The pricing proposal goes into detail about how each network tariff is set, the mathematical formulae behind each tariff, metering charges, ancillary network services, public lighting and customer impact.
How will it work?
Each new tariff class is allocated to a customer for direct control services based on:
- A customer’s connection to the network (high or low voltage, metered or unmetered)
- Extent of a customer’s usage (above or below a specified level of consumption per annum)
Why are pricing proposals necessary?
Every four years, networks submit a methodology for calculating prices to the AER. The various options within the methodology enable power to stay safe, reliable and sustainable for customers, taking into account:
Methodologies for pricing vary by network. For example, one network may specify a location-based methodology to allocate prices, while another could allocate prices by the cost to service a customer. The latter is called cost reflective pricing.
Ultimately, each network calculates pricing to be transparent, equitable, predictable and efficient.