Electricity network costs main cause of soaring power bills, ACCC finds

A new report has found a huge increase in electricity network costs has been the main cause of soaring household power bills.

The ACCC has released its preliminary findings of an inquiry into the electricity market, highlighting significant concerns about the operation of the National Electricity Market, which is leading to “serious problems with affordability for consumers and businesses.”

The consumer watchdog heard directly from consumers, businesses and other stakeholders at public forums in Adelaide, Brisbane, Melbourne, Sydney, and Townsville.


It found the main cause of higher customer bills was the significant increase in network costs, while green schemes, higher retail prices and a lack of competition were also partly to blame.

“The main reason customers’ electricity bills have gone up is due to higher network costs, a fact which is not widely recognised,” ACCC Chairman Rod Sims said.

“To a lesser extent, increasing green costs and retailer costs also contributed.”

The ACCC says AGL, Origin, and EnergyAustralia control in excess of 60 per cent of generation capacity in NSW, South Australia, and Victoria making it difficult for smaller retailers to compete.

They also said their complicating contracts made it difficult for consumers to understand.

“Consumers and businesses are faced with a multitude of complex offers that cannot be compared easily. There is little awareness of the tools available to help consumers make informed choices or seek assistance if they are struggling to pay their electricity bills,” Mr Sims said.

“Many of these issues arise from unnecessarily complex and confusing behaviour by electricity retailers, and in some cases this appears to be designed to circumvent existing regulation.”

According to the ACCC, Queenslanders are paying the most for their electricity, followed by South Australians and people living in NSW.

The watchdog says it’s due to a range of factors including usage patterns.

Following the release of the report, Queensland Energy Minister Mark Bailey said a Customer Council, made up of consumer and industry representatives, will meet next month to work to put maximum downward pressure on electricity prices in Queensland.

Mr Bailey said Energy Queensland, who have regularly consulted with consumer groups under Energex and Ergon, had consolidated the process to improve outcomes for customers.

“As part of the Customer Council organisations are able to have direct input into Energy Queensland decisions, facilitate wider community consultation and pass on information onto their members,” Mr Bailey said.