SUBMISSION ON ELECTRICITY TARIFFS AND RESTRUCTURING
OVAC records that, despite repeated requests for critical supporting information and
clarification, key aspects of the proposed electricity tariff structure remain unclear. While a Cost
of Supply (COS) study has been provided, uncertainty remains regarding its status, underlying
assumptions, and certain statements contained within it. As such, we are unable to meaningfully
assess the proposed tariffs against accepted regulatory principles. Given that the deadline for
comment has now been reached, we cannot delay this submission any further.
OVAC further notes that a request was made to meet and engage constructively on
electricity-related matters. While certain correspondence was responded to, this request for a
meeting was not addressed.
Based on the information currently available, OVAC raises the following concerns:
- The proposed restructuring appears to have a disproportionate and regressive impact on low-consumption and vulnerable users, as well as on properties with little or no electricity usage (including vacant homes), which would face materially increased fixed charges;
- The structure also appears to have a significant negative impact on solar users, potentially disincentivising private investment in embedded generation and energy efficiency;
- The complexity of the tariff and billing structure is excessive and undermines transparency, making it difficult for consumers to understand, verify, or predict their electricity costs;
- Due to the uncertainty surrounding the COS study, it is not possible to confidently assess whether the tariffs are cost-reflective, revenue-neutral, or cross-subsidised in a rational and defensible manner; and
- An alternative tariff approach, aimed at improving simplicity, transparency, and equity, has been proposed but has not been meaningfully considered or responded to.
In its current form, OVAC cannot support the proposed electricity tariff structure. A compliant
and defensible tariff framework requires clarity on the status and application of the COS study,
full transparency of assumptions, and a structure that is equitable, understandable, and aligned
with sound regulatory principles.
This submission is made without prejudice to OVAC’s objection to the public participation
process and reservation of rights.
Yours Sincerely
Anton Kruger
OVAC”
