Electricity bills likely to rise following disappointing Tribunal verdict

Electricity bills in NSW are expected to rise following a decision by the Australian Competition Tribunal in relation to appeals against the Australian Energy Regulator’s price determinations for the NSW electricity networks (Ausgrid, Endeavour Energy and Essential Energy). 

In a decision announced today, the Tribunal has directed the Australian Energy Regulator to reconsider its 2015 price determinations that would have led to average annual household electricity bills decreasing by more than $100 this year.

In the context of exponential rises in electricity prices and inefficiencies in the how network businesses operate, which have resulted in record numbers of households being disconnected from electricity, the Public Interest Advocacy Centre (PIAC) argued for further cuts to revenue allowances. 

The Tribunal’s approach meant that it did not decide on some of PIAC’s arguments, and instead it accepted the network businesses’ position that they should be allowed to collect even more money from consumers. 

‘The law was changed in 2013 to give the regulator new powers to bring fairness to the electricity price-setting process, following price increases of 94% over five years. The Tribunal’s decision makes it harder to bring about a fair result,’ said PIAC CEO, Edward Santow.

‘Government, consumers, and the regulator have worked incredibly hard to make the energy regulation system work better for ordinary consumers, but network businesses have fought tooth and nail to reverse that progress,’ said Edward Santow.

‘This decision will put pressure on all NSW consumers. It will inevitably lead to further hardship and disconnections, particularly in disadvantaged and vulnerable communities.’ 

‘Network charges make up around 50% of household electricity bills. This decision will see prices go up but we are months away from knowing by how much. 

‘When the appeals process is finally over, there’s a significant risk of bill shock as electricity providers play catch up on how much they can recoup from NSW consumers.’

‘The aim of PIAC’s appeal was to promote efficiency in how the electricity networks spend consumers’ money. When it costs twice as much to get electricity to consumers in NSW as compared with Victoria, clearly the NSW network businesses could be operating more efficiently.’

‘PIAC’s appeal was the first time a consumer group has argued for a price decrease before the Tribunal. While the outcome is disappointing, PIAC has paved the way for future successful consumer appeals, and we will be exploring all our options to continue to fight for fair energy prices for NSW consumers,’ added Edward Santow.

CONTACT: PIAC Senior Media and Communications Officer, Gemma Pearce: 0478 739 280.

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