How we price our services
The amount of revenue we recover from our customers each year is set by the Australian Energy Regulator (AER). The current regulatory period ends on 30 June 2024, with the next regulatory period starting on 1 July 2024 and running until 30 June 2029.
As a provider of electricity transmission and distribution network services in Tasmania, we are required to submit a proposal to the AER every five years, detailing our proposed plans for planning, building, operating and maintaining Tasmania's electricity network and associated customer network charges.
This comprehensive and highly regulated process, known as a revenue reset, exists primarily to protect electricity customers, and works by imposing performance standards on network service providers (NSPs) like TasNetworks, by capping revenue to expected cost forecasts developed for each five-year regulatory period.
The development of each proposal requires a huge amount of work from multiple teams within TasNetworks, usually spanning several years. It includes financial forecasting, asset planning, price and tariff modelling, reviews of existing services and policies, and comprehensive customer and community engagement.
Learn more about the revenue reset process on our dedicated engagement platform, Talk with TasNetworks.
2024-2029 Regulatory Proposals
We submitted our Combined Proposal for the 2024-2029 regulatory control period to the AER for consideration on 31 January 2023.
In addition to the above, the full suite of supporting documentation for our 2024-2029 Combined Proposal is available on the AER’s website.
The AER is currently reviewing our Combined Proposal and supporting documents, with their final determination influencing how much we can spend on our networks over the next five years.
We welcome your feedback on our Combined Proposal, either directly to us at TasNetworks, or through the AER’s consultation process. The expected timelines for this process are outlined in the FAQs below.
2019-2024 Regulatory proposals
For 2019-2024, the AER has allowed us to recover $2,012.5 million from our customers to operate Tasmania’s distribution and transmission networks over five years from 1 July 2019.
Distribution Regulatory Proposal 2019-2024
On 30 April 2019 the regulator released its final decision for the period 1 July 2019 to 30 June 2024.
- TasNetworks Tariff Structure Explanatory Statement 2019-2024 (PDF)
- TasNetworks Tariff Structure Statement 2019-2024 (PDF)
Transmission Revenue Proposal 2019-2024
On 31 January 2023, the AER published its final decision to amend TasNetworks’ Transmission Pricing Methodology to accommodate the inclusion of systems strength. The prices and methodology for our prescribed transmission services for 2019-2024 is available below. The marked-up approved methodology can be found on the AER website.
What are the timeframes for the proposal consultation process?
How does TasNetworks calculate prices?
We’re a regulated business. This means we’re not allowed to earn more from network charges in any given year than the amount set for that year by the AER. We calculate a range of network prices (called network tariffs) for different categories of customers, in order to recover our allowable revenue. We obtain our income to operate through these network tariffs. Even if our network charges don't appear on the bills received by customers from their electricity retailer, retailers consider our network prices when setting their retail electricity prices and calculating electricity bills. Find out more about our current prices
The network tariffs we apply to each customer (and bill to their retailer) may include one or more of the following types of charges:
- Fixed charges: Every customer on the same network tariff is charged the same amount, regardless of how much electricity they use, when they use it or their level of demand. This sort of charge is often used to charge customers for their connection to the network, usually on a daily basis.
- Consumption charges: Customers are charged for their use of the network through a change applied to each unit of electricity they use - typically per kilowatt hour.
- Demand charges: Customers are charged for their use of the network depending on the rate at which they draw electricity from the network (known as demand). Demand is typically measured across 15 minute intervals, with demand charges usually applied to a customer's maximum level of demand recorded over the course of a billing cycle.
The diagram below illustrates this the difference between demand and consumption. Under the two examples shown, the two customers might consume the same amount of electricity, but the customer with the flat load profile has a lower level of demand overall, and a lower peak demand.
How does TasNetworks decide how much to charge?
As a customer, you pay to use the electricity network through the network tariffs we charge to your electricity retailer. Each year we submit an annual pricing proposal to the AER for its approval, which sets out the prices for each of our network tariffs. Those prices are calculated using a methodology approved by the AER which is designed to recover the exact amount of revenue which the AER has approved for TasNetworks to recover in that year.
The recovery of that annual revenue amount is divided between each network tariff (there are around 20) based on things like the number of customers on each tariff, the amount of electricity they’re expected to consume and the demands they typically place on the network. This is done to ensure that different categories of customers, and customers on different network tariffs, make a fair contribution towards the cost of the network
How does TasNetworks allocate costs?
Our Cost Allocation Method (CAM) outlines the methodologies we use to allocate shared transmission and distribution costs.
There are a number of costs within our business operations that can’t be easily allocated to either the transmission network or the distribution network. Such costs include the purchase and operation of computer systems (like payroll and financial systems) and the costs associated with the management and administration of the whole business.
These costs are considered shared as they’re required for the operation of both our transmission and distribution activities. The regulator approved our CAM in 2015 and we’ve used this method for the allocation of shared costs since then.
What drives the cost of running the electricity network?
We own Tasmania’s entire electricity network, which provides electricity to over 302,000 connections using 3,500 circuit kilometres of transmission lines and underground cables, 49 transmission substations, 22,912km of distribution powerlines and underground cables, 232,700 power poles, 18 large distribution substations and 33,000 small distribution substations.
It's the value of these assets that primarily drives the cost of providing the electricity network.
Every household, business and organisation connected to the electricity network makes a contribution towards the cost of planning, building, running and maintaining this infrastructure and the day-to-day cost of servicing our customers and running our business. We also provide other services, such as providing education, advice and information about electrical safety. Find out more about what we do.