Re­tail power re­view

Shepparton News - Country News - - NEWS - By Alana Chris­tensen

In­dus­try prac­tices, a mar­ket that doesn’t ben­e­fit con­sumers and the cur­rent com­pe­ti­tion struc­ture are driv­ing up Vic­to­ria’s elec­tric­ity and gas prices, an in­de­pen­dent re­view has found.

Tabled in State Par­lia­ment last week, the re­port said Vic­to­ria’s prices were ‘‘un­usu­ally high’’ with no clear cause.

‘‘While whole­sale elec­tric­ity and gas costs have moved up and down since 2000, net­work prices have in­creased moderately and en­vi­ron­men­tal costs have con­tributed marginally, there is no con­stant trend that can ex­plain the sig­nif­i­cant in­crease in re­tail prices,’’ the Re­view of Elec­tric­ity and Gas Re­tail Mar­kets re­port said.

‘‘The re­tail re­sults found that Vic­to­rian house­holds are pay­ing much higher prices than of­fi­cial es­ti­mates; on av­er­age around 21 per cent more for their elec­tric­ity than the cheap­est of­fer avail­able in the mar­ket.’’

The in­de­pen­dent bi-par­ti­san re­port found that although com­pe­ti­tion mech­a­nisms in­tro­duced in 2002 were in­tended to re­sult in con­sumer ben­e­fits through lower costs, elec­tric­ity and gas prices have in­creased al­most 200 per cent since 2000, prior to com­pe­ti­tion.

The ris­ing cost of elec­tric­ity has hit farm­ers hard, with the Aus­tralian Dairy In­dus­try Coun­cil claim­ing that dairy farm­ers spend be­tween $35 and $75/day on elec­tric­ity to power their dairies, com­pared to be­tween $20 and $45/day seven years ago.

The group pointed the fin­ger at ris­ing tar­iffs, ris­ing net­work and ser­vice charges, and en­vi­ron­men­tal state levies that have seen daily elec­tric­ity prices rise be­tween 33 and 100 per cent since 2010.

Ac­cord­ing to the Aus­tralian Bureau of Agri­cul­tural and Re­source Eco­nom­ics and Sciences elec­tric­ity costs ac­count for three per cent of to­tal dairy farm op­er­at­ing costs, com­pared with less than one per cent in the live­stock and crop­ping in­dus­try.

Aus­tralian Dairy Farm­ers nat­u­ral re­sources and man­age­ment group chair and Katunga dairy farmer Daryl Hoey said the dairy in­dus­try had a ‘‘huge’’ re­quire­ment for power.

‘‘At the mo­ment we’re not re­ally go­ing to solve these is­sues un­til we can get to a bi­par­ti­san ap­proach where both sides can agree on a strat­egy and know that it’s not go­ing to get thrown out at the change of ev­ery elec­tion,’’ Mr Hoey said.

‘‘At the end of the day (farm­ers) just want lower power prices.’’

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