When it comes to regulatory resets, we strive to have the following key pillars in everything we do.
An Affordable Network
Affordability is at the top of the priority list for everyone. For us, it’s important to ensure our investment priorities strike the right balance between safety, reliability, growth and affordability.
There are many factors to consider in price resets, such as prudent expenditure, rate of return, depreciation, real price growth and service-price options. Possibly the most topical for customers and stakeholders when it comes to pricing is the conversation about tariffs.
Network pricing is set in accordance with the National Electricity Rules (NER) and recovers costs related to electricity distribution in addition to transmission and solar PV feed-in-tariff costs, including smart meters. While you may not see this cost on your bill, it makes up the total amount that is charged by your retailer. It is the amount it costs the retailer to access our network so they can supply you with electricity.
When we set prices we’re thinking about the end user, so we design them in a way that provides agency. This means considering the way people use, store and generate power, now and into the future, and understanding what our customers value most.
We think good pricing should support customers and consider their diversity. They must also send the right signals to retailers and end users – residents, small business, commercial and industrial. Recognising these important attributes is the first step to ensuring our tariff structures are underpinned by customers’ choice.
We’ve progressed our plans for network pricing collaboratively with all Victorian networks.
Some of the things we’ll consider in designing tariffs for 2021-2015 include:
- Tariff principles, tariff design option and transition paths
- Complementary services we can bundle with our tariffs to make them easier for customers to understand
- Rebates and incentives schemes to encourage people to reduce demand during peak events.
A Resilient Network
Powercor is the largest of Victoria’s five electricity distribution networks, and supplies the regional cities of Mildura, Shepparton, Bendigo, Ballarat, Warrnambool and Geelong.
The majority of Powercor’s electricity infrastructure is overhead, with approximately 540,000 poles carrying 85,000 kilometres of power line over a total network area of almost 150,000 square kilometres. Powercor customers enjoy network availability of 99.97 per cent.
Our role in powering Powercor customers and communities includes:
- Maintaining network safety and reliability to meet the current power supply needs of our customers
- Extending and upgrading the network so that the future power supply needs of customers are met when required
- Operating the network on a day to day basis
- Connecting new customers to the network
- Maintaining the public lighting system
- Reading electricity meters
- Providing meter data to retailers.
Network performance, including reliability, security of supply, quality of power, connections and demand forecasting will form an important part of our regulatory submission. After all, it underpins our entire network and cost to supply customers. Some of the things we’ll consider in planning and modelling for 2021-2025 include:
- Investments in infrastructure to upgrade, augment or accommodate our network for future demand or growth
- The value customers place on reliability
- Our compliance requirements when it comes to performance.
A Flexible Network
One thing is for certain – the energy market is evolving. As our market changes, so do the options for storing and generating electricity.
The advancements in solar generation means that almost any small user can be a generator with energy flowing in different directions at different times of the day, creating a much more dynamic integrated system. Solar is just the start of the story.
In the future, distributed generation might interact with various forms of local storage technology and energy management systems, giving customers more options in how they use the grid and how they manage their energy usage.
Our solar options are on the table
On 1 April 2019 we hosted a future networks forum with 45 stakeholders. The forum took a deep dive into our plans for solar and demand response, focusing on how we can enable more distributed energy onto the network.
When looking at the two topics we narrowed down the feedback we were seeking to – our proposed options to enable more solar exports, and current and future demand response programs and incentives to encourage customers to shift their energy load to off-peak periods.
Stakeholders’ feedback from the forum suggested we needed to do more. Not only with our plans for solar and demand response, but how we unlock more opportunities for distributed energy through all avenues.
In response, we brought our Energy Futures Customer Advisory Panel together on 30 April 2019 and put all of our options back on the table. Since then, we’ve refined the options paper and taken it into other stakeholder forums for discussion. We realise it’s important to get everyone’s input and have now opened up for consultation.
Our planning builds on experience
Already we have taken steps to better understand the changing needs of the network and our customers as part of the transformation. We have worked with residential customers to install batteries into homes as part of a trial, and last year rolled out Energy Partners, our demand response program in the Powercor network.
Efficiency incentives, renewable energy and non-network solutions and incentives for demand management will form an important part of our regulatory submission. Some of the things we’ll consider in planning and modelling for 2021-2015 include:
- Rise in take up and popularity for solar, batteries and electric vehicles
- Impacts of distributed energy generation on our network
- Requests and level of support for community micro-grid, solar and wind farm projects
- Network data access and portability to support community and state level renewable energy targets.