NSW electricity prices set to skyrocket
CPRS costs now built into power prices
New South Wales households will start paying from 44 to 62 per cent more for their electricity over the three years from July 2010, according to the NSW Independent Pricing and Regulatory Tribunal's (IPART) draft determination released today.
The result would be an annual increase in the average NSW household's electricity bill of around $700 by 2013, according to Mr Shaun Johnson, CEO of the independent energy price comparison service, Switchwise.com.au.
Switchwise.com.au is a free and impartial online service that provides consumers with an easy way to compare electricity and gas prices and plans offered by all energy suppliers.
Mr Johnson says 49 per cent of the proposed retail price rises is attributed to increases in network charges to fund new investment in infrastructure and improvements in the electricity network's reliability.
More significant, however, is the fact that 43 per cent of the price increase is to take account of the higher costs to be imposed on the power industry as a result of the Federal Government's proposed Carbon Pollution Reduction Scheme (CPRS). According to Mr Johnson, this is the first time that the cost of reducing carbon emissions has been factored explicitly into retail power prices. However, should the CPRS or an alternative scheme fail to materialise over the next three years, IPART says that the CPRS-related price increases cannot be passed on to consumers.
According to Switchwise.com.au:
- Electricity price rises will range from 44 to 62 per cent, equivalent to a hike in annual bills of $554 to $893 depending upon where in NSW you live.
- Customers in Country Energy's network area, which covers regional and rural areas of NSW, will see the greatest increases in their electricity bills of 62 per cent or $893 by 2013.
- Customers in Energy Australia's network area, which includes the Sydney CBD and suburbs, will see a 58 per cent price increase resulting in higher power bills of $727 per year by 2013.
- Customers in Integral Energy's network area, which includes Sydney's Greater West, the Southern Highlands and Illawarra, will see their annual electricity bills rise by 44 per cent or $554 by 2013.
Mr Johnson says that while the price hikes are very bad news for the household budget, they will create greater incentives for consumers to reduce their energy use and buy a greater proportion of their energy from renewable sources, which are key objectives of any scheme to reduce carbon emissions. Consumers will also be incentivised to start comparing suppliers' prices as power bills eat up more of the family budget.
"As power prices rise significantly it is imperative that consumers shop around for a better deal - it's now incredibly easy to compare electricity prices across all suppliers online", he says.
Notes to Editors
Data sourced from IPART's Fact Sheet entitled "Regulated electricity retail tariffs for 1 July 2010 to 30 June 2013 - Draft report".
Released: 15 December, 2009