AN ACCC preliminary report on retail electricity pricing reveals the enormity of the task of restoring Australia to the position it should have; power as a competitive advantage - not disadvantage, says the National Irrigators’ Council.
NIC chief executive officer Steve Whan said Australia’s current power prices were hitting agricultural productivity and competitiveness.
“If we don’t reverse the trend, Australia will continue to lose export markets and consumers will pay much more for fresh, locally produced, food,” Mr Whan said.
“NIC welcomes the first stage of the ACCC’s energy price investigation. We welcome the recognition in the report of key problems the Agricultural Industries Energy Task Force raised in its submission.”
“The ACCC report is a little more diplomatic than angry irrigators, but the message from the report is the same as ours. The electricity market is failing the nation.
“From generation, to distribution and retail, this market is working against providing Australia, and the world, with reasonably priced irrigated food and natural fibre.
“Our submission highlighted examples of producers forced to switch to diesel generation to stay competitive and productive, vegetable producers losing export markets and even a Queensland irrigation scheme in danger of closing down altogether.
“The NIC and groups like CANEGROWERS have consistently and vehemently criticised the returns built in to network charges through the Regulated Asset Base (RAB) – and allowed, because of market rules weighted in favour of asset owners.
“We are pleased to see strong conclusions including on ‘over-investment in electricity network operators, inefficient cost recovery and higher than warranted rates of return, due to the network regulation framework which has led to increased costs for consumers’ (ACCC p151). We are less impressed with the prospect of addressing this pressing and critical problem.
“We welcome strong conclusions on inadequate competition in retail and generation, some of which reflect our submission’s views on market power of big vertically integrated operations.
“But, this report is only a first step, the answers aren’t there yet.
“If we want to eat fresh locally produced food, and be a major agricultural exporter, then we must keep the pressure on to get answers that produce an immediate reduction of 30 per cent in electricity prices. NIC considers a sustainable power price ceiling of 8c/kwh for the electrons and 8c for the network a sound long term objective.”
The story Irrigators: Australia a long way from affordable power first appeared on Queensland Country Life.