Energy costs continue to pile up in South Australia

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  • Businesses to be hit with $30 energy increase
  • Households face $27 hike
  • Spot and futures prices show no sign of dropping

More energy worries have just been piled on South Australians SA Power Networks piled new annual charges onto household and businesses bills.

The latest pricing submission from SA Power Networks heaped $27 and $30 per year in annual network fees for households and businesses respectively.

Ross Womersley believes that the new charges might tip some over the edge

SA Council of Social Services chief executive Ross Womersley said network charges made up just 30 to 40 per cent of the average power bill and was “the base” of other charges.

“These charges are just one part of the power bill that’s set to rise in the next 12 months,” Mr Womersley said.

“Whilst in some regards this may seem modest but these are averages and for some people these increases will well exceed the average.”

Despite South Australia’s state government recently announcing the construction of a new gas fired power plant as well as a large-scale battery farm, prices in the short term are not dropping. SA also announced a new gas deal but the status quo has prevailed so far.

Spot and futures energy prices expected to increase

Despite several investment announcements, short term indicators show prices are set to increase again

This is worrying South Australians, who are paying exorbitant spot prices and futures prices, despite the government announcing a probe into claims of price gouging by the big energy retailers.

Energy retailers are yet to set their pricing structures for the 2017-18 financial year, which is expected to result in further significant price rises. SAPN spokesman Paul Roberts said the proposed increase reflected earlier price path submissions set by the regulator.

Prime Minister Jay Weatherill has promised that a repeat of last September’s blackout will not happen. But Opposition Leader Steven Marshall said the rise was “the latest increase as part of the never ending story on electricity prices”.

“Unfortunately this won’t be the last increase in electricity bills this year with much larger rises on the way,” Mr Marshall said.

“All South Australians are paying the price for Jay Weatherill’s disastrous electricity policies.”

Energy Minister Tom Koutsantonis said he would wait on AER’s decision before commenting on the proposal.

Mr Koutsantonis last year launched a successful challenge in the Australian Competition Tribunal to SAPN’s bid to charge extra revenue from 2015-2020, characterising the proposal as “an unnecessary price hike”. SAPN launched a yet to be resolved Federal Court appeal against the Tribunal’s ruling last November.

How does this affect my business?

While this rates hike is exclusive to South Australia, the bigger picture remains the same. Energy prices are rising across the board and although the Federal Government has announced an expansion of Snowy Hydro, no short-term solution to the shortage of supply has yet been found.

The Federal Government is trying to secure cheaper Australian gas pipeline fees to put downward pressure on spot and future prices. It is also trying to exert pressure through the probe it has ordered into pricing strategies, but results are still a long way off.

You must act now to protect your business. Prices are still astronomically high and the best short-term measures you can take include energy use auditing, elimination of waste and self generation. Leading Edge experts can help you with all of this. We can identify consumption patterns and tailor packages to your needs. We can also edit your energy use and identify ways to eliminate waste and increase power efficiency.

We can also help by setting up group energy tenders and advising you on the best solar power deals that maximise on investment.

About Leading Edge

Leading Edge Energy is an energy cost reduction consultancy. We assist our clients by applying a holistic lens to your energy costs whereby we guide you through the complete energy cost reduction cycle from rates minimization to energy efficiency, solar generation and battery storage.

Our initial review and assessment process is a complimentary service and you are not obliged to accept any offer that we recommend to you.

Call us today: 1300 852 770


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