Are electricity prices in Australia being driven by an excessive tax allowance?

Are electricity prices in Australia being driven by an excessive tax allowance?

AU Energy Compliance
The Australian Energy Regulator (AER) recently announced a review on how much estimated tax it will allocate when making revenue decisions for network businesses.[1] This is, in part, a recognition that network costs have been the key driver of rising electricity prices over the last decade or so.[2] As part of that review, AER has released an issues paper for consultation. We summarise this below. By Dr Drew Donnelly, Regulatory Specialist, Compliance Quarter Estimate of tax payments When setting revenue allowances for network businesses (i.e. deciding how much revenue monopoly distributors are allowed to make), the AER estimates expected tax payments for electricity and gas distributors. By reviewing the current approach to estimating tax, the end result may change the total revenue allowance for network businesses, and thereby contribute to…
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