Forget what you've heard about coal. Electricity prices are going up regardless

I'll give it to you cold. Electricity prices are going up. They've been too low for too long. Malcolm Turnbull, Treasurer Scott Morrison and their Energy Minister, Josh Frydenberg, are happy to make political capital out of the inevitable return to normality (by blaming Labor and fondling pieces of coal in Parliament) but they are careful not to say they can stop it. Frydenberg talks about "reducing pressure" on prices rather than keeping them down.

Illustration: Matt Davidson 

Prices have been unnaturally low because we've had more generators able to make the stuff than we have had people wanting to use it. Usage per person started falling in 2010 and has only recently begun to recover. To sell power, generators have had to cut prices. Worse still, three of the biggest were bought by their present owners for next to nothing. That means they can afford to unload electricity for little more than the cost of making it, pushing down the prices that can be charged by the others who need to also cover the costs of set-up.

Read Peter Martin’s comment in today’s Melbourne Age - “Forget what you've heard about coal. Electricity prices are going up regardless.”