- The Power Dossier: What you need to know about SA’s power crisis
THE consumer watchdog has given a grim warning to the nation — don’t expect electricity bill relief any time soon.
But Australian Competition and Consumer Commission chairman Rod Sims rejected the often trotted-out line that policy uncertainty was the “key reason” for the current electricity affordability problem.
“This ignores a hell of a lot,” he said.
Mr Sims said the gold-plating of “poles and wires that run down your street are the main reason you’re paying too much for electricity”.
He said these network costs caused 40 per cent of price increases, followed by higher retail costs and margins (24 per cent), generation (19 per cent) and “stunningly generous” green schemes (16 per cent).
“The affordability problems have been a long time in the making, and, unfortunately, they’ll be a long time in the solving,” he said.
“Our retail electricity pricing inquiry team heard stories of Australians having to ration electricity through winter, having to choose between paying medical bills and paying electricity bills.”
It comes as former Prime Minister Tony Abbott fired a warning shot that he would vote against any attempt by his own party to legislate a clean energy target.
Labor and industry has blamed the Government’s lack of action on such a policy for creating investment uncertainty.
Prime Minister Malcolm Turnbull said the Government was considering its policy but it would ensure affordable and reliable energy and meet emissions reduction obligations.
In a speech to the National Press Club, Mr Sims praised the Turnbull Government’s attempts to put downward pressure on prices through asking retailers to ensure households were on the best deals and for its efforts to intervene in the “puzzling” gas market.
He raised concerns that east coast gas exporters, which contributed to pushing up domestic gas prices, were planning to sell Australian gas on the international market instead of at home.
This gave a strong indication the ACCC’s forthcoming report to Treasurer Scott Morrison on the gas market would recommend pulling the trigger on Australian Domestic Gas Security Mechanism to limit exports.
“The Federal Government may be faced with a choice of pulling the trigger on the mechanism, on the one hand, or seeing factories closed and jobs lost,” he said.
“It’s very easy to criticise the Australian Domestic Gas Security Mechanism. It is clearly anathema to anybody with any pro-market inclinations. But consider the choices.
“There have been some transactions, particularly after the Prime Minister called in the gas producers to discuss the crisis … but none of these moves have significantly addressed the situation.”