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ERAA responds to ESCOSA electricity price proposal

Households wishing to reduce their electricity prices may be interested in the latest development concerning the Essential Services Commission of South Australia (ESCOSA).

Earlier this month, the ESCOSA proposed that there should be a change to the standing electricity contract prices from 2013 to help South Australians to reduce their power bills.

However, in a recent turn of events the Energy Retailers Association of Australia (ERAA) has responded, saying that this decision is not in the best interests of household energy consumers.

ERAA chief executive Cameron O'Reilly urged the ESCOSA to rethink its proposal.

He asked the ESCOSA to consider the potential effects the change could have on the industry in terms of prices, competition and new investment in the SA energy market.

"The regulator has proposed that the wholesale electricity allowance in Standing Contract prices be based on currently low market prices that are due to weak electricity demand, rather than more stable measures that reflect the longer run costs of generation," Mr O'Reilly added.

He noted that in the long term the ESCOSA's proposal has the potential to expose SA energy consumers to the volatility of the wholesale electricity market, which may lead to price increases.

Posted by Charlie Moore