Well, it’s great to see that the Opposition has seized the opportunity to stick the boots in to the Western Australian Government over yesterday’s announcement of 25% increases in retail power prices. I guess you can’t pass up good opportunities to score points in politics.

However, who is to blame? As usual, it is both sides of the political spectrum. Both Liberal and Labor Governments over the last decade have not had the courage to allow power prices to rise gradually to reflect both increased supply costs and ever increasing consumption by homes and businesses.

I can readily understand why it is politically unpopular to announce price rises. However, sooner or later, reality bites. This time it has bitten very hard indeed. However, there are probably further price rises to come over the next few years, evidenced by the WA Office of Energy’s request for a 52% price rise to bring electricity prices into line with the cost of generation, transmission and distribution.

Unfortunately it is very bad news for Western Australian consumers. The WA Government has just announced a 10 per cent rise in electricity prices on April 1st followed by a further 15 per cent rise on July 1st.

The reality of the situation is that it costs more to generate and distribute power than consumers have been paying so eventually something has to give. This probably reflects a complete under-investment in generation capacity over many years to meet the rapid growth in consumer and business demand in the boom state.

Unlike in other states, the retail energy market in WA has not been deregulated so consumers do not have the option to shop around for cheaper electricity prices.

You can read more here.