Electricity networks propose connection fees for all homes – including off-gridders

Australia’s major power networks are calling for compulsory connection fees for all homes and businesses – even if they are not connected to the grid – and penalties for those who disconnect, as part of a last-ditch effort to protect their declining revenue streams.

The Energy Networks Association says the proposals are deliberately calibrated to stop people from leaving the grid, and thereby triggering what is often described as the “death spiral”, as networks seek to recover lost revenues from those consumers who remain.

The shift from centralised generation to a decentralised grid based around solar and storage is seen as inevitable, and many analysts say that networks will have to change the way they do business, or even write down the value of their assets.

But the networks are digging in, refusing to countenance write-downs, and now want consumers to pay for the networks whether they use them or not. Alternatively, they want any households that leave the grid to pay their “historic” share of grid capacity as a penalty for leaving.

Grid defection is likely to become a real option for many consumers, because of the huge falls in the cost of rooftop solar PV, and the falling cost of battery storage. Soaring network fees and rising fixed charges is reducing the pay-back for solar-only installations, but is likely to encourage more battery storage.

As well, many households currently receiving high solar tariffs – such as the 160,000 households in NSW – are looking to battery storage to avoid the situation where they are exporting their solar power back to the grid for little or no compensation.

To try to stop this, the networks have presented five options to try to shore up the revenues of the networks, including: Higher fees for connection to the grid; exit fees for leaving the grid (equivalent to a customer’s “historic share of network capacity”); compulsory “rates” style fees for all homes and businesses regardless of whether they used the grid or not; increased network charges to “compensate for future stranding risks”; offer tax advantages such as faster depreciation.

The proposals are likely to be fiercely resisted by consumers, consumer groups and the solar and battery storage industry.

Already, the industry is complaining that higher fixed charges, and the introduction of “demand tariffs” in some states are part of a deliberate ploy to make the uptake of rooftop solar unattractive.Inline image 1

“Rather than recommending a revision of the business model to direct their massive capital and other resources to maintain and grow their business through a distributed renewable energy future they recommended to stand and fight – put up the barriers top protect what they have – with consumers be damned!” said Steve Blume, from the Australian Energy Storage Council.

“The ENA is taking that same path – making recommendations that are anti-consumer, short-sighted and wrong-headed for its business members too.

© 2015 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson