Readers would know about the NSW Gross FIT scheme (SolarBonusScheme) which is for all intents and purposes dead in the water after an explosive 12 months.
The fact that the scheme’s costs to the community were over estimated (by around $1B!) is another story altogether.
And the fact that the scheme was “way too popular” is also another story worthy of consideration.
But todays most intriguing story is that the fact that that the Australian Energy Regulator (AER) has DISSALLOWED Ausgrid (formerly Energy Australia) to pass on the “administrative costs” associated with their role in the program to consumers.
Ausgrid were seeking to recoup (by passing through to consumers) $35.2M.
Now $35.2M sounds like a lot but, it’s spread out between now and 2013-2014 andover Ausgrid’s 1.25M customers (according to their web site). So in reality its $28 per customer or $7 per year. So it’s actually not too bad. Whats even more interesting is that from an equity perspective, IF this cost was spread over ONLY the PV consumers who took up the scheme (in Ausgrids case) it would be $737, or $184 per year. I for one, would not consider that a big impost given the financial benefits I’m getting from my little system.
However what is interesting is the AER’s decision to disallow it. The report is quite complex but in a nutshell they stated that the reason for their finding was “..the AER considers that the introduction of the SBS does not materiallyincrease the costs, as specified in Ausgrid’s application..” In other words, in the grand scheme of things, the cost of administering the scheme was not material enough to pass on.
They also commented that “..Ausgrid’s proposed expenditure was not efficient in all respects. In particular, EMS made recommendations that some costs associated with the time taken for internal staff to perform certain functions (including labour overheads), communications with service providers, unit costs for meters, meter data substitution, incremental meter reading, data validation and ongoing scheme management may not have been efficient.”
In other words, they spent too much on some activities and this was not found to be 100% justified. Tabulated costs from Ausgrids report follow:
A breakdown of the costs by percentage follow:
Now to be clear – this is in addition to the costs of the FIT (another story) AND in addition to that which Country Energy and Integral Energy plan to claim (yet another story – they haven’t claimed yet).
What will be most interesting to understand is what happens now? Ausgrid will have to bear the costs - and Ausgrid are State owned – so we will all still pay for it.
And what of Country Energy and Integral Energy who are yet to submit a claim?
Just how these costs will be borne remains to be seen. The good news is they are not the ” massive impost on NSW electricity consumers” which the fear campaigners would have us believe. I also think it’s good news that the AER is challenging both the actual cost and the cost recovery methods.
The bad news? More uncertainty…
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