“Largely broken” scathing assessment of electricity market
We callit “a failed market”, the ACCC calls it “largely broken”, either way today’s ACCC report into electricity prices makes it very clear that, if firm action is not taken, Australians will have less jobs, more expensive food and fibre and a loss of international competitiveness.
That’s the view of National Irrigators’ Council (NIC) CEO, Steve Whan, responding to the ACCC report “Restoring electricity affordability & Australia’s competitive advantage.”
Steve Whan said “the ACCC hits the nail on the head with a number of its conclusions about the state of the electricity market. In doing so, it has agreed with a number of key points put forward by the Agriculture Industries Energy Taskforce.
“Our submission provided case studies of agricultural businesses installing diesel generators because being connected to the grid had become too expensive; of vegetable growers priced out of export markets and even an entire irrigation district in danger of closing down.
“We provided independent research showing that profits at every level of the energy supply chain were unjustifiably high. With network costs a particular problem.
“The key area where we would like to have seen a stronger recommendation is on the network Regulated Asset Base (RAB). The ACCC has recommended that NSW, Qld and Tas‘remedy’ past overinvestment with a write down of Government owned assets or refunds to consumers.
“Our Taskforce believes the basis for calculating the RAB should be changed to ‘optimise’ assets. That is a longer-term solution, which stops the networks seeking to recoup any future attempt at overinvestment as well as dealing with the past.
“We welcome strong recommendations on improving competition, particularly in the Generation sector; strengthening AER powers in the wholesale market; and on limiting the domination of big vertically integrated companies.
“Recommendations on stand-alone systems are also very positive along with proposed industry specific assistance for transition to cost reflective tariffs.
“We also agree with the findings on the proposed NEG. There is a lot of detail to go, and some reservations, but it is the only opportunity, we currently have, to end a decade of policy paralysis that is now directly contributing to high wholesale energy costs.
“The ACCC has made some scathing findings and tough recommendations. It is criticalGovernments implement them.
“High electricity costs are impeding the transition from a ‘mining boom’ to a ‘dining boom’. That’s why irrigators are saying there must be a maximum price for electricity of 16 cents/kwh.
“Australia has abundant energy sources and the bottom line is, if we don’t get substantial reductions in power prices, we will lose our position as a competitive global food and fibre exporter, and in doing so kiss tens of thousands of jobs, and high living standards, goodbye.”
Media Contact:Steve Whan 0429 780 883
Wednesday 11 July 2018