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How we price our services

As a provider of electricity transmission and distribution network services in Tasmania, TasNetworks prepares network charges for customers connected to both networks. The amount of revenue we can recover from our customers each year is set by the Australian Energy Regulator (AER). 

Every five years we submit a proposal to the AER, detailing our proposed plans, revenue required and associated customer network charges to cover the costs of building, operating and maintaining Tasmania's electricity network. 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 current regulatory control period ends on 30 June 2024, with the next regulatory control period starting on 1 July 2024 and ending on 30 June 2029. Learn more about the revenue reset process on our dedicated engagement platform, Talk with TasNetworks.

Pricing for the transmission network

We allocate our regulated transmission revenue among our transmission customers to ensure that the costs of the transmission network are shared equitably. Transmission revenue is allocated through the setting of prices at each connection point throughout Tasmania. 

The transmission network service provider (TNSP) prices are charged to the users of the transmission network, which includes the distribution network service provider (DNSP). The DNSP includes their portion of the transmission charges in  the distribution network pricing calculations. 

Our Transmission Pricing Methodology outlines our compliance with the National Electricity Rules (NER) and the AER’s Pricing Methodology Guidelines.

Pricing for the distribution network

DNSPs are required to prepare a Tariff Structure Statement (TSS) to set out:

  • tariff classes, 
  • proposed tariffs and their structures and charging parameters, 
  • the strategy for the introduction of export tariffs, 
  • the approach to setting tariff levels in each year of the regulatory control period
  • policies and procedures a DNSP will use to assign customers to tariffs or reassign customers from one tariff to another.

Our distribution network price setting process is outlined in two documents, the Tariff Structure Statement (TSS) and Tariff Structure Explanatory Statement (TSES). The TSS demonstrates our compliance with the NER and the associated pricing principles, and sets out the proposed network tariff structures, with indicative prices, to recover the allowed annual revenue as determined by the AER for the regulatory control period. The accompanying TSES provides the supporting explanations and analysis of the network tariffs, structures and assignment policies proposed in the TSS.

  • 2024-29 Regulatory Proposals

    2024-29 Regulatory Proposals

    We submitted our Combined Proposal for the 2024-2029 regulatory control period to the AER for consideration on 30 January 2023. Following a detailed review of the Combined Proposal, on 28 September 2023 the AER published its draft decision. The AER accepted many aspects of the Combined Proposal, including our TSS and TSES, and proposed amendments to our Transmission Pricing Methodology and Distribution Connection Pricing Policy. 

    We submitted our Revised Proposal on 30 November 2023 to the AER, where we accepted the AER’s proposed amendments to our Transmission Pricing Methodology and Distribution Connection Pricing Policy. The AER’s final determination is due by 30 April 2024, where they will confirm the maximum allowable revenue TasNetworks can recover from our customers for the 2024-2029 regulatory control period.

    Relevant pricing documents for the 2024-2029 regulatory control period can be found below, and the full suite of supporting documentation for our 2024-2029 Combined Proposal and Revised Proposal is available on the AER’s website. The expected timelines for this process are outlined in the FAQs below.

  • 2019-2024 Regulatory Proposals

    2019-2024 Revenue Proposals

    For the 2019-2024 regulatory control period, 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.

FAQs

  • What are the timeframes for the proposal consultation process?
    Consultation Timeline
    Milestone Timing
    TasNetworks submits Combined Proposal 31 January 2023
    AER publishes issues paper March/April 2023
    AER holds public forum April 2023
    AER issues draft decision September 2023
    TasNetworks submits revised Combined Proposal (if required) November 2023
    AER issues final decision April 2024
    New regulatory period starts 1 July 2024
  • 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.