Power price progress pleasing, more to do

THE consumer watchdog has welcomed federal government backing for several of its recommendations for reducing power prices, but says more needs to be done.

Australian Competition and Consumer Commission chair Rod Sims said the adoption of recommendations including introducing an easily comparable price measure and reforming discounts would bring down prices for more than 500,000 consumers and help others to identify better deals.

But Mr Sims, writing in the first six-month report of the ACCC’s seven-year electricity monitoring inquiry, said tighter supply was keeping wholesale prices high, and proved more generation capacity was needed.

Mr Sims again highlighted a need for a targeted underwriting scheme for new investment, which he said would not underwrite equity but would provide certainty for debt financing.

“We also recommended that acquisition of electricity generators should not be allowed if this would result in the acquirer owning more than 20 per cent of capacity in any market,” Mr Sims said.

Mr Sims noted that states had not acted on a recommendation to write down the value of network assets, a move he said would result in lower network charges and less costs being passed on to consumers.

“Residential consumers in Queensland, NSW and Tasmania continue to pay an average of $100 more a year because our proposal to write down the value of these assets has not been taken up,” Mr Sims said.

“The ACCC accepts that this proposal would involve a potentially large one-off cost to governments, as significant microeconomic reform often does, but we urge them to consider the continuing benefit to consumers and the economy.”

Another recommendation yet to be implemented is for federal government to abolish the small-scale renewable energy scheme, which is expected to cost the average residential customer $36 a year by 2020-21.

In August 2018 the ACCC was directed by federal government to hold a long-running public inquiry into the supply of electricity into the national electricity market.

The watchdog will publish updates at least every six months until August 2025.

© AAP 2019