Supplier's price goals dump on PM's plan
NSW households are facing another round of rises to electricity prices which will absorb much of the $250 in savings the Prime Minister flagged on Sunday will be shaved off the annual household electricity bill.
NSW households are facing another round of rises to electricity prices which will absorb much of the $250 in savings the Prime Minister flagged on Sunday will be shaved off the annual household electricity bill.One of the largest electricity suppliers to NSW households, the Hong Kong-owned EnergyAustralia, on Monday outlined plans to raise prices by up to 10.5 per cent over the next three years.This come hard on the heels of increases of up to 20 per cent introduced from July 1, sparked largely by the need to upgrade the electricity network.Heavy spending on the power network, which surpasses the total being spent on the roll-out of the national broadband network, has sparked criticism of "gold plating", as power companies buy new equipment.The proposed increases to electricity prices also follow AGL outlining plans to increase household gas prices by 10.4 per cent from mid-next year.Addressing a forum on Monday held by the NSW pricing regulator, the Independent Pricing and Regulatory Tribunal, EnergyAustralia outlined a proposal to raise prices by up to 4.5 per cent from July 1, 2013, by up to a further 3 per cent from July 1, 2014 and a further maximum of 3 per cent from July 1, 2015.At a minimum, prices would rise by 5 per cent, in total, over the three year period, it said."These are required to support an efficient energy sector," EnergyAustralia's group executive manager, retail, Mr Adrian Merrick, told the forum.The largest electricity retailer in NSW, Origin Energy, has yet to disclose publicly its planned price rises, although it told the forum increases would exceed the rise in the consumer price index but double digit rises would not occur."Retail regulatory risks have increased over the past 12 months," Mr Frank Calabria, the chief executive of energy markets at Origin, said.The latest round of proposed price rises come as wholesale electricity prices remain weak due to soft demand following sharp rises in retail electricity prices over the past five years along with falling demand from industry in the wake of the strong Australian dollar which has pressured exports.At the weekend, the Prime Minister, Julia Gillard, outlined a range of measures aimed at curbing over-spending by electricity companies which, she said, could cut the annual household electricity bill by $250.The Prime Minister will seek support on Friday from state government's for an overhaul of the way the power industry is regulated which she hopes will take pressure off power prices in the future.However, Mr Merrick said higher electricity prices were needed to help boost profit margins as well as to fund the cost of solar schemes.Most households spend between $1800 and $2200 on electricity annually, varying due to household size and whether they have access to gas.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free