Electricity prices are shocking – and that’s no joke | Image: FelixMittermeier
Annual residential electricity bills have jumped 44% in real terms since 2007-08 and commercial users are paying 53% more per kilowatt hour says a report released today by the Australian Competition and Consumer Commission.
The ACC has published a preliminary report on its inquiry into retail electricity pricing. It highlights the Commission’s concerns regarding the operation of the National Electricity Market (NEM), which it says is resulting in serious affordability issues for households and businesses.
“It’s no great secret that Australia has an electricity affordability problem,” said ACCC Chairman Rod Sims said. “What’s clear from our report is that price increases over the past ten years are putting Australian businesses and consumers under unacceptable pressure.”
The primary driver of electricity price hikes isn’t solar rebates and other green schemes says the ACCC. A major culprit has been significant increases in network costs.
The ACCC states an average residential bill in 2015-16 was made up of:
- network costs (48%)
- wholesale costs (22%)
- environmental costs (7%)
- retail and other costs (16%)
- retail margins (8%)
While recommendations for NEM reforms will be in the final report to be provided to the Treasurer in June 2018, the Commission has made some suggestions in the preliminary report that it says could be immediately implemented by governments.
The ACC has invited written submissions in response the preliminary report, which can be downloaded here (PDF). At 176 pages, be prepared for a lengthy read. Submissions are due by 17 November 2017.
Mr. Sims also hit the headlines today in relation to another matter – that of the Clean Energy Target (CET) as recommended by the Finkel Review.
“We don’t judge that it will have that much of an effect on affordability,” Mr Sims told ABC AM. “He’s making an argument which is a fair one to make. I’m just saying in any modelling you’ve got assumptions.”
While not constituting a recommendation to not adopt a Clean Energy Target, ABC’s Tom Iggulden says the statements will deliver a “death blow” to the CET, which will be music to the ears of the likes of Tony Abbott.
About Michael Bloch
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I remember when our government sold of ETSA saying it would create more competition and better prices, what they did was sell out Australians and got paid handsomely to do it…..As if its not hard enough to make a living in this economic climate, no doubt its the last straw for some businesses out there.