Australian consumer groups urge regulator to slash energy network costs

A coalition of consumer, small business, and social sector groups is urging the Australian Energy Regulator (AER) to reduce the Rate of Return Instrument. This instrument determines the amount energy users pay to cover network infrastructure costs, such as poles, wires, and substations.

Brendan French, chief executive of Energy Consumers Australia, stated that approximately one billion dollars of consumer funds are being lost to the energy network. He argued that the AER must prioritize consumers over the profits of energy networks. Similarly, Cassandra Goldie, chief executive of the Australian Council of Social Service, noted that energy networks continue to see significant profits while many citizens struggle with inflation and basic necessities.

The AER is currently reviewing the instrument and accepting submissions, with a final decision expected in December. While the regulator's draft proposal addressed some of the premium, advocacy groups argue it does not go far enough to alleviate cost-of-living pressures.