Damning report on power bill misery (cloned for SW 1350529640)
Damning report on power bill misery (cloned for SW 1350529640)

Household power bills would be cut by up to $250 a year and billions of dollars saved under a string of proposals from the Productivity Commission to overhaul the nation's electricity network.

In one of its most damning reports, out today, the commission says the system of electricity regulation, government ownership and over-investment had failed the country.

It found a quarter of household power bills went towards paying for just 40 hours of electricity a year used to power air-conditioning on summer's hottest days.

Under its proposals, States would sell their power networks, retail price controls would be ditched, smart meters would be installed across the nation and a consumer body established.

Inquiry commissioner Philip Weickhardt said Australia had been let down by the regulatory system governing the power system at a huge cost to consumers.

"There is no quick fix, but our proposed reforms can deliver a more efficient system and potentially save billions," he said.

The report was ordered this year amid concerns about a sharp increase in retail power prices. In WA, prices have risen more than 50 per cent since 2009.

It found spending on power networks had been the main contributor to the rise in prices, with more than 35 per cent of WA's rise directly linked to network upgrades.

Regulations on State-owned network businesses had failed to keep a lid on the push by firms to maximise profits at the expense of consumers.

According to the commission, State-owned network firms such as Western Power should be privatised. And regulations governing retail prices - set by the State Government in WA - should be axed.

Power firms would be able to charge "critical peak prices" at times of high demand. But they would also be able to slash power prices at times of lower demand.

Simply moving to critical peak pricing would save households between $100 and $250 a year after the cost of smart meters, the commission report said.

The biggest winners would be low-income households that subsidise power-hungry high income families. The commission also targets the Federal Opposition's direct action policy, saying all subsidies for rooftop solar power systems should be abolished.

The Opposition plans to offer $1000 subsidies to install a million solar systems on roofs by 2020.

State-based feed-in tariffs for solar power systems should also be axed. WA ended its feed-in tariff last year after the scheme's cost was discovered to have blown out by hundreds of millions of dollars.

The commission found the Federal Government's carbon tax "obviated" the need for such schemes, arguing it was a cheaper way to cut greenhouse emissions.

The West Australian

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