Big cuts to NSW power bills as death spiral looms

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From the AFR:

NSW power customers will see their power bills fall 10 percent, more than after the scrapping of the carbon tax, thanks to a landmark regulatory decision that reins in “gold plating” at electricity networks. AER chairman Paula Conboy said: “We estimate that our draft decisions, if implemented, would reduce annual electricity bills for a typical residential household living in NSW, on average, by $219 (10 per cent) in 2015–16. The AER decision will force the networks to slash costs to adjust for the slower growth in power demand and lower financing costs. Capital expenditure will be cut by between 35 and 33 percent, compared to what the companies were planning, and operating expenses by between 22 and 35 percent. “The demand for electricity is falling which puts less strain on the networks and requires less investment to provide a reliable supply of energy.

I can’t provide any more at this stage because the Australian Energy Regulator (AER) site is down. But, basically, this is designed to address the following, from the Garnaut Review: fig11.1

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.