The NSW government’s pricing regulator IPART has thrown its weight behind moves to remove all price controls on electricity by arguing that controls have not protected households from hefty price rises in recent years.

‘‘Retail price regulation has not protected consumers from electricity price shocks,’’ the Independent Pricing and Regulatory Tribunal chairman, Dr Peter Boxall said.

‘‘A well-functioning retail market - in which there is competitive rivalry between electricity retailers - is the best way to ensure that ... electricity prices are driven towards the efficient cost of retail supply.’’

Electricity prices for those still on government-regulated pricing contracts, which make up for around half of all consumers in NSW, have risen sharply in recent years, with rises averaging around 20 per cent taking effect from July 1.

Studies are underway to assess the extent of competition in the NSW market, although price controls are expected to remain in place until at least after the next state election, which is due to be held in early 2015.
IPART is to review prices with the aim of setting thresholds for the period 2013-2016.

Even though the NSW government is committed to holding price rises to less than the level of inflation, recent rises in the cost of renewable energy, most notably the Federal government’s small scale renewable energy scheme, is expected to result in most retailers pushing for higher prices.