Electricity companies increase prices

Published: June 05, 2009 - 10:00 AM

Big hike in electricity bills for NSW households

From July households in NSW will pay up to 22% more for electricity as energy companies pass on increases in the underlying wholesale price of power. Two factors are contributing to the large price hike – the cost of supplying electricity has significantly increased and the need by the NSW state government to guarantee future demand for electricity.

The Independent Pricing and Regulatory Tribunal (IPART) indicated in a recent report that it does not welcome such large price increases, however if the electricity cost allowance is not increased some retailers may be unwilling to supply customers, and incentives to invest in new generation capacity when it is needed may be inadequate.

IPART calculate that for typical residential customer this increase equates to an additional average weekly electricity bills of $3.53, $3.89 and $3.92 for customers of Energy Australia, Integral Energy and Country Energy, respectively. This represents a significant increase of about 22% for Energy Australia, 21% for Integral Energy, and 18% for Country Energy.

The rise in unemployment as a consequence of the global financial crisis means the price rise in electricity will have a greater impact as more households fall into the low income bracket. In addressing the difficult economic climate IPART has suggested a number of customer assistance measures to reduce the load on households including:

increasing pensioner rebates from $112 to $130 per annum, indexed thereafter
extending energy rebates to include recipients of Carer Allowances, Sickness Allowances and Special Benefits
introducing a “Customer Assistance Policy” for small domestic customers, and
increasing the level of funding under the current EAPA scheme to $100 million.

Further, IPART considers that the Government should consider indexing the pensioner rebate to energy prices rather than the CPI as this more closely tracks the costs that the rebate is alleviating.

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