Tasmanian Farmers and Graziers Association
Tasmanian Farmers and Graziers Association

TasNetworks Electricity Distribution Regulatory Proposal Issues Paper

The Tasmanian Farmers and Graziers Association (TFGA) is the leading representative body for Tasmanian primary producers. TFGA members are responsible for generating approximately 80% of the value created by the Tasmanian agricultural sector.

The total Tasmanian gross state product (GSP) was $23.9 billion for the 2012 year. The GVP of agriculture, forestry and fishing collectively amounted to almost 9% of this total – before input supply services and value-adding, which is well above that for the nation as a whole.

The TFGA is grateful for the opportunity to make comment to the Australian Energy Regulator issues paper on TasNetworks electricity distribution regulatory proposal, 1 July 2017 to 30 June 2019.

TasNetworks Proposed Revenue:

We are surprised to see that TasNetworks proposed revenue is to translate to annual distribution price decrease for consumers over the 1 July 2017 to 30 June 2019 period.

With the current energy crisis in the State, due to the lack of water storage and issues with the Bass Link cable, this has seen the major consumers of electricity (industrial users) drastically reduce production and thereby reducing their electricity usage. Even with big rainfall events from now till July 2017 the storage levels will still be low, which means importing power from the mainland at a premium price.

The TFGA requests contingency figures are considered to access what the revenue could be if the ongoing crisis is extended and the impacts this will have on expenditure and the distribution price going forward.

Customer Engagement:

The distribution network serves the following customer groups:

  • residential, comprising nearly 239,000 customers or 84 per cent of the customer base and approximately 45 per cent of the electricity delivered by the distribution network;
  • small business, commercial and industrial, comprising approximately 15 per cent of the customer base, but consuming approximately 54 per cent of the electricity delivered by the distribution network; and
  • unmetered supplies, which include public lights; electric fences; public telephone boxes; and traffic signals.

Our members fit within the small business category, being a smaller customer based, but a larger consumer of electricity.

As stated in the TasNetworks, regulatory proposal 2016, Tasmania has been divided into 101 supply reliability communities, each of which is categorised into one of five supply reliability categories. Reliability in a number of communities has not met the target standards in the last two years, predominantly due to a number of major event days and other weather events. The table below shows the number of communities that effect our member performance – measured by the average outage duration for each customer served (SAIDI) – has fallen below the required standard set by the Code over the last five years.

Supply Community

Standard (minutes)

2010-11

2011-12

2012-13

2013-14

2014-15

High density rural

600

2

3

4

11

13

Low density rural

720

9

6

6

14

12

One of the complaints TFGA receives from its members is the time it takes for power to be reinstated following a power outage, especially from those members who need power at critical times of the day or night – these rural sectors include chicken meat growers, dairy farmers and cold room storage (vegetables, fruit, and flowers).

The TFGA would like to see an avenue for farmers who require power to be reinstated sooner during a power outage.

Proposed Network Tariff Strategy:

TasNetworks are proposing moving network tariffs towards time of use demand based pricing to encourage customers to shift demand from peak to off-peak periods. The network tariff strategy has two initial phases:

  1. Transitioning existing consumption based network tariffs to be more cost reflective.
  2. Offering demand based network tariffs as a choice for customers.

As a sector we believe this to be a good option to consider based on the agriculture sector being one large customer. An agriculture network tariff, based on peak and off-peak demand period, should be considered as part of the TasNetworks proposed tariff strategies.

Metering:

The recent rule change by AEMC regarding, expanding competition in metering services, says that it will provide customers with the opportunity to benefit from advanced metering. TasNetworks recognise this change and have noted that any particular arrangements that may apply in Tasmania are not yet confirmed.

The TFGA are questioning the capital charge to the customer, if they need to upgrade or wish to replace an existing meter with an advanced meter. We see that the upgrade will benefit both parties, especially in relation to rural customers, where the technology should assist the reading of the meter off farm. Less travel and time spent by meter readers going on farm.

The TFGA doesn’t support farmers being charged for an advanced meter, when these meters start rolling out across Tasmania.

The TasNetworks electricity distribution regulatory proposal needs to take into account the damage of the current dam levels and the cut Bass Link cable will have on the future generation of electricity for Tasmania and the impacts to the price charged for electricity. Our members are concerned of the potential price increases, if TasNetworks doesn’t consider the effects of the crisis over the July 2017 to June 2019 period.