Business SA warns wholesale electricity prices have risen ever since Alinta announced plans to close Port Augusta power station

ELECTRICITY prices in the wholesale market have surged around 25 per cent in the past nine months and they will soon flow through to household energy bills, the state’s peak business lobby group has warned.

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ELECTRICITY prices in the wholesale market have surged around 25 per cent in the past nine months and they will soon flow through to household energy bills, the state’s peak business lobby group has warned.

Business SA said since energy generator Alinta announced its plans in mid July last year to close its Port Augusta power station, the wholesale cost of electricity for bigger businesses had jumped up to 14c/KWH.

The group said “the cost burden on South Australian business has been substantial’’ as a result of the hike in energy prices.

The group’s senior policy adviser Andrew McKenna said solutions must be found to rein in energy costs and minimise harm to the state’s economy.

“While the recent rises in the wholesale energy market have to date mostly impacted energy-intensive users such as food and beverage manufacturers and irrigators, the rises will soon flow on to smaller businesses and residential customers,’’ he warned.

“There are several options which could alleviate prices in South Australia, including increased interconnector capacity with other States.’’

Business SA says that wholesale electricity prices have risen ever since Alinta announced plans to close the Port Augusta power station.

However, the value of such investment had to be carefully weighed, Mr McKenna said.

“Considering the likely cost of an interconnector is in excess of $500 million, any moves by Government must be on the back of a thorough cost-benefit analysis to ensure consumers will actually be better off in the long run,” he said.

Business SA said the state energy regulator was “well positioned to provide an independent price monitoring function for South Australia’s electricity market’’.

It said the Essential Services Commission of SA could “help inform decisions in relation to future policy options to address high prices, including but not limited to interconnector expansions’’.

South Australia already has among the highest power prices in the world.

The Australian Energy Regulator estimates that the average residential customer’s electricity bill was $1803 this financial year.