Prices set to ease finds Commission
The days of the seemingly endless growth of power bills are set to end, according to a new report released by the Australian Energy Market Commission (AEMC).
The report examined trends in household energy prices and the drivers of those trends, concluded that poles and wires expenditure had played a key role in pushing up prices, but would soon moderate after July this year.
The Commission found that following a 14 per cent hike in the average national basis to June this year, it is expected that the average price rise will fall to 3 per cent for the two years to 2015.
Network prices will continue to drive the total prices paid by households, but as investment needs are progressively re-assessed this may lead to lower network costs,” AEMC Chairman John Pierce said.
“If current trends continue, overall wholesale prices are expected to remain flat, and we expect retail costs to flatten as well.
Mr Pierce said although the report identifies clear trends in electricity pricing, final prices are likely to be impacted by further changes to the approach taken by jurisdictional regulators to price setting, particularly in relation to forecasting wholesale energy costs; the entry and exit of generators from the wholesale electricity market; and changes in network prices following the finalisation of new regulatory determinations for individual network businesses by the Australian Energy Regulator (AER).
Prior to his resignation last week, Minister for Resources and Energy, Martin Ferguson, said that the findings are a welcome relief for households.
“This report indicates that from July this year average electricity prices are expected to increase in line with the consumer price index by around three per cent per annum,” Minister Ferguson said.
“Importantly, what the report highlights is the peak of network investment is now behind us and power bills are expected to instead move in line with inflation, bringing much needed relief for Australian households and businesses.
“This is good news for energy consumers, who have faced rising electricity costs in the order of 50 per cent over the past three years – driven overwhelmingly by the need to upgrade and maintain ageing network infrastructure built as long ago as the 1960s.”