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Shock to power supply system: regulator calls for price cuts


Source: The Age, 31 March 2014

After years of waving through electricity price rises with little push-back, the government is finally flexing its muscles and rejecting rises sought by some power companies, instead forcing prices to be cut.

In its first reviews since receiving additional powers, the Australian Energy Regulator - an arm of the competition watchdog, the ACCC - has rejected rises sought by two of the high-voltage electricity transmission companies, TransGrid in NSW and Transend in Tasmania.

Instead, the companies will be forced to cut prices.

TransGrid applied to raise prices 7.4 per cent. But the regulator said it will have to cut prices by 2.3 per cent. Transend proposed to cut prices by 1.7 per cent, but has been told to cut prices 6.4 per cent.

The tougher approach follows changes to legislation finally allowing the AER to push back hard against spending submissions. Previously, the regulator could only quibble with spending plans. But following a sustained public outcry, the regulator was given additional powers to scrutinise spending plans.

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