We all thought we’d have a reprieve from the massive price hikes of past years, with the Australian Energy Regulator (AER) introducing price cuts in 2015 and the abolishment of the Carbon Tax, but unfortunately, the retail energy networks have decided they’d prefer to see us all suffer and have made a stand against price cuts imposed by the AER.
To explain in simple terms, Australia’s network electricity fees (i.e, your electricity bills) over the last decade have consisted of a number of charges for different things. Only around 53% of these fees are for the creation and maintenance of electricity and its producing equipment – the rest goes towards the costs of supplying your home, environmental policies (which only make up 6% of the overall amount) and fees for the networks own pockets and so that they can advertise. It’s the spending on infrastructure portion that the AER primarily want to cut at this point, which would put as much as an extra $300 into our (the publics) pockets per year. Regulation on this portion in the past has been to prevent over investment and ‘gold plating’ of the network. The networks are resisting this with everything they’ve got though, on the grounds that making price cuts would prevent them from being able to properly maintain the electricity grid, which will cause more blackouts and other issues.
You see, in 2014, the Australian Energy Market Commission (AEMC) decided (with the help of a bit of public pressure) that they had enough of the network electricity companies efforts to gold plate and over invest, so they set in motion a new set of rules, that mean the network companies are forced to consult with retail and consumer customers, before increasing tariffs. They must present ‘cost-reflective’ tariffs to the public and draft change proposals to the AER before any changes can be made. This is great news, but these rules and regulations won’t be fully implemented until mid-2017.
The network electricity companies – namely Ausgrid and Endeavour Energy – have recently contested these restrictions with the Australian Competition Tribunal, which has since ordered that the AER review the restrictions with the network companies objections taken into consideration. This could lead to price hikes – particularly for those who solely rely on grid electricity.
There’s no doubt that part of the network electricity companies’ desperate attempts to keep their monopolised money rolling in, stems from the broad implementation of solar and other renewable power. In fact, it has been stated again and again that power companies are attempting to drive prices up because their once-ridiculously profitable thermal generators are being shut down left, right and centre.
The unfortunate results for consumers, if these companies get their way, is a huge drive in prices. So it would seem on the surface that the initial implementation of solar power has actually caused increased electricity costs, but this couldn’t be further from the truth. In actual fact, the profit-driven few network electricity companies – who just don’t want to invest in solar – are causing these price hikes. The only way to get them on board and help reduce electricity prices for everyone is to do whatever it takes to get solar installed in every home and business in Australia!
If you’re ready to step forward and help to do exactly that, give the solar experts at Hush Energy SQ a call today.