Fears of $400 million-a-year power price gouge trigger probe

Australia’s energy watchdog will investigate suspicions that electricity networks and gas pipelines have overcharged consumers by $400 million a year to cover their corporate tax bills.

The cost of poles and wires used to deliver electricity
 makes up 48 per cent of an average electricity bill.

Network charges have been the single biggest factor in rising household electricity bills over the past decade. The charges cover the cost of the "poles and wires" used to transmit and distribute electricity.

Electricity networks and gas pipeline businesses are allowed to cover their corporate tax liabilities by passing on the cost to consumers – usually totalling about $600 million a year.

However, it is understood the actual tax bill incurred by the networks may be about $200 million a year. This means consumers may have been charged three times more than needed to cover the tax liabilities, a possibility Energy Minister Josh Frydenberg said was ‘‘totally unacceptable’’.

Read Nicole Hasham’s story from The Age - “Fears of $400 million-a-year power price gouge trigger probe.”