Consumers will face further rises in the cost of electricity under NSW Government plans for the State’s generators.
The Public Interest Advocacy Centre (PIAC) has warned that plans for two private power stations in NSW will lock in higher electricity prices for years to come.
Consumers around the world have seen that private suppliers are more costly than public investment, said Jim Wellsmore, Senior Policy Officer with PIAC. The Government has committed to private investment knowing what this means for NSW households.
Government officials have claimed competition in the electricity industry will keep prices down. PIAC rejects this view and points to the experience of the private power industry interstate.
Private investors need higher prices before they invest, said Jim Wellsmore. Having spent money on a power plant a private firm will want to keep prices high to ensure its profit. That’s why power prices have risen so far in Victoria and South Australia.
PIAC is concerned that the Government may be prepared to weaken its current policy of protecting households from the impact of the national electricity market. Currently prices for most consumers are set by an independent regulator. The Government evens out the prices for generators and retailers through a special fund.
A lot of NSW households will see a 10 percent rise in their prices this year alone, said Jim Wellsmore. Now the Government is talking about ‘loosening’ price controls. We would like to know how much further prices will rise under this plan.
PIAC is critical of the view that Government funds should not be spent on new electricity generation. They point out that any investment, public or private, will be paid for through higher consumer prices. Government involvement would limit the extent of future price hikes.
The Government needs to do more on community consultation, said Jim Wellsmore. Consumers will be paying for these new power plants. Waiting for a Green Paper sounds like we are to be given a fait accompli.
MEDIA CONTACT: Dominic O’Grady, Media and Communications Officer,
Public Interest Advocacy Centre. Ph: 02 8898 6532 or 0400 110 169