Victorian network charges revamped

Victorian network charges have undergone significant change and the new 5-year regulatory period has led to changes to network tariffs occurring on 1 July instead of 1 January each year, thereby aligning with the other States.

Victorian network charges have undergone significant change and the new 5-year regulatory period has led to changes to network tariffs occurring on 1 July instead of 1 January each year, thereby aligning with the other States. The summary below outlines the key changes for each of the distribution businesses.

These changes have a common thread of:

1. the legacy 7:00am to 11:00pm peak definition is being retired and replaced with different time periods given the significant changes to the intraday demand profile caused by roof-top solar and large scale solar
2. demand charges are more common and more focussed on critical periods
3. transition summer incentive demand charges will apply and be introduced over the next 3-years

These new network tariffs should lead to changes in bundled and unbundled retail tariff structures over time, otherwise the price signals setup by the network businesses will be blunted in passing through to the consumer.

CitiPower, Powercor and United Energy

As CitiPower, Powercor and United Energy are owned by the same parent company, they all have streamlined and consolidated their tariff structures in the same or similar way.

For Residential customers:

1. all time-of-use (ToU) tariffs have been discontinued and replaced by a new ToU tariff. The peak energy time is now 3pm - 9pm everyday compared to the legacy 7am - 11pm weekdays.
2. an optional single rate tariff with or without a demand charge applies

For Small, Medium, and Large business tariff classes:

1. there is now a maximum demand threshold for small and medium businesses with any business using more than 120 kVA will be classified as Large business
2. the usage threshold to distinguish between Small and Medium businesses is changed from 60 MWh pa to 40 MWh pa.

For Small businesses, all ToU tariffs have been discontinued and replaced by a new ToU tariff. The new peak energy time for this new ToU tariff is 9am - 9pm workdays compared to the legacy 7am – 11pm definition.

For Medium businesses located in the CitiPower or Powercor areas with annual usage below 160 MWh, a new optional medium business demand tariff with a peak energy time of 10am - 6pm workdays is available.

For Large businesses, there is now a demand threshold of more than 120 kVA with other major changes including:

1. fixed charges have been removed
2. Peak energy time changed from 7am – 11pm weekdays to 7am - 7pm workdays
3. the rolling demand changed from all days to 7am – 7pm workdays with minimum chargeable demand of 120 kVA for low voltage, 500 kVA for high voltage and 5 MVA for sub-transmission
4. a new summer incentive demand charge has been introduced and is based on a monthly maximum kVA demand between one of the two demand measurement periods: 1pm - 4pm workdays or 4pm - 7pm workdays (initially we thought the customers can pick the period but it is actually based on their TUoS regions) from December to March

Given the Large businesses changes listed above, transitional arrangements have been introduced:

1. All customers are assigned to a default transitional tariff
2. Summer incentive demand charge will transition from zero in FY-21/22 to the full level in FY-24/25
3. 12-month rolling demand charge will correspondingly reduce each year of the transition period
4. Customers can opt-in to the full tariff but then cannot opt out

For Sub-transmission customers, the summer incentive demand charge is zero and the distributors will review once the transmission charging structure is known. There will be no opt-in tariff for sub-transmission customers

Jemena

For Residential customers, all ToU tariffs have been discontinued and replaced by a new ToU tariff. The new peak energy time for this new ToU tariff is 3pm - 9pm everyday compared to the legacy 7am - 11pm weekdays.

For Small businesses, demand charge is based on 12 month rolling maximum demand. The peak energy time for tariff A210 changed from 7am - 11pm weekdays to 9am - 9pm weekdays.

For Large businesses including Low Voltage, High Voltage and Sub transmission:

1. peak energy time changed from 7am – 11pm weekdays to 8am - 8pm weekdays
2. all demand charges are based on a 12 month rolling maximum demand and the demand charging window changed from all days to 8am - 8pm weekdays
3. Summer Demand Incentive Charge was introduced with charging window being 4pm – 7pm workdays each month in December to March.

Similar to the previous 3 network distributors, there are transitional tariffs for all large business customers. The Summer Demand Incentive Charge price will be transitioned to a cost reflective level over 5 years with fully cost reflective price levels applying in FY-25/26.

AusNet Services

For Residential customers, a new ToU tariff replaced a number of legacy “two-rate” tariffs except for NEE24. The new peak energy time for this new ToU tariff is 3pm - 9pm everyday compared to the legacy 7am – 11pm weekdays.

For Small businesses consuming less than 40MWh pa, a new ToU tariff replaced a number of legacy “two-rate” tariffs. The peak energy time for this new ToU tariff is 9am - 9pm everyday compared to the legacy 7am – 11pm weekdays.

For Medium businesses, the default tariff NSP56 will have the consumption charging window amended as follows from July 2023:

1. Morning Peak energy charging window 7am - 10am weekdays will be removed
2. Evening peak energy charging window 4pm - 11pm weekdays will be narrowed to 4pm - 9pm, weekdays
3. No change to Shoulder energy charging window of 10am - 4pm weekdays
4. Off-peak energy charging window are all other times