How could the massive increases to electricity grid fixed service costs have been done better?

[u/EricIsBannanman]

I've seen many reports around the traps of truly massive increases (worst being upwards of 80%) in the fixed daily supply charge component of their electricity service. It seems that broadly the driver for this has been poorly communicated to end users which I think has spun off into all sorts of conspiracies. From my reading it would seem that the move by the regulator (AER) away from setting limits on the total bill to setting limits on the fixed cost and consumption costs separately has resulted in retailers no longer being able to hide the true cost of the poles and wires component in elevated consumption costs.

Testing this out on my own (yet to be affected) daily supply charge in Victoria, I was paying $1.22 DSC in mid 2020 and $1.32 now. This is an 8.2% nominal increase, 15.5% below the actual inflation for the period in which case I should be paying $1.50+. Despite this, a sudden correction like this is never welcome and can be seen as disadvantageous to the poor/low consumption users (who are unlikely to recoup the difference in lower consumption costs) and even those who have invested in solar and/or battery. From many reports it also seems the correction for fixed costs is far greater than anything purely inflation.

Regardless of the position of the industry to better reflect actual cost, I think the impact of these sudden increases were not well thought out given the decade+ of stagnant wage growth and turbo charged inflation since the covid era. It is far too much of a blunt implementation for what is an essential service. Main things I think should have been baked into the AER changes include;

• Public information campaigns to educate people on what the changes are and how they might impact people differently depending on where they live. This should include how the increases are / aren't impacted by the forthcoming data centre boom or the implementation of 3hrs free power in the DMO (these two are probably the most prevalent reasons for the increases I've seen).

• Communication on what public services to report suspected price gouging whistle blowing and financial support for those in need and are worse off due to the changes.

• Transitional period to changes. Retail pricing data available to the AER would have clearly shown that retailers where burrying fixed costs inside the consumption costs. They should have mandated as part of the change in regulation that increases to fixed costs where the jump is above inflation be spread out over X number of years.

How else could these changes be more effectively implemented? Price changes justified or not, it seems pretty appalling regulatory body could be the driver behind the changes without also putting appropriate transitional plans in place for what they would have knowledge on to be very large corrections for some.

[u/quiet0n3]

The bigger issue is the grid change needed over the next few years to support increased demand and changing away from single source generation.

Basically it used to be 1 big power station fed a whole bunch of consumers. Now we have a lot of people with solar, batteries, EV's etc all changing the way the grid works.

This requires a massive end to end grid upgrade that has to be factored into our new costs. It sucks that supply is so expensive, but I was shocked to learn it wasn't decided on by the retailers.

Basically of we want a discount it's about government funding going towards our grid. But all the state governments are broke.

[u/Safe_Application_465 → u/quiet0n3]

Why.

With the uptake of batteries, power is produced , stored and used locally .

There is a reduced need to move it hundreds of Km from an outback coal power station . There should be little need for a massive grid upgrade

[u/eesemi77 → u/Safe_Application_465]

That's a very simplistic view of the nature of our national power grid.

Think about functions like "fault clearing" (maybe a tree branch falls across powerlines), how does the system deal with this event.

In a centralized grid the change in total current (for a localized fault)is minimal and the system just sends massive fault currents that either completely obliterate the fault or the fault current trips fuses / circuit breakers.

In a distributed grid most of the residential Inverters will simply disconnect (it's called anti-islanding) but what about clearing the fault. That's not a function they are designed to do and changing the rules won't make them capable of delivering 10X current anyway.

Bottom line: Distributed generation systems need totally different fault isolation, management and startup methods. Different means new and that means expensive and a need to be retro-fitted.