Finally Some Action From Canberra On Energy Prices
I’m not sure which of the two big news stories this week – power prices or Harvey Weinstein – is more depressing. I guess turning the lights off at your place is a good thing if you want to save energy, but if you happen to be at Harvey’s place… well you get my drift. 
Rod Sims, head of the ACCC this week announced that energy prices have risen 90 per cent in real terms over a decade.
Mr Sims is singing from the same hymn book as consumer groups such as the FiftyUp Club when he said, "If you haven't phoned up your retailer in the last couple of years and demanded a better offer, I'd urge you to do so, and I think you'll save a lot of money, perhaps hundreds of dollars".
If you’re as confused as the rest of us about how energy is priced, this breakdown of your bill from the ACCC might help.
* The cost of household electricity has risen by up to 63 per cent in the past decade, according to a preliminary Australian Competition and Consumer Commission report on pricing.
* The average residential household bill is about $1,500 a year, but nearer $2,000 in South Australia and Victoria.
* A huge increase in electricity network costs – driven by regulation and over-investment in poles and wires – has been the number one cause.
* The cost of networks at 48 per cent is the single biggest component of household bills.
* The wholesale cost represents 22 per cent.
* Retail and other costs make up 16 per cent, with the retail margin adding another eight per cent.
* The cost of subsidising renewable energy represents only seven per cent of the household bill.
In positive news though, Federal Cabinet announced a new plan this week where energy retailers will be forced to buy a minimum amount of baseload power from coal, gas or hydro for every megawatt of renewable energy.
What this means in normal language
● No taxpayer subsidies for renewable energy from 2020.
● No clean energy target.
● A reliability guarantee and a separate emissions guarantee that will force retailers to buy a minimum amount of dispatchable power to reliably deliver baseload supply.
● A 0.2 per cent reliability regulation on retailers to inoculate the system from blackouts and give a lifeline to coal power.
● Estimated to cut retail energy bills of between $100 and $115 a year.
While it’s easy to be sceptical, until you actually see a cheaper bill in your letter box, it’s great to finally feel as though the pollies are hearing us. We’ll bring you any updates as they happen.
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