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Households across Australia face steadily rising power bills, despite Kevin Rudd’s backflip on the emissions trading scheme. According to an article in The Australian 29 April 2010 entitled “Electricity prices will continue to increase, despite shelving of the ETS.” Energy industry players named decaying infrastructure, rising demand, a growing population and the cost of renewable energy as key factors pushing up the price of electricity.

There will be price increases as a result of the “feed-in tariffs” being introduced by the states to encourage consumers to generate their own electricity using solar panels, and pump it into the grid. Electricity generated under feed-in tariffs attracts a premium price — in NSW, for example, 60c per kilowatt hour.

The NSW energy price regulator, IPART, also confirmed electricity prices will rise by between 20 per cent and 42 per cent by 2012-13. If the ETS had been implemented as planned, the rises would have been between 46 per cent and 64 per cent, costing an average household in a rural or regional area an extra $918 in 2013.

Cameron O’Reilly, from the Energy Retailers Association, told The Australian the delay in the ETS “doesn’t change the fact prices are going up because of network investment”.
“The common factor is that peak demand is growing faster than baseload demand, and that is largely driven by increased purchases of airconditioners,” he said.

Mr O’Reilly said the 20 per cent renewable energy target by 2020, supported by both sides of federal politics, “will see building of windfarms and geothermal plants, all of which has to be paid for”.

There will be an additional average increase in NSW, of between $1.90 and $7.47 each year for an average household, as a result of the solar bonus scheme, or feed-in tariff, introduced by the NSW Labor Government last year.

Power prices in Queensland are set by the Queensland Competition Authority, which in December last year issued a draft ruling under which prices would jump 13.8 per cent from the middle of this year.

Under Queensland’s feed-in tariff, consumers are paid 44c per kilowatt hour for surplus electricity generated.

Electricity consumers in Western Australia have been slugged with a 22.5 per cent increase in domestic prices in the past 12 months, and face another 10 per cent hike in July as tariffs are brought up to electricity cost.

A decade-long freeze on electricity prices following the break-up of Western Power meant that until last year provider Verve Energy was making a significant loss.

The state government has not announced further increases beyond July, but in January last year the Office of Energy said a 76 per cent rise would be required by the end of 2010-11 to bring household prices in line with costs.

In South Australia, electricity prices are set to rise by about 7 per cent from July, or $100 for an average household, although the final decision will not be made until next month.

Pat Walsh, chairman of the Essential Services Commission of South Australia, which regulates the industry, said the decision to delay the ETS would not affect electricity prices from July, but would have an impact later on.

“It will affect retailers and probably generators,” Dr Walsh said. “The risk and uncertainty has just been pushed out a bit.”