Energy Price Re-regulation Fails to Address Key Issue

A proposal to re-regulate energy prices in Victoria would not solve the causes of higher energy prices and would not protect households or taxpayers from rising costs, the energy industry said today.

The Australian Energy Council’s General Manager Retail, Sarah McNamara, said, “recent price increases were the result of sustained national policy uncertainty, government interference and the resulting closure of old, large power stations.

“Deregulation has not driven up power prices. Deregulation commenced in 2002 in Victoria. The sharp increase in prices we have seen over the past 12 months is because of the reduction in firm supply in Victoria.

“We are concerned that re-regulation will not contain the cost pressures in the electricity market and will lead to less competition in Victoria,” Ms McNamara said.

“It would reduce the flexibility needed to encourage the new energy competitors of the 21st century and would end up making decarbonisation of our energy supply more expensive.”

Ms McNamara said the industry is committed to working with government to help customers find the best energy outcomes for them and to assist vulnerable customers with their bills.

“We are already working with the Federal Government to improve the way we notify customers about the deals they are on and to help them find more competitive offers. We also look forward to working with the Victorian Government.

“This report represents a good opportunity to review the way we engage with customers in hardship programs to make sure they are getting the best deal for their circumstances.”

About the Australian Energy Council

The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

Media contact             Carl Kitchen                0401 691 342