Electricity prices in Victoria tipped to jump in 2017

BRACE yourself for steep rises in your power bills — Victorian wholesale electricity prices are tipped to jump by 18 per cent by the end of next year. Here’s why.

Victorian wholesale electricity prices are tipped to jump with the expected closure of Hazelwood power station.

HOUSEHOLDERS should brace for steep rises in their power bills with Victorian wholesale electricity prices tipped to jump by 18 per cent by the end of next year with the expected closure of Hazelwood power station.

The sharp rise in wholesale prices could see household ­retail bills rise by up to 5 per cent — the first significant rise since the abolition of the ­carbon tax.

It comes as federal government modelling has priced the cost of the Andrews Government renewable energy target at $14 billion to taxpayers.

The jump in the future price of electricity comes after the owners of Hazelwood announced they planned to shut the brown-coal power station.

Hazelwood’s owners have announced they planned to shut the brown-coal power station.

In late September, the future wholesale price of electricity per megawatt hour for December 2017 was $47.08.

On Wednesday, it had jumped 18 per cent to $55.60.

The increase in the future wholesale price for September 2019 was even bigger — 27 per cent, from $50.47 up to $64.

But experts say the amount of electricity traded that far ahead is too small from which to draw iron-clad conclusions.

The wholesale retail price of electricity makes up to a third of household electricity bills.

The expected jump in prices comes after two years in which Victoria’s household power bills have fallen.

In 2014-15, retail power ­prices dropped 3.6 per cent and 1.9 per cent again in the past ­financial year.

It was revealed yesterday Victorian Treasurer Tim Pallas met French energy giant Engie, which owns Hazelwood, earlier this month in Paris.

Tim Pallas. Picture: Tim Carrafa

He said the State Government was preparing for the ­potential closure of the Hazelwood mine but the final ­decision would be made by Engie’s board.

“We are preparing ourselves for a scenario where ­Hazelwood may close,” Mr Pallas said. “Why are we doing that? We would be remiss in our ­duties not to do that.

“We are not assuming that will be the case.”

While he refused to reveal what was discussed in the meeting, Mr Pallas said he had not offered any financial incentives to the company to keep Hazelwood open.

He also said the costs of keeping the mine running were a “considerable concern” for its owners.

Federal Environment and Energy Minister Josh Frydenberg warned the Andrews Government’s pursuit of its 40 per cent renewable energy target was putting at risk the state’s cheap power as well as its energy security.

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