Households and businesses in South Australia will see an increase in electricity network charges of 14 per cent next financial year followed by 6 per cent in the four years to 30 June 2015.

The Australian Energy Regulator (AER) yesterday released its draft determination on the costs that South Australian electricity distributor ETSA Utilities will be able to recover for the provision of electricity distribution services over the period from 1 July 2010 to 30 June 2015. Electricity distributors charge fees to your energy retailer to deliver electricity to your home or business premises – these fees are passed on to end consumers and businesses in the form of higher electricity supply charges and usage charges.

The AER states that network charges represent roughly 40 per cent of the power bills paid by consumers, meaning that the average residential customer in SA would see annual electricity bills rising by $77 (around 5 per cent) in 2010-11 and by around $40 (approx. 3 per cent) each year thereafter.

The reasons for the AER’s decision to approve such hefty increases relate to increased investment required to support both a growing population and increases in peak demand, as well as general increases in costs.

You can read the AER draft determination here. Interested parties are invited to provide written submissions on the AER’s draft determinations and the Queensland electricity distributors’ revised regulatory proposals by 16 February 2010. The AER will make its final decision by the end of April 2010.