Cap on distributor revenues proposed -- A boost to renewables

Utility investment in sustainable energy and efficiency may be boosted in the Australian state of New South Wales with a proposal to cap the annual revenues of NSW distributors. The cap, if approved, will force distributors to cut costs and be more efficient, creating a saving of about A$400 million a year, according to the NSW Independent Pricing and Regulatory Tribunal (IPART). The cap is intended to encourage investment in embedded generation, including more renewables, rather than more "poles, wires and substations." The state's Sustainable Energy Development Authority has applauded the ruling for removing barriers to sustainable energy. The current rules have permitted distributors to charge full price per kilowatt hour on energy carried, says SEDA, financially punishing retailers for efficiency gains, since costs tend to be driven by peak demands and not volume. This has threatened to increase consumption.

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