Power prices are always an important consideration for our customers. That’s why we want to help you understand our electricity network charges (known as tariffs). In doing so, you’ll be able to make better choices about the electricity you use in your home or business, including decisions about the costs and benefits of investing in technology like solar and batteries.
The electricity network is built to cater for peaks in use. In Tasmania, peaks usually occur on weekday mornings and weekday evenings (before people leave for school and work and after they return home at the end of the day). Unlike other states, Tasmania’s peak is during winter and not summer and often happens on the first day of school after school holidays.
In much the same way more road lanes can accommodate more vehicles during peak traffic hour, we need electricity network capacity to meet our customers’ total demand. Unlike a road system though, electricity can’t be slowed down or sped up. If the electricity network is unable to cope with demand, the voltage will drop and can stop anything requiring electricity from working.
In a nutshell
So that households and businesses receive only one bill in relation to their electricity supply, we charge your electricity retailer for your connection to the electricity network and your use of the network to deliver the power you use. Our charges cover the cost of both the transmission and distribution networks and all customers make a contribution towards the cost of the shared network. Except in the case of some larger businesses, our charges are rolled up into the power bill that’s sent to you by your energy retailer.
Distribution prices 2019-20
The documents below explain our distribution network charges for 2019-20. Please contact your energy retailer to find out what the charges on your power bill will be.
- 2019-20 Annual Pricing Proposal Overview (PDF)
- 2019-20 Annual Distribution Pricing Proposal (PDF)
- 2019-20 Network Tariff Application and Price Guide (PDF)
- 2019-20 Metering Services Application and Price Guide (PDF)
- 2019-20 Public Lighting Services Application and Price Guide (PDF)
- 2019-20 Ancillary Services Fee Based Services Application and Price Guide (PDF)
- 2019-20 Ancillary Services Quoted Services Application and Price Guide (PDF)
- 2019-20 Total Efficient Cost Model Methodology and Application (PDF)
- 2019-20 Alternative Control Services Pricing Model (XLS)
- 2019-20 Indicative Pricing Schedule (PDF)
We pay embedded generators the cost of the locational component that would have been payable to the transmission network service provider had an eligible embedded generator not been connected to the network. Download our Avoided Transmission Use of System Calculation Methodology (PDF) to find out more.
Frequently asked questions
How do you calculate prices?
We’re a regulated business. This means we’re not allowed to earn more in the way of network charges in any given year than the amount set for that year by the Australian Energy Regulator. We calculate a range of network prices (called network tariffs in the energy industry) for the range of services we offer to different categories of customers, in order to recover our allowable revenue. We obtain our income to operate through these network tariffs. Energy retailers consider our network prices when setting their retail electricity prices and calculating your power bill.
The network charges we bill to energy retailers for each of their customers’ use of our network are usually linked to either their customers’ consumption of electricity or the demand they place on the network. “Consumption” refers to the amount of energy used over a period of time, while “demand” refers to the rate at which electricity is being drawn from the network at any given time. The diagram below illustrates this. 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.
Our network tariffs may include one or more of the following types of charges:
- Fixed: Where every customer on that tariff pays the same dollar amount, regardless of how much electricity they use. This sort of charge is often used to charge customers for their connection to the network.
- Consumption: Where customers pay for each unit of electricity they use
- Time-of-use: Where customers pay for each unit of electricity they use and pay different prices depending on the time of day and/or week that they use that electricity. Time-of-use pricing can also be applied to demand-based charges
- Demand: Customers pay depending on the maximum amount of electricity they use during a particular period. For example, the charge may be applied to the maximum amount of electricity used by the customer:
- During a single day in a billing period
- During peak times when the demands being placed on the electricity network are at their highest
- During off-peak times
We serve 10 different categories of customers (known as tariff classes) who take their supply from the distribution network, and offer over 20 different network tariffs, which feature various combinations of these charges. Customers are assigned to network tariffs according to their customer category, their customer type (for example residential or small business), the voltage they take their supply at and the consumption of electricity which is typical for that type of customer.
If you prefer a different network tariff than the one you may have been assigned to, a change may be requested through your energy retailer. There may be costs associated with changing prices, like paying for a new meter or the reassignment to the new tariff itself.
What drives the cost of running the electricity network?
We own Tasmania’s entire electricity network which comprises 3,500 circuit kilometres of transmission lines and underground cables, 49 transmission substations, 6 switching stations, 22,400km of distribution powerlines and underground cables, 230,000 power poles, 18 large distribution substations and 33,000 small distribution substations. Suffice to say, that’s a lot.
Every household, business and organisation connected to the electricity network makes a contribution towards the cost of building, running and maintaining this infrastructure. We also provide other services, such as operating a 24/7 fault call centre and providing education, advice and information about electrical safety. Find out more about what we do.
How do you decide how much to charge?
You pay to use the electricity network through our network tariffs. If our network tariffs are poorly designed or priced, they may encourage customers to increase their use of the network at peak times when there’s already less spare capacity. By encouraging greater utilisation of network capacity in non-peak times, over time we can limit growth in or reduce peaks in demand and, therefore, reduce the need to add more capacity to the network. This, in turn, reduces the costs of providing network services and the prices we need to charge customers. Find out more about how we’re modernising pricing.
How are prices regulated?
As a natural monopoly, there aren’t any competitors for the network services we provide because it wouldn’t make financial sense for another business to duplicate the electricity network. It would effectively double the cost of distributing electricity to the Tasmanian community; a cost which would still have to be recovered without any increase in the number of customers.
Therefore, in order to assure customers we aren’t over-charging them for our network services, the amount of revenue we’re able to earn over a 5-year period (and in individual years within that 5-year period) is determined by the Australian Energy Regulator. In setting our revenue allowances, the regulator expects us to continuously improve our efficiency by reducing the cost of the services we provide without reducing the quality and reliability of our services.
Modified load export charges
As the sole transmission network service provider in Tasmania we’re responsible for the calculation of modified load export charges (MLEC) for the State.
- The MLEC payable to us by AEMO for their connection to the network in 2019-20 is $6,486,871 (excluding GST)
- The MLEC payable to us by AEMO for their connection to the network in 2020-21 is $5,226,665.40 (excluding GST)
Types of transmission services
- Prescribed transmission services: The services provided by us as monopoly services to many customers under the revenue cap and subject to significant regulation. They include shared network services to load customers and connection services.
- Negotiated transmission services: Monopoly services provided by us to one or a small number of customers. As such, they are subject to lighter-handed regulation. They include connection services in our substations related to a new wind farm or a new load customer.
- Non-regulated transmission services: Provided by us on a contestable basis and aren’t subject to regulation as there’s already effective competition. They include operations and maintenance services provided on privately owned transmission lines, as well as connection services between our substations and our customers’ remote sites.
Our negotiating framework sets out the procedures in setting up an agreement with a company or individual wishing to receive a negotiated transmission or distribution service.
The framework details the terms and conditions to be met in order for a company to access certain transmission and distribution services. In the case of transmission, it usually applies to a new wind farm or a new load customer. For distribution, it would usually apply to public lighting and implementation of new technologies. The provision of negotiated services is subject to lighter regulation than the rules that govern the other regulated services we provide.
Our cost allocation
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.