Committee finds peak demand adding to power costs

Lee Constable

CONSUMERS could get incentives to cut their electricity use during peak demand periods after a Senate inquiry recommended major changes to the national electricity market on Thursday.

More than 100 submissions were sent to the committee outlining many problems in the national energy market, including a weak regulatory framework allowing state governments to gold-plate transmission networks.

While the committee identified 12 different problems contributing to the huge price rises for electricity in recent years, it was dogged by "a lack of quantitative information" on how much each problem was adding to costs.

Retail consumers such as homeowners and business people could potentially tell their electricity suppliers to cut power during peak demand periods in an effort to cut bills.

Led by Labor Senator Matt Thistlethwaite, the committee found peak demand, overestimated demand forecasts, gold-plating, opportunitistic profit-taking and revenue caps were adding to the power costs.

Among its recommendations were for an annual analysis of all cost-contributing factors to be completed, improved price scrutiny, removal of incentives to "gold-plate" transmission networks and various regulatory rule changes.

The report was the result of a long-running inquiry that followed several industry and regulatory body reports citing problems.

The committee was also divided along party lines, with additional comments from Coalition senators, Greens senators and independent Senator Nick Xenophon filed along with the Labor senators majority report.

Coalition senators argued for more transparent scrutiny of the impact of the carbon tax, while the Greens argued for more environmental objectives to be taken into account to lower emissions.

But it would be some time before any changes would be made to the electricity network, with industry and consumers now waiting for the official Federal Government response to the inquiry.

Topics:  electricty, senate inquiry



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