South Australians Brace For Another Electricity Price Rise

It used to be there were only two things you could be sure of in life. It’s time to add a third – electricity price rises from utilities. 
    
ETSA Utilities announced last week electricity charges will increase 10% for most of South Australia’s residential and small business customers from July 1.
   
ETSA has made it very clear the increase is to help investment in distribution and transmission networks. The Australian Energy Regulator approved a doubling of investment in the network, however ETSA says in terms of real network capital expenditure per customer, South Australians pay a good deal less than electricity customers in Queensland and New South Wales.
    
According to ETSA, the electricity price rise in South Australia will represent in increase of around $65 annually for customers consuming approximately 2MWh, $120 for 4MWh consumption. Small businesses will see a similar increase, depending on their usage pattern and tariff arrangements.
    
The latest rise will likely see increasing numbers of families and businesses giving more thought to energy efficiency and perhaps installing a solar power system to buffer against this and further increases. 
     
Additionally, solar households currently receive 44c per kilowatt hour for surplus solar electricity they generate which is exported to the mains grid under South Australia’s feed in tariff program.
     
The incentive scheme may become even more generous in the near future. Legislation is currently being debated that, if implemented, would see the rate increased to 54c per kilowatt hour. However, the legislative changes also include a condition that the revamped program would close to new connections after September 2011.
   
A recent report (PDF) from the Energy Users Association of Australia states the rolling electricity price rises seen throughout the nation are attributable to increasing inefficiency from over-investment and inefficient operation, particularly in regard to government-owned distributors. 
   
The Australian Government’s climate change advisor, Professor Ross Garnaut, published a paper in April stating electricity price increases have mainly been driven by increases in the costs of transmission and distribution rather than renewable energy being the major culprit. Professor Garnaut also stated there was a “prima facie case that weaknesses in the regulatory framework have led to over investment in networks and unnecessarily high prices for consumers”.