Claims that the profit margin of electricity retailers makes up 15-20 per cent of every household bill are wrong, and not supported by the independent assessment of the Australian Competition and Consumer Commission, the energy industry said today.
The Australian Energy Council’s General Manager, Sarah McNamara, said “assertions that electricity retailers are making excessive profits at the expense of NSW households is not borne out by the facts.
“The ACCC is conducting a detailed analysis, based on data provided by electricity retailers, as part of its Retail Electricity Pricing Inquiry. The Inquiry is considering the drivers of electricity price increases over the past 10 years. A key area of focus for the ACCC Inquiry has been identifying retailers’ profit margins.
The Inquiry’s Preliminary Report, released in October 2017, found that retailer profit margins across the National Electricity Market ranged from 5 to 9 per cent and were 8 per cent in New South Wales, on an EBITDA basis.
“This is the most current data set available. It is incontrovertible. If we are to have a proper debate on electricity prices and the best ways to address them, these facts must be the starting point.
“The ACCC found that the key driver for higher electricity bills over the last 10 years had been previous network spending and more recently higher wholesale prices.
“Re-regulation is not the answer. The Australian Energy Market Commission’s review of competitiveness in the electricity retail sector found that re-regulating energy prices will not address affordability, and could actually make things worse by killing innovation and reducing the benefits of competition.”
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
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