Energy Update - April
by eccnsw - Tuesday, 17 April 2012
although it will vary for customers of the three regulated electricity retailers as follows:
19.2% for Energy Australia which translates to an extra $6.50 per week ($338 per annum) on an average residential customer bill (bringing the total average annual bill to $2,101) and $8.44 per week ($439 per annum) on average for its small business customers (bringing the total average annual bill to $2,729)
10.3% for Integral Energy which translates to an extra $3.51 per week ($182 per annum) on an average residential customer bill (bringing the total average annual bill to $1,946) and $4.55 per week ($237 per annum) on an average small business customer bill (bringing the total average annual bill to $2,527)
17.6% for Country Energy which translates to an extra $7.32 per week ($381 per annum) on an average residential customer bill (bringing the total average annual bill to $2,544) and $9.51 per week ($494 per annum) on average for its small business customers (bringing the total average annual bill to $3,304).
Why are electricity prices increasing again?
Over the past 2 years, the main reasons for the increases in average regulated electricity prices have been:
1. rising network costs (the costs of using the transmission and distribution networks to transport electricity to customers’ premises), and
2. rising ’green scheme’ costs (the costs of complying with Commonwealth and NSW Government schemes aimed at mitigating increased carbon emissions, including the carbon pricing mechanism and Renewable Energy Target scheme).
This year, the increases proposed in our draft decision are primarily driven by:
Ø the continuing rise in forecast network costs, which contributes to around half of the average 16% price increase, and
Ø the introduction of the Federal Government’s carbon pricing mechanism, which contributes to the other half of the average price increase.
The Australian Energy Regulator sets network costs that retailers must pay, and IPART makes sure that the retail prices recover the actual network costs that standard retailers incur. The main reason for the difference in the average price increases in the different electricity supply areas is that they face different increases in their forecast network costs The other costs that contribute to regulated retail electricity prices will decline slightly, or remain fairly stable (see Figure 1).
IPART is responsible for setting the maximum electricity prices that regulated electricity retailers can charge to around half of all residential and small business customers in NSW. These are for customers that have not signed a market contract with a retailer or those that have returned to the regulated price (ie, standard contract). Customers on contracts with retailers pay an unregulated price, however these market-based prices are influenced by changes in the regulated prices.
IPART encourages NSW energy consumers to compare offers from retailers and ensure they have the most appropriate, and cost effective service for their needs.
IPART operates a free electricity and gas on-line price comparison service, www.myenergyoffers.nsw.gov.au , that lets consumers compare offers from energy retailers in NSW. A complementary phone service is maintained by the Department of Trade and Investment, Regional Infrastructure and Services and is available on 1300 136 888.
How can consumers provide comment on the draft decision?
IPART is now seeking comments from the community on the draft report (found at www.ipart.nsw.gov.au ), in particular on their updated cost estimates and their draft recommendations. They will hold a public hearing on 30 April 2012 before submissions are due on Thursday 10 May 2012.
IPART will consider issues raised in the public consultation and make a final decision in mid-June 2012 in time for implementation of the price changes from 1 July 2012.