Power pricing surge

Charges 70 per cent higher than the American average
A figure that will grow to 160 per cent in two years
Exposes myth that Australian electricity is relatively cheap
AUSTRALIANS pay 130 per cent more for electricity than Canadians, according to new research – a power premium to rise to 250 per cent once the carbon tax and locked-in price increases take effect.

The research, which will be made public today, claims household charges are already 70 per cent higher than the American average, a figure that will grow to 160 per cent in two years. Japanese, British, French, Irish and New Zealanders all pay less than we do.

The research forms the basis of a report to the Energy Users Association of Australia – which represents 100 big power users including BHP, RailCorp, Coles, the Commonwealth Bank and Brisbane City Council – and argues the way power prices are set must be urgently reformed.

The EUAA will also use the research to claim it exposes as a myth that Australian electricity is relatively cheap.

Energy Minister Martin Ferguson recently said Australians pay less than the OECD average, relying on a document called Energy In Australia 2012, which his department’s Bureau of Resources and Energy Economics (BREE) published three weeks ago. The document uses electricity prices from 2009-10.

“That data is old,” EUAA executive director Roman Domanski told The Daily Telegraph last night. In 2010-11 alone the national price rose by 16 per cent; the NSW jump was 23 per cent. The numbers used to compile the document Mr Ferguson relied on put the NSW average at 18.55c/kWh. But in the real world, households are paying regulated rates as high as 28c/kWh.

The average New South Wales household’s annual cost for electricity would fall from $1700 to less than $700 if our prices were the same as in Canada.

Mr Domanski said: “Add in the carbon tax from July, further network price increases and renewable energy subsidies and inevitably our prices are pushed to the point where they are challenging Denmark and Germany as the most expensive in the world.” The report to the EUAA, produced by Carbon Market Economics, found Australian power prices had risen about 40 per cent since 2007 and would rise by another 30 per cent over the next two years.

It found that, even using 2007 currency exchange rates, Australian households still paid more than those in Japan, US, Canada and the average of the EU. Carbon Market Economics comparison of prices in 92 jurisdictions – including more than 35 countries, American states and all Australian states and territories – found NSW ranked fourth behind Denmark, Germany and South Australia. Victoria was fifth and Western Australia was sixth. The ACT was 21st.

In explaining why BREE used figures dating back to 2009, energy manager Allison Ball said Australian Energy Market Commission data wasn’t available until late 2011 and global 2011 statistics from the International Energy Agency were still not available.

However, The Telegraph understands Carbon Market Economics used 2011 IEA figures published before Mr Ferguson claimed Australian prices were below the OECD average.

Melrose Park mother-of-two Leanne Imbro said her family’s last bill had jumped to about $700. She said she has been reassessing her children’s extra-curricular activities.