This article is more than 2 years old

This article is more than 2 years old

The timing of the carbon tax was “unfortunate” because it coincided with soaring electricity network costs that have underpinned increases to household bills, the head of the Australian Competition and Consumer Commission (ACCC) has told a forum in Brisbane.

The ACCC is next month due to hand to government its final report on the electricity market. The body’s chairman, Rod Sims, said on Monday he was unable to reveal specific details but gave some hints about the direction the inquiry had taken.

Unlike the interim report, which was released last year and which charted factors that had caused bills to increase over time, the next phase would outline a “tricky” path to ultimately bringing those prices down, Sims said.



He also flagged tougher “enforcement action” against power retailers whose pricing and discounting remained confusing.

“We’re going to see how we can get the retail market less opaque,” Sims said.

“We are looking at taking some enforcement action. We’ve done it before and it didn’t sort out ... this sort of behaviour. So we think something more is required.”

Speaking at a Committee for Economic Development of Australia (Ceda) energy forum in Brisbane, Sims said there was a simple fix for the gas market. He said gas prices soared after states such as NSW and Victoria put in place effective moratoriums on onshore drilling.

“Ultimately, what the gas market needs is more gas,” Sims said.

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Sims said transitioning the electricity market towards renewable energy had been a complex process, but that it was not the main contributor to the spike in household prices. Network charges, and not the cost of renewables or the carbon tax, had the biggest impact on bills.

“The main reason our power prices have gone up is because of network costs, which have pretty much nothing to do with ... whether they’re generated by renewable energy or coal,” Sims said.

“When we started tackling climate change and the carbon tax was introduced was the same time that network charges were going through the roof. The timing was quite unfortunate.”

Sims said subsidies for renewable projects would “close to disappear” by 2020 and new projects from then would need to link to the energy grid to be profitable.

“In a sense we didn’t transition to renewables, we went straight to them,” he said.

“The way they were subsidised didn’t link them to the energy system. They were subsidised to be there, not linked to the energy system, so you had a mismatch.”