Structure of licence fees for the electricity, gas and water and sewerage sectors

The Office of the Tasmanian Economic Regulator supports the Regulator in undertaking its functions under the Electricity Supply Industry Act 1995, the Water and Sewerage Industry Act 2008, the Gas Act 2000 and the Gas Pipelines Act 2000. Licence fees (or equivalent) enable the Regulator to recover its reasonable costs in the administration of these four Acts where they have not been funded by the Consolidated Fund or the entities directly.

The Tasmanian Electricity Code (the Code) requires the Regulator to develop an electricity licence fee structure that is consistent with a set of principles set down in the Code and sets out how licence fees will be determined.

The structure of electricity licence fees is reviewed periodically. The last review was conducted by the Regulator in early 2017 and applied to the period 1 July 2017 to 30 June 2020.

The Regulator also sets licence fees for gas industry participants and is required to provide advice to the Minister for Primary Industries and Water on the Regulator's component of the licence fees to be paid by water and sewerage industry participants. As such, an outcome of the 2011 review was the widening of the application of the Structure of Licence Fees for the electricity supply industry. That is, the Structure of Licence Fees would document, from that point forward, the methodology that would apply in the determination of licence fees (or their equivalent) in most areas of the Regulator's industry-funded activities.

Current Licence Fees

For the period 1 July 2017 to 30 June 2020

From 1 July 2017, the Regulator will set licence fees in the electricity supply industry and its component of licence fees in the gas and water and sewerage sectors using the methodology contained in the Regulator's Structure of Licence Fees document, as published in March 2017. For further information on the development of the structure of licence fees click here.

Below is a summary of annual licence fees applicable from 1 July 2017 for the three industries:

Current Gas Licence Fees
Type of licenceLicence fee cost/basis for calculation
Gas pipeline licenceVariable fee based on regulatory effort (subject to adjustment)
Gas distribution licenceVariable fee based on regulatory effort (subject to adjustment)
Gas retail licenceVariable fee based on regulatory effort (subject to adjustment)
Gas pipeline (facility) licenceVariable fee based on regulatory effort (subject to adjustment)
Small LPG distributor$50
Small LPG retailer$50


Where a licensee has both construction and operations licences then only one annual licence fee is charged.

The Regulator is able to recover the costs of the Director of Gas Safety through licence fees and then remit those amounts to the Director of Gas Safety. Please note that the above listed licence fees only relate to the Regulator's costs of administration of the Gas Pipelines Act 2000 and Gas Act 2000 (Gas Acts). The licence fee amounts will be increased as necessary to recover the costs of the Director of Gas Safety in administering the Gas Acts.

Current Electricity Licence Fees
Type of licenceLicence fee cost/basis for calculation
Generation - Installed generation capacity of 5MW or lessNo licence fee
Generation - Installed generation capacity of greater than 5MW and less than 30MW.Fixed fee of $5 000
Generation - Installed generation capacity of greater than or equal to 30MW.Fixed fee of $5 000 plus variable component (variable component subject to adjustment)
Distribution (TasNetworks)Distributor will meet Regulator's budgeted expenditure on the distribution sector (subject to adjustment)
TransmissionVariable fee based on regulatory effort (subject to adjustment)
Hydro Tasmania for generation, distribution and retail operations on the Bass Strait Islands (BSI)Licensee will meet Regulator's costs associated with BSI regulatory activities (subject to adjustment)

 
Current Water and Sewerage Licence Fees

Licence fees are determined by the Minister responsible for the Water and Sewerage Industry Act 2008 (the Act) and are an amount that the Minister considers to be a reasonable contribution towards the cost of administering the Act. That amount includes the costs to be incurred by the Regulator in administering the Act, the costs incurred by the Ombudsman in investigating complaints, and the costs that arise from the regulation, by prescribed persons, of activities specified in the licence.

Previous licence fee arrangements from 1 July 2014 to 30 June 2017

 
The Regulator set licence fees in the electricity supply industry and its component of licence fees in the gas and water and sewerage sectors using the methodology contained in the Regulator's ​Structure of Licence Fees document as published in March 2014. For further information on the development of the structure of licence fees click here.

Below are tables containing previous annual licence fees for the three industries

Previous Gas Licence Fees

Type of Licence
Contribution to Regulator's Costs
  • Gas pipeline licence
$10 000
  • Gas distribution licence
$30 000
  • Gas retail licence
$10 000
  • Gas pipeline (facility) licence
$5 000


The Regulator was able to recover the costs of the Director of Gas Safety through licence fees and then remit those amounts to the Director of Gas Safety. Please note that the above listed licence fees only relate to the Regulator's costs of administration of the Gas Pipelines Act 2000 and Gas Act 2000 (Gas Acts). The licence fee amounts will be increased as necessary to recover the costs of the Director of Gas Safety in administering the Gas Acts.

Previous Electricity Licence Fees

Electricity Generation:

Annual licence fees for generators comprised a fixed component, based on installed capacity, and a variable component based on MWh output. See table below for fixed component.

Type of LicenceFixed Component of Licence Fee
  • Installed generation capacity greater than or equal to 30 MW
$10 000
  • Installed generation capacity greater than or equal to 5 MW and less than 30 MW
$ 5 000
  • Installed generation capacity less than 5 MW
No fee


Remaining Electricity Licensees:

​TasNetworks (distribution), the Regulator determined that the licensee would continue to meet the Regulator's expenditure on the distribution sector (subject to adjustment).

  • TasNetworks (transmission), the Regulator determined that the licensee would pay a licence fee of $50 000 (subject to adjustment).
  • Basslink Pty Ltd, the Regulator determined that the licensee would pay a licence fee of $25 000 (subject to adjustment).
  • Hydro Tasmania for its generation, distribution and retail operations on the Bass Strait Islands, the Regulator determined that the licensee would pay a licence fee of $10 000 (subject to adjustment).

Previous Water and Sewerage Licence Fees

Licence fees were determined by the Minister responsible for the Water and Sewerage Industry Act 2008 (the Act) as an amount that the Minister considers to be a reasonable contribution towards the cost of administering the Act. That amount included the costs to be incurred by the Regulator in administering the Act, the costs incurred by the Ombudsman in investigating complaints, and the costs that arise from the regulation, by prescribed persons, of activities specified in the licence.


 

 

 

 


 

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