Reforms ahead for Australia’s broken electricity sector

No excuse for further delays ahead of final COAG meeting

CHOICE says this week’s report from the Senate Select Committee on Electricity Prices sets clear expectations for action to fix Australia’s broken electricity sector by the end of 2012.

With the rising chorus for electricity market reform joined in recent weeks by the Productivity Commission and the ACCC, along with consumer, business and community groups, CHOICE says it is now time for Australia’s state, territory and federal governments to act.

“The Senate has delivered a report which lays down key steps for reducing pressure on household electricity bills, in particular by addressing the billions of dollars spent on poles and wires infrastructure,” says CHOICE CEO Alan Kirkland.

“Senators have confirmed what CHOICE, along with other consumers groups, has been saying for some time – Australians have experienced unacceptable electricity price rises, and if we don’t put in place solutions now, those increases will continue into the future.”

CHOICE made a total of 14 recommendations to the inquiry, and has welcomed the Committee’s endorsement of several critical actions to ease the burden on electricity consumers, including:

  • Changing regulations to remove the bias towards inefficient investments, including decoupling network revenues from energy volumes.
  • Considering establishing a national energy consumer advocacy body to give consumers a greater say in the energy market.
  • Adopting the National Energy Customer Framework (NECF) to create more consistent and robust national consumer protections and information.
  • Improving the quality and availability of information for energy consumers, and supporting programs to improve energy efficiency.
  • Giving greater resources and power to the Australian Energy Regulator, ensuring greater scrutiny of infrastructure spending.

CHOICE also says there are critical gaps in the Committee’s blueprint for action, including setting targets to reduce the amount of infrastructure spending driven by peak demand.

“We are disappointed that the Committee has not taken the decisive step of putting targets on network businesses to wind back one of the biggest drivers of higher household bills,” says Mr Kirkland.

“But we hope this option will be considered as governments head towards the final COAG meeting of the year

“It’s time to take the pressure off households and put it on to our State, Territory and Federal Governments – there is a clear plan on the table, and it’s time for governments to stop blaming each other and start fixing these problems.”