This graph explains what makes up the cost of electricity price for regulated tariffs in 2012-13.
Regulated tariff electricity prices are set by the Office of the Tasmanian Economic Regulator (OTTER).
Aurora buys electricity from Hydro Tasmania, with contributions from our Tamar Valley Power Station and some imported energy from the mainland. Government regulations set the process that the Tasmanian Economic Regulator uses to determine the price that Aurora pays for electricity.
5.8% Carbon price
Government regulations require the Tasmanian Economic Regulator to estimate the carbon component of the price that Aurora pays for electricity.
For 2012–13, the Tasmanian Economic Regulator has estimated that the introduction of the price on carbon will increase power prices by 5.81%.
4.8% Renewable Energy Certificates
This charge represents the cost to Aurora of complying with its obligations under the Australian Government's Small-scale Renewable Energy Scheme (SRES) and Large-scale Renewable Energy Target (LRET). The SRES and LRET are part of the Renewable Energy Target (RET). The RET is designed to deliver on the Government's commitment that the equivalent of 20% of Australia's electricity will come from renewable sources by 2020.
0.4% Market charges
These charges are the cost to participate in the National Electricity Market. The fees are paid to the Australian Energy Market Operator (AEMO) on your behalf by Aurora.
High voltage transmission is the responsibility of Transend. Electricity is converted into lower voltage from where it is generated through transformers to Aurora's distribution, or 'pole and wires', network. The Australian Energy Regulator sets the prices that customers pay to use the transmission network and ensures compliance within the National Electricity Law and Rules.
This is the cost for Aurora's Distribution Business to operate and maintain more than 22,000km of overhead wire and underground cable that connects the transmission network to customer premises. The Australian Energy Regulator sets the prices that customers pay to use the distribution network and ensures compliance within the National Electricity Law and Rules.
The Tasmanian Economic Regulator determines the maximum amount that you should pay for retail services including billing, account management, call centre costs and a retail margin. The retail margin compensates Aurora's retail arm for its investment in the business and for the risks it takes in providing electricity services to you.
What impact does carbon have on the new electricity tariffs?
While Tasmania's electricity supply is sourced mainly from renewable sources, the introduction of the carbon pricing mechanism will still have an impact on Tasmanian electricity prices.
As Tasmania is part of the National Electricity Market, we rely on importing electricity from Victoria via Basslink. The electricity imported into Tasmania comes from electricity generators that have higher emissions based generation (eg brown coal) which will be subject to the carbon price. Aurora also sources power from the gas-fired Tamar Valley Power Station which is also subject to the carbon price.
Because some electricity consumed by Tasmanian regulated customers comes from carbon-emitting generation, our electricity prices have increased although not as much as in other states where power is generated predominantly from coal and gas.
The Tasmanian Economic Regulator has estimated that the price on carbon will increase the power prices paid by Tasmanian regulated customers such as 'mums and dads' and small businesses by 5.81% from 1 July 2012.