A
coalition of NSW consumer groups is calling on the Australian Energy Regulator
(AER) to stand firm amid mounting pressure from the NSW electricity networks to
increase prices for consumers.
At a
forum today, the AER will
explain its draft decision to reduce the proposed operating and expenditure
costs of these businesses by more than a third for 2014-19, potentially driving
a reduction in consumer bills by an average of $189 per year. However, the NSW
network businesses are likely to contest these potential cuts and lobby for
higher prices for NSW consumers.
‘It’s high time that electricity
prices came down,’ said Oliver Derum, Senior Policy Officer with the
Public Interest Advocacy Centre’s (PIAC) Energy + Water Consumer Advocacy
Program (EWCAP). ‘We welcome the AER’s draft decision to reject the NSW
networks’ proposal to increase prices at close to CPI annually,’ he said.
‘Together
PIAC, the Council of Social Service of NSW (NCOSS), the Ethnic Communities’
Council of NSW and the Total Environment Centre are calling on the AER to remain firm in the face
of lobbying by the NSW network businesses.
‘We
actually think the AER should have gone further. Consumer groups are asking the
AER to examine reducing the rate of return from the draft level of 7.15%.
‘We
note the UK regulator recently determined a rate of return of 4.8% so there is
scope for this figure to decrease even more, especially the return on debt
component,’ said Mr Derum.
‘We
are also asking the AER to reconsider its approach to Demand Management, given the potential for lower peak demand
to reduce costs to consumers,’ said Mark Byrne, Energy Advocate at the Total
Environment Centre.
‘It’s
not good enough to wait for the rules to change, the AER should at the very
least agree to the demand management proposals put forward, in particular by
Ausgrid,’ he said.
NCOSS
CEO Tracy Howe said the number of households disconnected due to non-payment of
energy bills increased by 32% in the 2013/14 financial year. ‘We should be
doing everything we can to put downward pressure on prices and this
determination does just that’, she said.
MEDIA CONTACT: PIAC Senior Policy Officer, Oliver Derum: 0422
946 901.
Photo: Flickr