The Electricity Distribution Price Review (EDPR)


 
In May 2016, the Australian Energy Regulator (AER) passed down its final determination on electricity prices, which delivered substantial savings for EAGA councils.

EAGA worked with the Northern Alliance for Greenhouse Action (NAGA), Ironbark Sustainability, the Municipal Association of Victoria (MAV) and the Victorian Greenhouse Alliances to develop a joint submission on behalf of the local government sector. The submission provided a technical analysis and evaluation of the five regulatory pricing proposals provided by Victoria’s electricity distribution businesses, with the objective of capturing cost savings for councils through public lighting charges and supporting innovative initiatives that reduce emissions. The full submission can be accessed below:

EDPR Local Government Response 2015 07 13 (.pdf 724KB)

The AER determination demonstrates the following outcomes were directly attributed to the EAGA lead submission:

  • The state’s 79 municipalities will save $22M in reduced public lighting operation, maintenance and replacement (OMR) costs in the next five years
  • Total savings across the EAGA region are estimated at $0.37M for the next 5 years
  • The proposal to move dedicated public lights to a ‘negotiated framework’ was rejected by the AER (on the request of councils)
  • $5.6M was allocated to demand management programs across the EAGA region, such as residential battery storage trials which could be delivered in partnership with local government
  • The overall return on investment for the advocacy work is ~2,200%

It is important to note that savings are not consistent across distribution networks and technology types. Whilst there were no savings identified in the Ausnet Services region, it should be noted that these councils will still benefit from the EAGA lead OMR negotiation in 2014 that will deliver a $639K savings to Knox and Maroondah over the next five years.

Local Government’s second submission was developed in response to the AERs preliminary determination (October 2015). This short submission, addressed anomalies in the AERs decision, particularly with respect to material and labour costs for public lighting. Read the submission here.

What is the EDPR?

Under the National Electricity Rules, the AER conducts a pricing review for electricity distribution every five years. Through the EDPR, the regulator determines the prices the network businesses can charge for safe, reliable electricity supply to their customers. The current pricing period expires on 31st December 2015. This includes setting the operation, maintenance and replacement (OMR) charges for street lights where even minor changes can have significant cost implications for councils. The outcomes of the determination process also impact ability of the distribution business to undertake distributed energy or demand management projects, which can be implemented in partnership with councils.