Power plan targets prices

06 Aug, 2018 10:07 AM
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Farm groups have formed a coalition to lobby for power price reform and are supporting the NEG and the ACCC.
Since 2012, estimates say the average electricity costs on a dairy farm have risen 48 per cent ...
Farm groups have formed a coalition to lobby for power price reform and are supporting the NEG and the ACCC.

RURAL and regional businesses have welcomed a 56-point plan released by the Australian Competition & Consumer Commission to wind back costly retail and energy network regimes, which have caused power prices to skyrocket in the past decade.

A coalition of primary industry groups made a joint submission to the ACCC’s inquiry highlighting the impact on farmers.

Since 2012, estimates say the average electricity costs on a dairy farm have risen 48 per cent across the country, with power accounting for a significant proportion of a dairy shed cost – varying from $17,000 to $40,000 on average a year.

Adelaide Hills brussels sprout growers the Cranwell family saw the cost of their electricity contract shoot up 126pc in 2017 when it came up for renewal – rising from $50,000 to $113,000.

PV Water supplies 250 irrigating canegrowers in Mackay, Qld.

Their electricity costs rose 52pc between 2009 and 2013, driving down water demand by 20pc.

New tariffs are forecast to increase prices by more than 100pc.

West Corurgan Private Irrigation, Berrigan, NSW, is a private irrigation scheme for 300 properties. Its pump station cost $284,000 in 2016-17.

That price is set to rise 40pc, or $114,000, in the next financial year.

Meanwhile, household electricity prices have risen 63pc in the past decade.

Small enterprises and industrial consumers have seen prices double, or even triple where there is limited competition for tenders.

​A whopping 48pc of the average power bill comes from network charges, which have been inflated as the ‘poles and wires’ asset bases of electricity networks grew 400pc in the past 15 years, greatly exceeding actual demand.

The ACCC says its reforms would deliver households up to 25pc savings ($290-$415 a year), while more than 2 million small to medium businesses could save an average 24pc on power bills and larger commercial and industrial customers could see costs decrease an average 26pc.

The report calls for public investment in new power generation, with the technology to be determined by the market, to support new supply and to drive down prices.

Other elements of the ACCC’s plan are aimed at creating more transparent retail and energy network regimes.

“The National Electricity Market is largely broken and needs to be reset,” ACCC chairman Rod Sims said.

“Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses.”

FarmOnline

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