Greens launch push for parliamentary commission of inquiry into the failures of deregulation and privatisation of electricity retailers.
Greens launch push for parliamentary commission of inquiry into the failures of deregulation and privatisation of electricity retailers.
Greens Acting Leader and energy spokesperson, Adam Bandt MP, today announced that the Greens will introduce a bill into both the Senate and the House of Representatives to establish a parliamentary commission of inquiry into the excessive profiteering and the failure of deregulation and privatisation of the retail electricity sector.
The Greens will seek talks with Labor as well as with Coalition backbenchers calling for a Royal Commission into electricity retailers to determine whether or not they are serious about winding back the privatisation and deregulation that have led to excessive power bills.
“The deregulation and privatisation of the retail electricity sector has been a comprehensive failure. It has led to excessive profiteering, rising pollution and unacceptably high power bills,” said Mr Bandt.
“Electricity is an essential public service but it is being run like a stockmarket.
“Big companies have run out of chances to fix the mess they have created.
“Coalition backbenchers like to talk big, but if they’re serious about bringing down power bills, they’ll cross the floor and vote to start reregulating electricity prices.
“Electricity prices in regulated jurisdictions are lower than in deregulated ones.
“By reregulating electricity prices and getting more renewables in the system, we can cut pollution and bring down power bills.
“A parliamentary commission of inquiry is the next step towards winding back the deregulation and privatisation that have pushed up both pollution and power prices.”
Competition has failed:
According to the ACCC’s preliminary report, retail margins appear to be the highest in Victoria, which was also the first state to introduce deregulated prices.[1]
Reports over the last week have estimated that Australia’s electricity grid reached a 19 per cent share of renewables in the year to June 30. The increased penetration of renewable energy is putting downward pressure on wholesale electricity prices, but unless the excessive profiteering in the retail sector is reigned in, consumers may not be able to enjoy the effects of cheaper, cleaner energy.
Thousands of customers are being disconnected from the grid for not paying their electricity bills [2] and analysis by The Grattan Institute indicates that profit margins in Victoria can be as high as 30% of the bill. [3] On average the report found that the profit margin for electricity retailers in Victoria appears to be about 13 per cent – more than double the margin regulators traditionally considered fair when they had responsibility for setting prices prior to deregulation.[4]
Some analysis suggests that Australia’s prices are among the most expensive in the world:
Some industry analysis for 2016-2017 estimates electricity retail profits at $3.6 billion.
[1] https://www.accc.gov.au/system/files/Retail%20Electricity%20Inquiry%20-%20Preliminary%20report%20-%2013%20November%202017.pdf (p. 76)
[2] https://www.aer.gov.au/retail-markets/retail-statistics/2017-18-q3-residential-customers-disconnected-for-non-payment-by-jurisdiction
[3] https://grattan.edu.au/wp-content/uploads/2017/03/Price-shock-is-the-retail-market-failing-consumers.pdf (p. 20)
[4] https://grattan.edu.au/report/price-shock/