How our pricing works
Like most energy distribution network businesses in Australia, the prices we charge are regulated.
Our revenue is approved in five-year cycles by the Australian Energy Regulator (AER) and in the build-up to each new term, we submit a proposal to them which outlines our plans for the regulatory period and how we expect to fund them.
Our 2021-26 Plan
Our Plan aims to keep energy affordable while maintaining reliability, safety, and preparing the network for the future, and was developed to ensure it meets the needs of our customers, particularly given the impacts of COVID-19 on Victorians.
With more customers working from home due to COVID-19, reliability is more important than ever, and preparing the electricity network to support increased use of renewable energy was also a top priority for customers.
We present this Plan to the AER for their consideration and for them to approve the revenues our business needs to operate a safe and efficient electricity distribution network.
What we will deliver over the 2021-26 period
The Regulator’s decision
On 30 April 2021, Jemena welcomed the AER’s Final Decision on its regulatory proposal for the 2021-2026 period. The AER confirmed that from 1 July 2021, the amount charged for electricity distribution services and smart metering services via the Jemena Electricity Network (JEN) in Melbourne’s North-West will fall. The electricity distribution and smart metering charge typically make up 35 percent of a residential electricity bill.
A typical JEN residential customer will save $158 (7%) over the next five years. The savings for small and large commercial customers will be approximately $321 (5%) and $6,972 (5%), respectively over the next five years.
In addition to cost savings, the Final Decision will allow us to deliver customer benefits through technology innovations and prepare the network for the future, including:
- Connecting over 37,000 new residential customers and 500 business customers
- Replacing or reinforcing over 7,300 electricity poles
- Facilitating the connection of over 110 MW of new renewable energy generation
- Adding 60 MWh of new battery storage capacity to the grid
- Investing in new technology to prepare the network for the future
Our 2021-2026 Plan for JEN was compiled following extensive feedback from more than 105 hours of customer engagement over a two year period. In the three years leading up to the 2021-2026 plan period, we consulted with our customers across Melbourne’s North-West to gather their feedback and help shape our proposal.
To ensure customers had the opportunity to influence electricity distribution costs over the next five years, we assembled a ‘People’s Panel’, comprised of a cross-section of our JEN customer base.
We held several highly collaborative and engaging sessions with our People’s Panel. These customers met with members of our Board and Leadership Team, other senior managers and staff, to have the opportunity to have their say on issues they told us were important to them. It was a consultative and inclusive process from beginning to end and led to our Plan being ultimately supported by our customers.
To watch the Jemena People’s Panel engagement video, click here.
Keeping costs down and planning for the future
During consultations, customers highlighted that affordability of energy was a pressing issue, and through our Plan, we are doing our bit to bring down costs to ensure we deliver price reductions over the next five years.
Some steps we will take to keep electricity affordable for our customers include:
- Making replacement decisions based on the condition of assets rather than to a fixed timescale.
- Spending money to prolong the life of existing assets rather than purchasing new ones, where it is cost-effective to do so.
- Introducing changes to network tariffs that reward customers who take steps to manage their usage.
We are also proposing to deliver more sustainable energy across our network by testing out new technologies, including investment to increase the amount of renewable energy that can be fed into the grid and demand response to manage peak consumption across the network.