A move which would see more than $1,100 slashed from Territorians' household power bills over the next five years is facing pushback from NT Treasurer Nicole Manison.

Key points: Under a plan proposed by the Australian Energy Regulator, Territory households and small businesses would see bills drop over the next five years

Under a plan proposed by the Australian Energy Regulator, Territory households and small businesses would see bills drop over the next five years Treasurer Nicole Manison is arguing against the changes, calling for the AER to take into account the unique circumstances of the NT's power provider

Treasurer Nicole Manison is arguing against the changes, calling for the AER to take into account the unique circumstances of the NT's power provider The AER will take into account Ms Manison's submission against its proposed cuts to PWC as it deliberates its final determination

The Australian Energy Regulator (AER) has proposed extensive changes which would see Territory energy provider Power and Water Corporation's (PWC) revenue stream cut from a pegged annual $927 million to $760 million.

Much of the savings would be found by trimming the energy bills of Territory consumers.

Under the AER's draft distribution determination, NT residential customers would see an initial cut to their bills of $231 in 2019-20, followed by an annual $32 increase until 2024.

Power and Water's proposed model would see bills drop by $72 in 2019-20, followed by rising hikes of $60 to $70 each year until 2024.

While it would ultimately remain the responsibility of the NT Government to regulate residential power prices, if it followed the AER's structure, Territorians would be paying an average $14,288 on household power bills over the next five years compared with $15,401 under the PWC model.

If it did not follow the AER's determination, the savings may have to be found elsewhere within the organisation.

Small businesses would have a substantial $889 trimmed off their bills in the first year of the AER's determination, versus $277 under PWC's.

"Had we accepted Power and Water's proposal, the distribution component of the average annual residential electricity bill in 2023–24 would increase by about $190 from the 2018–19 level," AER wrote in its draft.

Manison voices concern over cuts

NT Treasurer Ms Manison voiced her concern over the AER's draft determination, which would see Power and Water's "allowance for operating expenditure" significantly chopped.

She has argued against the plan, which she said could be "unsustainable and not consistent [with] Territorians' expectations for safe and reliable power".

Ms Manison said cuts to PWC could lead to "unsustainable" power supply. ( Pexels.com )

"PWC is unique in that it services a small population over a large geographic area," Ms Manison wrote in her submission.

"Given this, it cannot achieve efficiencies from the scale of its operations as is the case for other network service providers."

She also said the Territory's "harsh climate" put pressure on staffing requirements and that the tropical weather "increases prudent maintenance and vegetation management expenditure".

PWC is already cash-strapped, having seen a $40.8 million decrease in its cash balance from $144.7 million in 2017 to $103.9 million in 2018, according to its latest annual report.

Underground power not mentioned

Ms Manison also used the cost burden of power outages triggered by storms and cyclones in her argument against the savings — but nowhere in her submission did she mention the possibility of undergrounding power in Darwin, a pledge made by the Gunner Government following widespread blackouts from Cyclone Marcus in 2018.

"Cyclones and severe tropical storms are frequent events in the Territory and PWC requires sufficient resources to be on-hand and available to respond quickly to restore power," she wrote.

Cyclone Marcus caused significant power outages across Darwin. ( Supplied: Jack Bullen )

"PWC recently had to deal with the challenge of Tropical Cyclone Marcus, which caused extensive damage to the electricity network and resulted in widespread and sustained power outages across Darwin.

"Over 500 line spans were damaged and 28,000 customers … lost power with some customers left without power for 11 days.

"… It is important to ensure that PWC not only continues to be capable of responding to extreme weather events faced in the Territory, but that it can improve its responsiveness."

The AER said the NT Government's move to rollout underground power would further impact PWC's spending, if and when it went ahead.

PWC said it was still "awaiting the NT Government's decision on the suburb roll-out schedule[for undergrounding power]".

"This means we do not have accurate information to estimate how undergrounding will affect our capex program," it said.

In a statement to the ABC, Ms Manison said the Government was "committed to undergrounding and is working closely with PWC to finalise priority areas for its implementation".

"An announcement on this will be made soon," she said.

PWC says its plan seen as 'reasonable'

In a response to the AER's draft determination, PWC said it had faced challenges in trying to engage "customer and stakeholder interest" into the proposed changes.

"Understandably, the estimation approaches for return on debt are an area of arcane detail in the eyes of many of those we engaged with in the NT," PWC's response said.

"Nonetheless … our return on debt was … not rejected by customers, and [was] commented upon as reasonable in our circumstances by one of our largest users."

When asked by the ABC if she stood by her statements considering recently reported high power bills, Ms Manison said her "submission to the AER's determination process sought to ensure that the AER considered the Territory's unique circumstances, which it may not previously have encountered when making revenue determinations in other parts of Australia, to ensure that the Government's objectives of safe, reliable and least cost provision of electricity services is achieved".

"It is important to note that electricity prices for residential customers in the Territory are regulated by the Government and remain one of the lowest in the country," Ms Manison said.

The AER will be taking on new powers to set the revenue from July 1 this year.

After months of negotiations with Power and Water and stakeholders, the AER will make its final determination on PWC's revenue by April 30.