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Friday, 2 December 2011

Consumers at fault as well say Chiefs are prices soar

As soaring electricity prices bedevil households, industry leaders say consumers are just as responsible for increasing costs as the bodies that supply, deliver and regulate power.

In rare public comments, they say the way to save money is to use less electricity.

"Consumers need to look after their own interests by understanding how their lifestyle and behaviour (affects) their power bills, managing their electricity use, and actively pursuing the lowest prices," they said.

The Herald Sun surveyed the bosses of the companies that build and maintain the poles and wires that distribute power.

They are United Energy's Hugh Gleeson, Jemena chief Paul Adams, SP Ausnet's Nino Ficca, and Shane Breheny, of Citipower and Powercor.

About 40 per cent of each household's power bill ends up with one of these five distributors, which rake in $1.3 billion a year from their local electricity operations.

Victorian power bills surged by an average 20 per cent last year, according to St Vincent de Paul.

Electricity retailer Simply Energy was recently criticised for advising customers to save on energy costs by knitting tea cosies.

In a joint response to questions from the Herald Sun, distribution bosses blamed price rises on:

RISING consumption.

BIG-SCREEN TVs and airconditioners, which heavily draw on power.

THE need to replace old infrastructure.

COSTLY low-emission power sources.

Distributors say higher consumption usually requires them to build more infrastructure, which forces them to invest and, thus, charge more.

They would not concede that Victorians paid too much for power, saying the state's electricity was among the cheapest in Australia and that strict government regulation stopped them dudding consumers.

Australia's power distribution industry is growing by $2 billion a year, says IBISWorld.

Energy Retailers Association of Australia director Cameron O'Reilly said rising distribution costs linked to smart meters and increased consumption were driving the increase in Victoria's power costs. "Networks are around half the total bill and it's been a rising component in recent years," he said.

The Australian Energy Regulator decides how much distributors should be allowed to spend and charge consumers.

But its decisions are often overturned when networks challenge them in court, allowing them to charge customers more.

Energy Minister Michael O'Brien wants the regulatory system overhauled.

"I am concerned the current system does not effectively balance the interests of consumers and network businesses," he said.

About 10 per cent of any electricity bill goes to the retailers, such as Origin or TRU, which deliver bills, another 10 per cent goes to governments in fees and taxes and 40 per cent goes to energy producers.

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