Competitive power will drive price down

AN interim report by the Australian Competition and Consumers Commission (ACCC) has found deregulation of Australia’s retail electricity markets is not the main driver of higher bills.

The detailed review by the ACCC found a range of factors have contributed to steeply rising power bills over the past decade, and in the last year particularly, as a result of marked increases in wholesale prices.

Australian Energy Council Chief Executive, Matthew Warren, said the report did not reveal electricity retailers were making inflated margins as has been recently
claimed.

“The ACCC report found competitive pressure between electricity retailers has not yet reduced operating costs, but their net margins have remained flat.

“Retail margins have actually fallen in Victoria as a share of residential bills since 2007-08,” Mr Warren said.

“The answer still lies in making competitive retail electricity markets work better for customers.”

Mr Warren said the data in the interim report highlighted a key to this is sustained new investment in generation to address the worsening supply-demand imbalance in Australia’s electricity supply.

“For a decade now we have not managed the growing carbon risk that is impacting investment in new generation in Australia,” Mr Warren said, “until we do, the electricity prices are likely to increase and reliability will
deteriorate.

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