Victoria hit hardest as power rip-off laid bare

ELECTRICITY businesses are ripping their highest profit margins from Victorian customers, an inquiry has found and Australians are being hit with some of the steepest power prices in the world.

ELECTRICITY businesses are ripping their highest profit margins from Victorian customers, an inquiry has found.

And Australians are being hit with some of the steepest power prices in the world.

A landmark review of the nation’s electricity market confirmed customers were suffering costs that surpassed many countries across Europe.

“Australian electricity prices, gross margins and net margins are among the highest in the world,” the Australian Competition and Consumer Commission report says.

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Victoria and New South Wales have the nation’s highest electricity retail margins, an ACCC inquiry has found. Picture: AAP

Victoria and New South Wales had the nation’s highest retail margins, South Australia and Queensland the lowest.

As a percentage of a total bill, net retail margins in Victoria were higher than all assessed international regions, topping New Zealand, Texas and the European Union.

For an average $1457 Victorian household bill, the retail margin was an estimated $163, or about 11 per cent.

Network charges took up $571 (39 per cent), wholesale electricity $478 (33 per cent), retail costs $152 (10 per cent), and environmental schemes $93 (6 per cent).

“The Victorian margins are too high. They represent money that should be in consumer pockets,” ACCC chairman Rod Sims said.

Retail net margin was calculated as earnings before interest, tax, depreciation.

The watchdog has recommended a radical overhaul of the energy market, including improved competition and a crackdown on confusing ­discounts, designed to save customers hundreds of dollars a year.

It commissioned analysis comparing electricity costs in several international markets.

ACCC chairman Rod Sims says the Victorian margins are too high. Picture: Patrick Gee

Australia’s average price, including GST and green taxes, ranked fourth highest, behind Denmark, Germany and Spain.

“The averaged NEM (National Electricity Market) price is higher than the average across the EU. This underscores the electricity affordability issues facing Australian energy users,” the report states.

The inquiry found average Victorian electricity prices had climbed almost 50 per cent, plus inflation, in the past ­decade.

Network costs, mainly the state government-ordered smart meter rollout, were a chief reason.

A combined increase in ­retail costs and margins, and “significant” environmental scheme cost increases, were also blamed.

The report also notes that wholesale price increases “have led to very high profits” for many power generation businesses.

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@KarenCollierHS