Electricity market fix
MARKET OVERHAUL MAY PRESENT OPPORTUNITY FOR REGIONAL PRODUCTION
The Committee for Greater Shepparton says there is a great opportunity for Greater Shepparton manufacturers to get a competitive edge, if some of the expected benefits from a recommended overhaul to the national electricity market become a reality.
Households could save more than $400 a year on power bills under a proposed major reset of Australia’s ‘‘broken’’ electricity market.
The Australian Competition and Consumer Commission released its long-awaited report into the energy sector on Wednesday, detailing ways to tackle skyrocketing power costs.
Businesses could also save up to $750 a year, and even as much as $2250 if they shop around for the best discounts.
C4GS chief executive Sam Birrell said slashing energy prices would benefit household consumers as well as present lucrative opportunities for the Goulburn Valley’s major employers and producers.
More than two million small and medium businesses could save an average of 24 per cent on their bills under the ACCC’s recommendations.
Commercial and industrial customers could have electricity costs drop by 26 per cent.
Mr Birrell said if such decreases came to pass, it would mark a ‘‘huge win for local production’’ and the potential for competitive advantage in foreign markets.
‘‘Particularly those who are competing against people with different power input costs,’’ he said.
‘‘It levels the playing field, for fruit packaging, milk factories, with our competitors.’’
Mr Birrell pointed to significantly higher labour and transport costs in Australia compared with competitors.
‘‘If we have significantly higher power costs and water costs, there comes a point where you’re no longer competitive.’’
‘‘Anything that can be done to reduce any of those inputs while retaining quality can be beneficial to those businesses,’’ he said. ‘‘We’re probably not going to reduce labour costs, therefore we need to automate more, be more efficient . . . that requires energy.’’
Mr Birrell described Greater Shepparton as a manufacturing city and suggested manufacturing in the Goulburn Valley could be on the increase during the next five years.
‘‘And one of major inputs to manufacturing is energy,’’ he said.
‘‘Provision of energy is not a free market service.’’
‘‘It’s a critical input to business that drives the Australian economy, and in particular in a manufacturing region such as ours.’’
ACCC chairman Rod Sims said he estimated bills could drop up to 25 per cent for the average household if the report’s 56 recommendations were all implemented.
He said a decade of poor policy decisions had caused serious affordability problems for consumers and businesses.
‘‘The national electricity market is largely broken and needs to be reset,’’ he said.
A key measure would be forcing retailers to offer a benchmark price near the middle of the market.