ACCC and AER fighting for a fair go on electricity prices: Time for governments to come to the party

The NSW Farmers’ Association has welcomed the recommendations of the Australian Competition and Consumer Commission’s (ACCC)  Retail Electricity Pricing Inquiry, and the Australian Energy Regulator’s (AER) draft decision on the rate of return, which will lead to lower network costs, more transparent wholesale generation markets, and fairer retail electricity offers.  
“The AER decision on the rate of return alone will save the average electricity consumer $40 per annum, $800 for a small dairy farmer, and save the NSW Farmers membership an estimated $1.5 - $2 million,” said Matt Brand, NSW Farmers’ CEO.  
“The implementation of the ACCC recommendations will dwarf any cost-savings identified in any previous reviews, and it is incumbent on the federal and state governments to implement each and every recommendation.”  
NSW Farmers is proud of its work in securing these significant cost-savings. The NSW Farmers’ Association was selected to participate in the AER’s Consumer Reference Group on the rate of return: a group specifically set up to counter the lobbying power of the energy networks in setting network charges.   
“These decisions demonstrate the real power of consumer and business groups coming together and fighting for a common cause – affordable and reliable electricity,” Mr Brand said.
The Association also commends the ACCC for specifically addressing NSW Farmers concerns on the delivery of affordable, reliable and sustainable electricity to regional NSW and the agricultural sector, including:
•         the need for transitional assistance for energy exposed businesses with the introduction of cost-reflective pricing;
•         the introduction of measures, such as default market offers and a comparator rate for discounts offered,  to create more transparency and comparability in the business and commercial retail markets; and
•         the need to fund and incentivise the uptake of technologies that will reduce network costs and allow for the right sizing of expensive and unutilised network assets.
“Some farmers and agribusinesses would see their electricity bill jump 200-300% if cost-reflective pricing was introduced today. 
“I don’t think many businesses could survive such a price shock. That is why ACCC recommendations on transitional assistance for exposed industries, such as the agricultural sector, must be implemented by state and federal governments.”
“NSW Farmers commends the brave decision by the ACCC to call out the elephant in the room – the need to write down stranded network assets if we are ever to get affordable electricity in this country.  A sensible and phased asset write down regime for regional NSW network providers will form part of the NSW Farmers’ policy position leading up to next year’s NSW State Election,” Mr Brand concluded.
Date: Wednesday 11 July 2018
Media Contact:   Kathleen Curry  |  Public Affairs Director | 0429 011 690