Australians are paying too much for power. Since 2006 the average household power bill has risen 85 per cent: from $890 to $1660 a year. The prices we pay are also unfair: some people are paying too much, others too little. Electricity networks transport power from generators to our homes and businesses. Like freeways, they are built at a size to keep electricity moving at times of maximum demand – peak hour, in other words. Yet, the price we pay to use networks is the same whatever the time of day or season. It provides little incentive for us to use the network efficiently or for network companies to invest efficiently, so they have to build to meet peak demand and avoid power blackouts. The result is that we all pay more than we should. Even worse, consumers who use more electricity at peak times and less at other times pay less than they should. Other consumers subsidise them by more than $100 a year.
In this Policy Pitch event, Tony Wood, the Energy Program Director from Grattan Institute, and Fran Kelly, the well-known ABC host of RN Breakfast and Insiders, discussed the recently released Grattan report that proposes specific solutions to address the problem.