Call for federal electricity watchdog as bills set to soar

30 Apr 2007Archived News Energetics in the News

PUBLISHED: The Age - By Mathew Murphy - Karen Brock, Practice Area Leader, Strategic Energy Procurement and Jonathan Jutsen, Founder & Executive Director, Energetics Pty Ltd are asked by The Age to comment on the company's recent call for the government to come up with a centralised approach to address the electricity price shock.

 

BUSINESS could be paying an extra 30 per cent more for its electricity bills in the coming months as a leading energy consultancy calls on the Federal Government to immediately act to reduce power demand across the network.

Energetics, based in Sydney, is calling for the establishment of a centralised agency that would operate across all states and territories to monitor electricity prices and energy efficiency measures, while encouraging homes and businesses to curb demand.

Karen Brock, a spokeswoman for Energetics, said wholesale electricity prices, which vary from state to state, had doubled since the beginning of this year and were now in excess of $78 a megawatt hour.

Ms Brock warned that those businesses about to renegotiate their energy contracts could experience a significant increase in the price they paid for power.

"It is not going to impact on domestic or small businesses now if they don't have to renegotiate contracts, but if you have a contract expiring in June and you need to negotiate now, you are going to have some alarming increases in their energy costs," Ms Brock said. "The price actually jumped 25 per cent last weekend alone."

When an additional retail margin was taken into account, businesses could be paying as much as $100 a megawatt hour.

"Last year we thought $50 was high, so it has changed quite quickly," Ms Brock said.

Jonathan Jutsen, executive director of Energetics, said the Federal Government needed to commission an inquiry into Australia's energy demands.

"We either put up with the price hikes or we do something in the short term to reduce demand to reduce the price and constrain the increases," Mr Jutsen said.

"There should be a central organisation that's looking after improving efficiency across the economy and reducing greenhouse emissions."

Mr Jutsen said the ongoing drought had affected prices. Economic incentives should be offered to companies and families to reduce demand.

"Because of the reduced availability of water and hydro power, we've got a 24-hour problem," he said.

"If an incentive payment was offered by the Government to those who replace inefficient equipment, then their bills would be cut down and they would have a payment on top of that as well."

Mr Jutsen said the price hikes would last throughout this year and could go well into next year unless action was taken now.

Key Points

  • Businesses face a 30 per cent hike in electricity bills this year.
  • Bills at $100 a megawatt hour possible, says Energetics.
  • It calls for a central agency to monitor prices and efficiency.
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