New South Wales energy bills could shoot up by up to $100 per year after three grid companies won a court case to raise prices by a total of $3 billion.
The decision involves Ausgrid, Endeavour Energy and Essential, all of which were sold off by the Baird and Berejiklian governments. The companies are now owned by investors including Macquarie and AustralianSuper.
The companies appealed, in what is known as a limited merits review, against a decision by the regulator to cap the increase in costs that can be passed on to consumers.
Federal Energy Minister demands explanation
Federal Energy Minister Josh Frydenberg has expressed anger at the situation, demanding to know why reforms he said would have averted the price rise were blocked.
“It’s about time state governments put the interests of consumers first and put an end to the limited merits review process,” Mr Frydenberg said.
“The reality is networks, which have been owned by the NSW government, only appeal (against) the decisions if they want more money, so let’s cut them off at the pass and keep electricity prices low.
“If (it) had been abolished, there would be $3 billion extra in the pockets of the people of NSW. Instead this money will now just go to the companies’ bottom line.
“By blocking attempts to stop network businesses gaming the system, the Queensland and NSW governments have given a green light to higher electricity prices.”
The Turnbull government wants to stop electricity companies trying to appeal against the regulator’s decision but the NSW state government has blocked those reforms.
Energy security card played
Ausgrid, the state’s largest poles-and-wires network, said it would only lead to a 1.5 per cent overall increase to bills every year, equivalent to about $11.
In typical fashion, the security of supply card was played. “Today’s decision will allow us to fund and operate a safe and sustainable electricity supply for our customers, while providing a fair return to our shareholders,” the company said.
You can read Ausgrid’s press release on the company’s media section website.
The Berejiklian government has sought to head off any political fallout from the price jump by forcing companies to spread the increases out until 2024.
“We reject speculation that bills will increase as a result of (the) Federal Court decision and the figures cited are wildly wrong,” state Energy Minister Don Harwin said.
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 on 1300 852 770 or visit our website to get a quote