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Thursday, 24 June 2010

Aurora notes Regulator’s decision
Aurora Energy today noted the decision by Tasmania’s independent Economic Regulator to allow the pass-through of previously approved network tariffs to customers to take effect from 1 July 2010.

The Regulator has confirmed that residential power prices will increase by 6 per cent and business prices will rise 8 per cent. This will result in an increase of between $22.50 and $29 a quarter for most residential account holders.

The decision passes through to customers the already approved cost increases to pay for new investment in and maintenance of the transmission network (operated by Transend Networks) and distribution network (operated by Aurora Network).

The Australian Energy Regulator’s approval of large transmission increases has been well documented, and last month the Tasmanian Economic Regulator publicly approved the distribution tariffs.

These two network charges now account for about 52 per cent of the average electricity bill following the decision to allow the pass-through of these costs.

About four-fifths of the expected increase to take effect from 1 July can be attributed to higher-than-forecast transmission costs.

The Tasmanian Economic Regulator last month noted that “the key driver for increases in network charges is the significant increases in transmission costs, which have increased on average by around 27 per cent.’’ This pass-through of Transend’s transmission costs follows that company’s successful appeal against its pricing determination by the Australian Energy Regulator in 2009.

Changes in Network charges have traditionally been included in the annual pricing announcement but this year has been split from the retail pricing announcement.

Therefore the 1 July increase does not include provision for increased costs in the other components of power bills – such as wholesale energy costs, market and renewable energy charges. According to the Regulator’s timetable, these are currently being determined and will be announced in late 2010.

Changes to tariff rates will be published in Tasmania’s three daily newspapers on Saturday, 26 June.

Released by Aurora Public Relations, 6237 3341

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