No start date to end energy pricing pain

A $20 MILLION Budget measure aimed at providing rebates to businesses stung by high wholesale electricity prices has no start date.

The State Government intervened in the market in May after businesses faced significant rises in wholesale electricity prices between February and May.

This was the direct result of spikes in the National Electricity Market.

Some businesses in the unregulated market faced a 97 per cent rise in their contract prices because of factors such as the closure of the Hazelwood coal-fired power station, increasing gas prices and South Australian blackouts.

State Energy Minister Matthew Groom said the design of the rebate system was being worked on with stakeholders.

“I can’t put an exact date on this but we are working as hard as we can, we recognise the pain people are feeling,” Mr Groom said.

“We want to do what we can to help these businesses and recognise the flow-on effect and that is why we have worked with Hydro to effect a discount of about 20 per cent.”

But Mr Groom said it was important that the energy market intervention be done well.

“We need to make sure we are doing it fairly — not just for end consumers but also between retailers,” he told ABC radio.

Mr Groom said it was important not to have unintended consequences.

Energy analyst Marc White said wholesale electricity prices had jumped from 5.5c/kWh in April 2016 to 12.5c/kWh in April 2017 before declining this week to 9.5c/kWh under the Hydro intervention. He said businesses were being impacted differently.

“We’re encouraging the Government to provide details on the backdating of contracts as soon as possible,” he said.

He said Goanna Energy and peak bodies would seek to meet Mr Groom in July to get more details.

Government-owned energy businesses will forego revenue of $70 million so that residential price rises are restricted to 2 per cent for the year from July 1.

Tasmanian Economic Regulator Joe Dimasi said a typical residential bill would rise by $38.

Mr Groom said it constituted a saving of $300 for the year.

“We have been able to intervene in the regulated market and that stands in stark contrast to customers interstate who are facing increases of 15-20 per cent,” Mr Groom said.