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Solar penalty tariff proposal for SA households subject of Federal Court challenge

2015-11-26 10:48:45

The Total Environment Centre has intervened in a court case in which SA Power Networks is challenging the Australian Energy Regulator.

The regulator rejected a pricing proposal for households to face a solar tariff and a social tariff, which SA Power Networks said would have been directed toward helping low-income earners facing hardship in paying their bills.

It was estimated the solar tariff could cost the average solar-powered household about $100 annually.

The Total Environment Centre lodged submissions with the Federal Court urging it uphold the regulator's rejection of the penalty pricing proposal.

Extra tariffs would be solar 'disincentive'

Mark Byrne from the environment group said imposing additional tariffs would be a disincentive for people to install and use solar power.

"We've got half a million people living under solar roofs in South Australia already though and it's going to negatively impact on them as well as making it less advantageous for new customers to install solar," he said.

"Obviously in the long run we want to see more solar because it helps reduce greenhouse emissions as well as household electricity bills."


He said SA Power Networks had a flawed argument.

"Their argument effectively is that solar customers should be paying more because they use less energy and the network is entitled to a fixed amount of revenue," he said.

"The unfortunate thing about that is it discriminates against solar customers and will result in them paying about another $100 a year.

"What the network should be doing is introducing a tariff that affects everyone equally and recovers more of their revenue during those peaks, when they're worried about the impact on prices because they have to build more to meet peak demand."

Lawyer for SA Power Networks, Peter Gray QC, told the court that although solar customers used "significantly" less power from the network, they needed the network in peak periods when their solar supply was exhausted.

Mr Gray said other households would be subsidising the cost of providing electricity and associated infrastructure to households which also had solar panels.

"In terms of recovering, in effect, an amount of revenue from them to supply, augment and maintain the network capacity requirements, it's necessary to recalibrate the dollar-per-kilowatt-hour usage tariff," he said.

"It should be reset slightly to achieve recovery of the same proportionate amount of revenue attributable to those capacity requirements.

"In the long run other consumers will be subsiding those solar customers."

SA Power Networks claims 'grey area' of law used

Mr Gray said the power network still needed to be able to support solar households that might draw on it, even if they did so only sporadically.

"It must be maintained at that level, no matter how infrequently that peak demand occurs," he said.

The lawyer argued the energy regulator had in effect given itself the authority to veto SA Power Networks' decision under what he termed a "grey area" of the law.

If the cost requires a greater proportion of network charges the motivation for solar will reduce, it's simple arithmetic.

Justice John Mansfield


Justice Mansfield questioned whether an additional tariff would be a disincentive to solar power installation and use.

"If the cost requires a greater proportion of network charges the motivation for solar will reduce, it's simple arithmetic," Justice Mansfield said.

"The arithmetic will mean instead of paying it off in five to seven years, it will take over 10 years so you are less likely to do it."

Mr Gray responded that solar power would still be an attractive option for consumers who were mindful of limiting their use of the power network when their solar supply ran out.

"It may still be very attractive to a consumer to put in a micro-generation [solar panel system] with the intention of being careful about their use of electricity at times when that generation is not contributing to the native flow," he told the court.

Kristen Walker QC, for the Australian Energy Regulator, argued its decision to reject the solar pricing proposal was based on a view that the tariff would discriminate against solar households, and that was against the rules.

She said the court should only consider whether the regulator acted reasonably and within its authority to reject the SA Power Networks move, not whether the price increases were desirable.

"The question as to whether higher prices are less favourable, that is a matter for the regulator and it is not unreasonable for the regulator to conclude in the circumstances that there was less favourable treatment," she said.

The hearing is expected to run for two days, with Justice Mansfield expected to reserve his decision.

Original Article:
By Candice Marcus

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