Grattan Institute report shows power prices in four major cities have almost doubled over the past decade

Are Australians being charged too much for electricity?

According to a new report from the Grattan Institute, electricity prices in four major cities have almost doubled over the past decade.

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In Victoria, which hasn’t had as much spending on electricity network infrastructure as other states, the report found that the retail component of electricity pricing has increased despite the deregulation of the electricity market.

Here, you can see how the retail price of electricity has changed over time in comparison to the cost of network infrastructure and the price of wholesale electricity. Each value has been indexed to a value of 100 at the start, with all changes then relative to the price in 2001:

The Grattan Institute estimated the profit margin of electricity retailers to be about 13%, which it said was higher than other retail sectors.



My colleague Katharine Murphy wrote about the report’s release and prime minister Malcolm Turnbull’s broader energy woes:

The Grattan report looks at the challenges posed by soaring energy prices and points out that consumers struggle to find better deals to reduce their power bills because they find the market too complicated. “As a result, many Australians, including some of the most vulnerable, pay more than they need to,” the institute’s energy program director, Tony Wood, says. Wood says the way retailers present discounts is “confusing and possibly misleading” and competition is not driving innovation in customer services. “Retailers have been slow to build offers based on the benefits available through smart meters, or the bundling of new technologies such as solar power and battery storage systems,” he says. Wood said energy retailers needed to clean up their act, or political pressure would increase for price regulation.

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Responding to the report, Turnbull said the government believed households and businesses were “paying too much for their electricity”.

You can read more coverage of the report by the Australian Financial Review here, and Greg Jericho has an excellent article on electricity pricing across all states and territories here.