In a surprising move Hawkes Bay based distribution company Unison Networks have notified it’s 110,000 customers of significant price increases for those who want to grid- connect their generation systems after April 01.
In a move clearly aimed at stalling the growth of solar PV, Unison has created a new tariff category for distributed-generation (DG). The new structure includes an increased fixed daily charge of over 50% for those who consume >8000kWh/yr. For customers who use less than 8,000 kWh/yr, there are increases in consumption charges with the cost/kWh increasing 25-30%, plan dependent. Added to these prices will be the additional cost of implementing the new pricing by retailers which are yet to be revealed.
Although this new pricing structure will be subject to scrutiny by the Electricity Authority (EA) and Commerce Commission (ComCom), the EA, at least, has signalled they support a change to pricing if distributors wish to slow the uptake of solar PV. The EA is currently reviewing distribution pricing impacts from new technology like solar PV through its recent consultation with industry and is under pressure from all sides in the industry to resolve uncertainty which allows any or all of the country’s 29 lines companies to make changes such as those announced by Unison. The EA has encouraged distributors to adopt ‘service-based pricing’ however Unison’s new tariffs are surely not what they envisaged. It must be questioned why Unison adopted this position without waiting for the outcomes from EA later this year. With Unison actively commissioning solar PV themselves, maybe they have just revealed their long term strategy around dealing with new technologies like solar PV and storage.
It is hardly likely that retailers will be happy with the introduction of another four lines charge categories since they have already been highly critical of the plethora of lines charges that they currently have to deal with. If other distributors follow this lead, producing their own variation of distribution charges, we could quickly see another hundred or so pricing options for retailers to deal with. This is another reason for EA to take action, and quickly.
SEANZ view is that the present distribution charging regime is inadequate for the future vision of an efficient, responsive energy system because the variable cost of supply (particularly capacity) is insufficiently targeted. Variable time-of-use (TOU) tariffs are the fairest and most efficient pricing mechanism. Since electricity costs are strongly time dependent, changes to pricing should improve the ability of the consumer to respond to clear TOU pricing signals.
Unison’s new pricing does nothing to reduce peak demand by consumers, providing no incentive for them to do so. Unison's new pricing structure unfairly singles out distributed generation, particularly solar PV prosumers, for increased pricing when a range of new technologies are having greater impacts on the electricity demand. Heat-pumps, LED light bulbs, wood-burners, and gas, also reduce consumer demand on the electricity network in a similar manner to solar PV. A well-designed TOU pricing regime will be technology-neutral rather than single out consumers with a single new technology to subsidise those with others.