A huge increase in electricity prices over the past decade is putting unacceptable pressure on Australian households and businesses, the consumer watchdog has declared.
The Australian Competition and Consumer Commission has delivered its preliminary report examining retail electricity prices to the Turnbull Government, providing yet more evidence of the woes besetting the energy sector.
But ACCC boss Rod Sims says the government will have to work out if its focus is on lowering prices, boosting reliability or reducing emissions because the problems don’t necessarily have the same solution.
Residential prices increased 63 per cent since 2007 and the average bill was about $1524 plus GST.
The ACCC found many households could not absorb these increases, with some people forced to cut spending on food and health to cover their power bills.
Similarly, businesses that couldn’t pass on higher costs told the watchdog they were considering cutting staff or moving overseas and some have closed.
Mr Sims said there was almost a penalty for loyalty with the major energy retailers.
‘‘If you haven’t phoned your energy retailer in a couple of years, phone them up, demand a better deal and threaten to switch — I’d be surprised if you don’t save a lot of money,’’ he said.
The main driver behind higher prices was network costs — the poles and wires — with retailer costs and green schemes contributing to a lesser extent.
National Irrigators Council chief executive officer Steve Whan said Australia’s power prices were hitting agricultural productivity and competitiveness.
‘‘If we don’t reverse the trend, Australia will continue to lose export markets and consumers will pay much more for fresh, locally produced food,’’ Mr Whan said.
The report found the high prices were putting Australian businesses at an international competitive disadvantage.
‘‘NIC welcomes the first stage of the ACCC’s energy price investigation,’’ Mr Whan said.
‘‘We welcome the recognition in the report of key problems the Agricultural Industries Energy Task Force raised in its submission (the task force includes 11 peak agricultural bodies).
‘‘The ACCC report is a little more diplomatic than angry irrigators, but the message from the report is the same as ours. The electricity market is failing the nation.
‘‘From generation, to distribution and retail, this market is working against providing Australia, and the world, with reasonably priced irrigated food and natural fibre.’’