Is re-regulation the solution to Australia’s electricity price shock?

Any reform of the electricity prices will need to
beyond the retail market to electricity generation
and networks. 

Last week, Prime Minister Malcolm Turnbull summoned the major electricity retailers to Canberra, to eyeball them and to tell them that everyone needs to do better. Putting aside the awkward staring contest, the parties did manage to agree on some small but important measures. Under the deal, the information available to consumers should improve, enabling them to more easily compare electricity offers and switch to a better offer.

But does this deal really go far enough for consumers?

A review of energy retail markets in Victoria, released on Sunday, goes a whole lot further. Led by former deputy premier of Victoria, John Thwaites, it calls for a new ‘Basic Service Offer’ – a regulated price for electricity. Until now, Victoria has led the way in opening up the retail electricity sector to competition; re-regulation would represent a major U-turn.

Kate Griffiths. 

During the 1990s, Australian governments began to break up the government-owned businesses responsible for electricity supply in each state, and introduced competition to the retail and wholesale links in the supply chain.

The idea was that competition would deliver lower prices and encourage retailers to offer better and more innovative products and services. Anyone who pays an electricity bill knows that the reality hasn’t matched the promise.

Read the Pursuit story by Kate Griffiths from the University of Melbourne - “Is re-regulation the solution to Australia’s electricity price shock?"

(Those ideologically hidebound to the idea of a free market have broken Australia’s energy system. Implicit in their manner of operation is the privatisation of the profits and the socialising of the costs and so the re-regulation discussed by Kate Griffiths is the only possible solution to making energy - the essence of modern life - sustainable and so again affordable for most Australians. Be wary of those who suggest that more of what caused the trouble will resolve and repair Australia’s energy systems - Robert McLean)