The Western Australian government has reportedly shelved plans to introduce higher network fixed charges to recoup some of the revenue displaced by the state’s 175,000 solar households.
As reported in RenewEconomy in March, WA had been pushing to overhaul electricity tariffs so that households – and particularly those with rooftop solar – paid significantly more in fixed charges.
The measures were designed to address declining revenue caused by falling electricity demand, due to increased energy efficiency and upwards of 175,000 households in the state installing solar.
But the West Australian reported yesterday that the government has shelved these plans, leaving the fixed cost component of electricity bills at about 15 per cent.
The decision would come as a relief to the solar industry, which had warned that the changes would discriminate unfairly against solar households.
“If you started charging solar households for connecting panels to the network, you would have to start charging people for using LED light globes, because the effect on grid demand is the same,” said Ray Wills, from Future Smart Energy.
Wills said the same should also apply to users of air conditioners.
As we noted in March, the WA government has been seen to be stuck “between a rock and a hard place” on electricity, because the true cost of the grid has never been passed on to consumers.
With an almost entirely fossil-fuelled grid, the state currently subsidises the cost of electricity to consumers to the tune of more than $300 million a year.
Last year, it required more than than $620 million to bridge the difference between the cost of generation and delivery of its ageing coal and gas infrastructure, and the price it charges to consumers.
State energy minister, Mike Nahan, the former chief of conservative think tank Institute of Public Affairs, has previously told parliament that, if introduced, a higher fixed charge would apply across the board.
“If we increase the fixed charge and decrease the variable charge, they [solar users] might be [facing higher charges],” he said. “The balancing act hasn’t been decided. It’s premature to say that re-balancing will discriminate against solar cell owners.”
But while the Nahan and Co appear to have backed away from this reform, the West Australian reports that the government will instead allow retailers to offer their own tariff structures when the market is thrown open to competition in coming years.
Nathan, meanwhile, says his government will continue to work on how to best address the issue.
“There is still a long way to go but we think there is a better way to tackle this, one that is more innovative, more equitable and one that fits in with technological changes in the future,” he said.
Any changes to electricity fees and charges would be outlined in Thursday’s State Budget, Nahan said.
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