Unison welcomes call for changes to distribution pricing

Unison welcomes Electricity Authority’s call for changes to distribution pricing

Tuesday 12 July 2016 – Electricity distribution company, Unison, has welcomed the Electricity Authority’s decision that Unison did not breach the Electricity Industry Participation Code (2010) when it reduced the subsidy for residential customers with distributed generation (solar).

Nathan Strong, General Manager of Business Assurance, says the Electricity Authority’s Compliance Committee has noted that Unison’s introduction of a distributed generation pricing category is to recover existing network costs and that the contribution to network costs should be the same for all customers who use the network service at peak times.

“We are pleased the Electricity Authority acknowledges there is no difference between a customer with solar panels and a customer with a standard usage profile, in terms of their reliance on our network to supply them with electricity at peak times and in winter, regardless of how much electricity is used overall.

“We have said all along that our decision to reduce the subsidy to solar customers was about fairness for all our customers. Those customers who can’t afford or are unable to install solar shouldn’t have to carry the cost of the network being available to those who do.

As has been seen in Australia, such subsidies can quickly become unsustainable and can have significant negative impacts on customers without solar through rising prices.

“We want to help our customers to embrace new technologies and be energy efficient. Price signals are an important element of assisting customers to make informed choices about the costs and benefits of different technologies. The challenge we have is that the law constrains our ability to set prices that reflect the fixed infrastructure services that we provide,” says Mr Strong.

“We share the Electricity Authority’s view that distribution pricing models need to change.

However, that requires change to the current regulatory settings which, of course, distributors cannot bring about themselves. Additionally, until we see a more complete roll-out by retailers of smart meters and for them to develop their back-office systems to use the smart meter data, it will still take some time to reach the Authority’s desired end-point. There needs to be a much broader discussion involving government, the power generators, retailers, lines companies and end-users if we are to see meaningful change in the way customers are charged for electricity use.”

Mr Strong says Unison is committed to working with the Electricity Authority, industry, other stakeholders and Government to develop simple, effective pricing options to do this. We hope all parties can constructively contribute to this debate.

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