Late last week, New South Wales’ Independent Pricing and Regulatory Tribunal (IPART) released the proposed maximum increases retailers will be able to charge residential and small business customers on regulated electricity prices from July 1, 2011.
We reported early last week that Sydney residents will experience a major electricity price rise shock - but major hikes will spread throughout the entire state after July 1.
With an allowance for inflation; IPART says the average regulated electricity prices in NSW will increase by:
- 17.9% for Energy Australia customers
- 16.4% for Integral Energy customers
- 18.1% for Country Energy customers.
IPART says this translates to:
- An average residential customer pays between $4.38 to $6.08 extra per week or $228 to $316 extra per year.
- An average business customer paying an extra $6.25 to $10.15 per week or $325 to $528 per year.
IPART states the drivers of the 2011 electricity price increases are an increase in network costs (10 percentage points) and an increase in costs retailers must pay due to the Federal Government’s Renewable Energy Target (RET) scheme (6 percentage points).
Among IPART’s recommendations to the government, the body says consideration could be given to closing off the NSW Solar Bonus Scheme to new participants.
The Clean Energy Council has rejected IPART’s apportioning of blame on the RET. Clean Energy Council Chief Executive Matthew Warren said the Renewable Energy Target is an important initiative that will help drive the transition to cleaner energy in Australia. Mr. Warren stated the poorly designed NSW gross feed in tariff scheme overheated the market and it now has to be paid for by NSW households.
“The over-ambitious gross feed-in tariff in NSW delivered another boom-bust for an emerging solar PV industry that is starting to make a real difference to energy use and carbon emissions in Australia.”
The Australian solar industry has found itself in a position of having to repeatedly dispel the myth of solar power rebates and incentives being the major driver of electricity price increases. It is a well-established fact that network costs have been the biggest culprit; a situation also recently confirmed by the Australian Government’s climate change advisor, Professor Ross Garnaut. In his latest update, Professor Garnaut also speculated issues in regulatory framework may have led to over investment in networks and unnecessarily high prices for electricity customers.
