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Firms point to government schemes

Date

Rachel Wells

Premier Ted Baillieu says PM is 'kidding' if his state is to blame for soaring electricity prices.

Premier Ted Baillieu says PM is 'kidding' if his state is to blame for soaring electricity prices. Photo: Arsineh Houspian

VICTORIA'S electricity distributors do not deny that increased investment in poles and wires have contributed to large increases in electricity prices. However, they argue federal and state government interventions such as smart meters, energy efficiency schemes, and reliability targets, as well as the carbon tax, are equally to blame for driving up electricity bills.

And Premier Ted Baillieu said the Prime Minister is ''kidding'' if she thinks Victoria is to blame for rising energy prices here.

''If the Commonwealth were genuinely concerned about the bills increasing they'd be doing something about the impact of the carbon tax,'' he said.

''Victoria has led the way on energy market reform from the Kennett government years. So 99 per cent of what she has to say has no application in Victoria.''

Andrew Dillon, general manager of corporate affairs at the Energy Supply Association of Australia, which represents energy distributors, generators and retailers said there was ''no doubt that investment in infrastructure is impacting on bills - but there's also no question that programs like the renewable energy target, state solar feed-in-tariffs, and energy efficiency schemes have also added to power bills''.

His comments came as the Prime Minister yesterday called on the states to rein in rising electricity prices and singled out increasing network costs or investment in so-called ''poles and wires'' as a major factor for driving up energy bills.

Mr Dillon also pointed out that poles and wires - also known as network costs - in Victoria were a substantially smaller proportion of bills than in many other states.

''In some states particularly in New South Wales and Queensland network costs make up about half of household electricity bills, in Victoria they are about 30 per cent,'' he said.

Mr Dillon believes that because of the privatisation of Victoria's electricity and the fact that suppliers have been upgrading old infrastructure over a longer period of time meant much of Prime Minister Gillard's fingerpointing did not apply.

Nonetheless he said if Canberra was serious about keeping electricity prices down, all cost-drivers should be scrutinised.

''The Productivity Commission has done some work on how efficient these green schemes are, in particular, now that we have a carbon price. Are they complementary to a carbon price or are they duplicating that work? ''There's no one villain here.''

A report released earlier this month by St Vincent de Paul Society showed the average Victorian household bill jumped by an average 12.5 per cent on July 1, compared with January this year, and by 11 per cent for gas - adding an additional $300 to household energy bills.

It estimates that 25-30 per cent of electricity bills are accounted for by electricity generation; 25-35 per cent by transmission and distribution, 20 to 30 per cent by retail costs and about 20 per cent by government programs.

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