In April 2021, the Australian Energy Regulator (AER) passed down its final determination on electricity prices, which delivered substantial savings for EAGA councils.
EAGA worked with the Victorian Greenhouse Alliances, Ironbark Sustainability, the Municipal Association of Victoria (MAV) 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.
Both submissions to the the regulatory process can be accessed below:
The following outcomes were directly attributed the Alliance led submission:
- The AER have ruled in favour of the Alliance-led submission, which will assist councils across Victoria to avoid over $10.7M in OMR charges over the next five years, plus a further $19.8M out to 2046.
- The benefits are not distributed evenly and depend on distribution region and the mix of technology types for each council – the individual impacts for each council have been estimated here.
- For the first time in Australia, councils have undertaken a coordinated negotiation with a distributor (AusNet Services) to secure a $6.9M funding contribution to upgrade old mercury vapour lights to LEDs. The project will deliver over 220,000 tonnes in emission reductions over the next 20 years.
- The AER has approved for the implementation of smart lighting control systems, paving the way for councils to pursue smart lighting and smarty city programs.
- The AER approved network expenditure to upgrade the grid to support higher penetrations of local renewable energy resources such as solar and electric vehicles, a position supported through the advocacy submissions.
- The impact on OMR charges means the business case for major road light lighting upgrades has significantly improved across all networks – now approximately 5-8 years.
- The initiative has an annualised return on investment of 228% over the next five years, with savings exceeding Alliance membership fees by a factor of 60.
Building on a successful model – EDPR 2016-21
In 2016, the Alliance’s submission was successful in securing the following outcomes:
- The state’s 79 municipalities saved $22M in reduced public lighting operation, maintenance and replacement (OMR) costs from 2016-21
- Total savings across the EAGA region are estimated at $0.37M for the 5 year period
- 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%
Read the full submission here:
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 (PDF, 201 KB).
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.