Why the ACCC electricity inquiry won’t cut your power bill
You're paying twice as much as you did a decade ago.
Earlier this week, the Federal Government asked the Australian Competition and Consumer Commission (ACCC) to launch an inquiry into electricity pricing in Australia. The big question it needs to address: can we do anything about the fact that the average Australian power bill has nearly doubled over the past decade? (That's not including inflation, detail fans.)
It's a complicated problem, not least because of the diverse approaches that different states have taken to privatising the electricity grid. At one extreme, Victoria has a fully deregulated industry. Conversely, whether or not to privatise Western Australia's network was a key issue in the recent state election. (Labor, which was opposed to privatisation, won in a landslide.)
Uncertainty over how we'll transition from relying largely on fossil fuels to a more diverse mix with as much renewable energy as possible has also caused problems with supply and planning. However, that's not one of the issues which the ACCC has been asked to address, so that political hot potato will just have to keep boiling in the parliamentary kitchen.
That, however, isn't the main reason why I'm deeply sceptical about this inquiry making a difference to the average power bill. It's because it's proceeding at the snails' pace typical of such discussions. The preliminary report isn't due until the end of September 2017, with the final results emerging nine months after that. You'll have a lot of bills due during that period.
Meanwhile, the regulator will be chasing a moving target. The Australian Energy Market Commission predicts that this year, the average bill will rise between $28 and $204 (again, it depends on which state you live in). New rules are being introduced this year that could potentially reduce that rise in some instances, but it's not clear what impact those will have. Changes to rules around solar subsidies also kicked in this year, which may impact demand patterns as well.
In short, by the time the inquiry finally reports in June 2018, I suspect the scene will have moved on. And no matter what the ACCC reports, there's no guarantee that the government will actually pay attention to it. At best, policy is informed by such reports, not created by them.
Ultimately, there's also the problem that even if there was a more competitive market overall, evidence suggests the vast majority of Australians wouldn't take advantage of it. Right now, the main strategy we have as consumers to reduce our power bills is to compare what's on offer. I'm certain that will be as true in 2018 as it is right now.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.