❓ Hon Jim Chown questions the Minister for Energy regarding a significant increase in Synergy's daily supply charge for business plan L1 tariff customers. The Minister justifies the increase as a tariff rebalancing to align fixed charges with network service costs, also noting a decrease in variable charges.
AnsweredQoN 747Legislative Council
QuestionView source ↗
SYNERGY — DAILY
SUPPLY CHARGE
747. Hon JIM CHOWN to the minister representing the Minister
for Energy:
I refer to the astronomical increase
since July 2018 in the daily supply charge from Synergy. One example of this
increase is customers on the Synergy business plan L1 tariff. The daily supply
charge has increased from 50.75c to 171.54c. This equates to an annual increase
of 240 per cent or $440.
(1) How does the minister justify
such an increase?
(2) Would the
minister please explain how this unprecedented increase to the daily supply
charge promotes the government's policy of jobs in regional Western Australia?
SUPPLY CHARGE
747. Hon JIM CHOWN to the minister representing the Minister
for Energy:
I refer to the astronomical increase
since July 2018 in the daily supply charge from Synergy. One example of this
increase is customers on the Synergy business plan L1 tariff. The daily supply
charge has increased from 50.75c to 171.54c. This equates to an annual increase
of 240 per cent or $440.
(1) How does the minister justify
such an increase?
(2) Would the
minister please explain how this unprecedented increase to the daily supply
charge promotes the government's policy of jobs in regional Western Australia?
AnswerView source ↗
I thank the honourable member for
some notice of the question.
(1)–(2) The
increases to the daily supply charges of non-contestable tariffs applied on 1
July 2018 were part of a deliberate rebalancing of tariffs. The rationale for
this rebalancing was to align the fixed components of the tariffs with the
fixed supply charges that Synergy incurs from Western Power for the provision
of network services.
The rebalancing involved an increase
in daily supply charges, but also a decrease in tariffs' variable
components. In the example of the L1 tariff, the variable charge decreased by
20 per cent. Customer bill impacts will be dependent on the consumption levels
of the customer. Using the L1 tariff as an example, if the average customer's
usage from 2017–18 remained unchanged in 2018–19, this customer's
total bill would reduce by 5.6 per cent. This is because at an average level of
consumption, the variable proportion of the bill is greater than the fixed and,
as such, the benefit of the 20 per cent reduction in variable charges outweighs
the 240 per cent increase in daily supply charges.
From a policy perspective,
rebalancing electricity tariffs to be more cost reflective has a number of
benefits, including providing better signals to consumers for the management of
electricity usage, which over time facilitates more efficient investment
decisions in electricity infrastructure.
some notice of the question.
(1)–(2) The
increases to the daily supply charges of non-contestable tariffs applied on 1
July 2018 were part of a deliberate rebalancing of tariffs. The rationale for
this rebalancing was to align the fixed components of the tariffs with the
fixed supply charges that Synergy incurs from Western Power for the provision
of network services.
The rebalancing involved an increase
in daily supply charges, but also a decrease in tariffs' variable
components. In the example of the L1 tariff, the variable charge decreased by
20 per cent. Customer bill impacts will be dependent on the consumption levels
of the customer. Using the L1 tariff as an example, if the average customer's
usage from 2017–18 remained unchanged in 2018–19, this customer's
total bill would reduce by 5.6 per cent. This is because at an average level of
consumption, the variable proportion of the bill is greater than the fixed and,
as such, the benefit of the 20 per cent reduction in variable charges outweighs
the 240 per cent increase in daily supply charges.
From a policy perspective,
rebalancing electricity tariffs to be more cost reflective has a number of
benefits, including providing better signals to consumers for the management of
electricity usage, which over time facilitates more efficient investment
decisions in electricity infrastructure.
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