Hearing starts in legal case to reduce electricity bills

PIAC’s landmark legal challenge on behalf of NSW consumers to reduce electricity bills will commence hearings today in the Australian Competition Tribunal.

The tribunal is considering appeals of the Australian Energy Regulator’s (AER) revenue determinations for the NSW electricity networks (Ausgrid, Endeavour Energy and Essential Energy). 

While the AER’s determinations have led to a decrease in prices from historically high levels, PIAC believes that these decisions still allow the networks to operate inefficiently over the next four years, keeping electricity prices unnecessarily high. 

‘We know that the NSW electricity networks charge twice as much as their counterparts in Victoria to get electricity from a power station to a consumer,’ said PIAC’s CEO, Edward Santow.

‘Network charges, which make up around 50% of the average household electricity bill, have escalated dramatically in recent years, placing increasing pressure on low-income households.

‘In fact, last year alone more than 33,000 households were disconnected for a period because they simply could not afford to pay their bills.

‘If PIAC’s challenge is successful, electricity prices could be reduced next year by more than $150 below the regulator’s determination,’ said Edward Santow.

The electricity network businesses are also challenging the AER’s decision. If they are successful in all their arguments, average electricity bills will increase by more than $500 a year.

‘We are looking forward to making the case for more affordable electricity for NSW households. 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 is the first consumer organisation to make arguments 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.

The hearing is expected to run for three weeks.

MEDIA CONTACT: Oliver Derum, Senior Policy Officer, 0422 946 901.

Photo, from left: Oliver Derum, Gabrielle Kuiper, Julia Mansour.

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