NSW Electricity Infrastructure Roadmap renewable energy zones to increase annual power bills by as much as $58 per household
NSW is rolling out five renewable energy zones. So far one project is producing power. But already, administration costs of $110m have been foist on NSW households and small businesses via electricity bills. And that’s just the start.
NSW
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NSW households and small businesses struggling to pay soaring electricity bills face forking out more than $340m extra next financial year to cover administration and other costs for renewable energy zones.
The Daily Telegraph can reveal this hidden burden on consumers – which could increase annual bills by as much as $58 – is funding the operations of seven different state and federal government entities including three regulators.
The new slug follows a $138m levy this financial year for the renewable energy zone (REZ) scheme, called the NSW Electricity Infrastructure Roadmap.
In discussions with Macquarie Street, consumer advocacy groups have been arguing that the burden shouldn’t be entirely on the shoulders of householders and that big users such as smelters and mines should contribute too.
The Telegraph has learnt that this argument has proven persuasive.
A state government spokesman said there will be an official review into “whether transmission connected businesses should be included in the cost recovery mechanism.”
The Public Interest Advocacy Centre has been among those pushing for change.
“There is a lot of opportunities to revisit those cost recovery mechanisms to make it fairer for households,” said PIAC energy spokesman Douglas McCloskey.
Of the nearly $500m in REZ costs approved so far, more than $110m is for administration expenses of the seven government entities.
The scale of this cost was questioned by Energy Networks Australia, which represents power distributors.
“In this whole transition, I think we can all agree we need less red tape and more focus on getting the job done,” said Energy Networks Australia CEO Dom van den Berg.
The Australian Energy Regulator this week called out REZ costs as a leading source of upward pressure on NSW power bills, along with high interest rates and inflation.
About $6m of the REZ money raised through customer bills will go to the AER.
In the Essential Energy distribution zone, which covers most of the state, REZ expenses are expected to add about $25 to annual bills in 2024-25 for a household using an average amount of electricity.
In the eastern half of Sydney, Central Coast and Hunter, which is managed by Ausgrid, is believed to be a similar amount.
Endeavour Energy – which runs the network covering western Sydney, the Blue Mountains and Southern Highlands – did not provide a figure. But The Telegraph understands it could be as high as $58 next financial year.
These operators are obliged to recover renewable energy zone expenses through customer charges. They do not keep it.
REZ costs recovered through consumer bills in 2024-25 are 147 per cent higher than in 2023-24, which was the first time households were levied. The project will run for 20 years.
The NSW government spokesperson said “the 2024-25 contribution determination reflects the significant progress that is being made to roll out the NSW Electricity Infrastructure Roadmap, and to deliver a more reliable and affordable source of electricity for every electricity consumer across the state.”
The spokesman initially said three REZ projects were producing power. That was later revised down to one, in the New England zone.
Owners of Italian eatery, Bottega Manly, Francesco Procopio and Lou Soglimbene are expecting to be hit with hefty electricity bills in the near future.
“We’ll need to wait and see what happens. I can see in the long term how renewables would be great, but it’s certainly not an immediate help, by the time we get to the future it may be too late” for some other businesses, Ms Soglimbene said.
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