First hearing in landmark legal challenge to electricity prices

The Australian Competition Tribunal will tomorrow decide whether to permit the first-ever legal challenge on behalf of consumers to the Australian Energy Regulator’s (AER) recent electricity network revenue decisions. 

PIAC believes that the AER’s 30 April decisions allow the NSW electricity networks (Ausgrid, Endeavour Energy and Essential Energy) to operate inefficiently over the next four years, keeping electricity prices unnecessarily high for consumers. 

‘In recent years, massive surges in the cost of electricity have been driven largely by increases in charges by electricity network companies – which make up 50% of household bills in NSW,’ said PIAC’s CEO, Edward Santow.

‘If our challenge is successful, the average household electricity bill could be reduced by $170 per year below the regulator’s determination.’

The Tribunal’s leave hearing, which will determine whether or not the case can proceed in its current form, is the first step in the PIAC’s legal case. The AER is contesting PIAC’s applications.

‘We are taking this unprecedented legal action because it is clear that NSW consumers are paying too much for electricity. 

‘Disconnections are increasing – more than 33,000 households were disconnected from this essential service for a period last year because they could not afford to pay their bills.

‘Meanwhile, NSW electricity networks charge twice as much as their counterparts in Victoria to get electricity from a power station to a consumer.

‘The law requires expenditure to be efficient and we don’t believe the AER’s final determination reflects efficient costs for consumers,’ said Edward Santow.

PIAC anticipates being the first consumer organisation to present argument before the Tribunal in a matter of this kind. Before changes were made to the National Electricity Law in 2013, only electricity networks had challenged the AER’s decisions.

MEDIA CONTACTS: PIAC Media and Communications Officer, Gemma Pearce: 0478 739 280

Photo: Flickr/freefotouk

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