The Essential Services Commission said these network charges are passed on to all electricity retailers. It said it was only able to direct AGL SA Pty Ltd to reduce its standing contract prices by this amount: it has no power over market contract prices offered by electricity retailers.

“The Commission would expect that electricity retailers will pass on these changes to consumers, but that will depend on each retailer” said Lew Owens, the Chairperson of the Commission.

ETSA Utilities’ prices are adjusted each July by a formula set out in the Electricity Pricing Order of October 1999. Its average revenue is adjusted by a number of factors, including an adjustment of (CPI minus 2.7)%. The CPI for 2003/04 was 1.9%.

A number of other factors are also considered, including changes in the charges ETSA Utilities pays to ElectraNet SA for transmission services (these charges are set by the Australian Competition and Consumer Commission), and ETSA Utilities’ performance under the Performance Incentive Scheme.

The Commission will publish AGL SA’s standing contract prices resulting from this reduction in network charges later in June, and these will apply from 1 July 2004.