The Final Report sets out the Regulator’s method for determining the feed-in tariff rate for the period 1 July 2019 to 30 June 2021 and explains each of the decisions made, including the Regulator’s responses to stakeholder comments on the Draft Report.
In determining the feed-in tariff rate, the Regulator has maintained its previous approach of using the ‘avoided cost’ methodology. This methodology aims to ensure that customers with small-scale distributed generation systems (such as solar PV) receive a return for the electricity they export to the grid which reflects the market value of that energy to retailers.
Time-varying Feed-in Tariff
The Treasurer requested the Regulator investigate the merits of introducing a time-varying feed-in tariff in Tasmania and report on its findings either as part of the Regulator's 2019 Investigation or, separately. by 31 December 2019. In light of submissions received on the merits of a time-varying feed-in tariff in Tasmania during its 2019 Investigation the Regulator decide to seek further information from stakeholders, including electricity businesses in Tasmania, and conduct more detailed analysis. The Regulator provided the Treasurer with a separate report on this issue on 28 November 2019.
Formula for calculating the regulated feed-in tariff rate (1 July 2019 to 30 June 2021)
The minimum feed-in tariff rate to be paid by an authorised retailer to a feed-in tariff customer during the term of this Determination is calculated in accordance with the following formula which is set out in the 2019 Regulated Feed-in Tariff Rate Determination:
FiTy = (WEPy x MLFy x DLFy) + AEMOy
FiTy is the regulated feed in tariff rate in c/kWh to be paid to feed-in tariff customers.
y is the relevant period.
WEPy is the wholesale electricity price calculated by the Economic Regulator in accordance with the Aurora Energy 2016 Standing Offer Price Determination (2016 Price Determination), during the annual standing offer price approval process, unless a WEP order is in effect, in which case it is the wholesale electricity price specified in that WEP order in period y, expressed in c/kWh.
MLFy means the load weighted average marginal loss factor at the regional reference node for Tasmania for the relevant period as approved by the Economic Regulator in accordance with the 2016 Price Determination during the annual standing offer price approval process.
DLFy means the load weighted average distribution loss factor for the relevant period as approved by the Economic Regulator in accordance with the 2016 Price Determination during the annual standing offer price approval process.
AEMOy means the forecast charges, as billed by AEMO for market participation and ancillary services fees as estimated by the Economic Regulator in accordance with the 2016 Price Determination, during the annual standing offer price approval process, expressed in c/kWh.
The Regulator released its 2019 Regulated Feed-in Tariff Rate Investigation Draft Report and Media Release on 27 March 2019. The Draft Report sets out the Regulator’s proposed approach to determining the regulated feed-in tariff rate for small-scale distributed generation (such as solar PV) for mainland Tasmania for each of the 2019-20 and 2020-21 financial years.
The Report also examines issues around the potential introduction of a time-varying feed-in tariff for mainland Tasmania.
The consultation period closed on 30 April 2019.
Submissions have been received from:
Tasmanian Renewable Energy Alliance Inc (2Mb)
Aurora Energy Pty Ltd (5Mb)
Notice of intention to conduct a pricing investigation
On 1 December 2018, the Regulator announced its intention to conduct a Regulated Feed-in Tariff Rate pricing investigation. The pricing investigation is to be conducted to gather information to assist the Regulator in making a regulated FiT rate determination.
Matters to be considered
In determining the feed-in tariff rate, the Regulator is required, under the Electricity Supply Industry Act 1995, to consider:
(a) the fair and reasonable value to authorised retailers of electricity supplied to the distribution network by feed-in tariff customers;
(b) the net financial benefit, to authorised retailers, of electricity supplied to the distribution network by feed-in tariff customers, having regard to the costs of authorised retailers, including, but not limited to including –
(i) the costs to authorised retailers of purchasing wholesale electricity; and
(ii) other costs of authorised retailers in operating their retail electricity businesses;
(c) the other costs, or other benefits, that –
(i) include those related to the distribution networks or transmission networks; and
(ii) result, either directly or indirectly, from the supply of electricity to distribution networks by qualifying systems at premises of small customers;
(d) the COAG National Principles for Feed-in Tariff Arrangements, as those Principles apply from time to time;
(e) any arrangements of the Commonwealth, whether legislative or otherwise, in relation to the pricing of carbon emissions or other mechanisms to reduce the use of carbon-emitting fuels;
(f) the principle that the feed-in tariff rate specified in the determination should not have the effect that any customer would effectively be cross-subsidising any other customer;
(g) the possible introduction of a time-of-use feed-in tariff including consideration of costs and benefits; and
(h) approaches, methodologies, findings or recommendations, taken or made in other jurisdictions for determining fair and reasonable feed-in tariff rates.
On 25 February 2019, the Regulator advised stakeholders that its Final Investigation Report will be released, and its Final Determination will be made, on or before 30 May 2019. The timeframes for the investigation were extended to enable the Regulator to examine the issues surrounding the potential introduction of a time-varying FiT for mainland Tasmania. The Regulator has also issued an amended Notice.
The outcomes from the investigation will set out how the Regulator will calculate the FiT rate for each of the 2019-20 and 2020-21 financial years.
The timeframes for the investigation are as follows:
|Description of task||Date|
|Regulator commences investigation||1 December 2018|
|Regulator releases Draft Report and Draft Price Determination for public consultation||27 March 2019|
|Regulator considers submissions on Draft Report and Draft Price Determination||From 30 April 2019|
|Regulator releases Final Report and Regulated FiT Rate Determination||30 May 2019|
|Regulator calculates the Regulated FiT Rate for 2019-20||Mid-June 2019|