Womersley noted that taking on the likes of SAPN was “a very expensive process”, as “the industry throws millions of dollars on legal fees to make sure it has the best legal representation”.

“[This result] absolutely demonstrates why we need these regulators to stand up to the industry,” he said.

Australian Energy Regulator chair Paula Conboy said today’s decision would “help provide some predictability and stability in distribution network prices over the next four years”.

“We understand that electricity bills are a concern to many households and businesses in South Australia,” Conboy said.

“Distribution charges make up about 38 per cent of the bill of SA Power Networks’ typical residential customers.”

SA Power Networks released a short statement this morning indicating it would consider its options following the determination.

“The tribunal decision is extensive, complex and highly technical,” the statement says.

“We will undertake a detailed review of the judgement before determining what further action we may take, if any.

“At this stage, we will be making no further comment on the decision.”

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