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Webinar: Unaffordable power - Why governments need to tackle monopoly network super profits

December 05, 2022
Simon Orme and Johanna Bowyer and Tristan Edis

Unaffordable power - why governments need to tackle monopoly network super profits from Smart Energy Council on Vimeo.

Key Findings

Over 2014-2021, Australian consumers were charged $10 billion more for electricity network services than necessary to ensure a reliable service.

Weaknesses in the regulatory system have allowed these excessively high returns or “supernormal profits” in favour of network shareholders, diverting funds that could have been invested in Australia's necessary energy transition. 

Correcting regulatory failure requires substantial reforms including changes to the National Electricity Law and Rules, monitoring and reporting on supernormal profits, improving consumer representation in regulatory processes and ensuring frameworks for future investment are efficient.

This is a recording of the IEEFA / Smart Energy Council webinar held on 1 December 2022 entitled "Unaffordable power - why governments need to tackle monopoly network super profits".

With the Australian government announcing it will take action to constrain gas companies’ ‘glut of greed’, it’s also time to tackle monopoly network super-profits and inflated prices to reduce electricity bills.

Coordinated government action is required to fix flaws in the current system for regulating monopoly electricity networks.

In doing so, power bills could be reduced a further $100 - $150 per customer per year for customers in ten of the twelve distribution networks in the national electricity market.

In this webinar, former New South Wales Treasury officer and IEEFA guest contributor Simon Orme covered:

  • Findings of his recent IEEFA report on the impact of network regulation on power bills
  • How networks have been able to set prices above costs to the tune of $800 - $1200 over an eight-year period
  • How returns can’t be explained by efficient performance and incentives
  • How supernormal profits have hindered Australia’s necessary energy transition
  • Steps the government could take to fix the issue.

Hosted by Steve Blume, President, Smart Energy Council with speakers Simon Orme - Director, Tahu Consulting, Johanna Bowyer - Lead Research Analyst, Australian Electricity, IEEFA and Tristan Edis - Director of Analysis and Advisory, Green Energy Markets.

Simon Orme

Simon Orme is a director at Tahu Consulting. As a former New Zealand and New South Wales Treasury officer Simon led projects to introduce regular performance monitoring of government-owned corporations, including the consistent reporting of supernormal profits and losses.

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Johanna Bowyer

Johanna Bowyer is the Lead Research Analyst for Australian Electricity at IEEFA. Her research is focused on trends in the National Electricity Market, energy policy and decarbonisation.

Prior to joining IEEFA, Johanna researched distribution networks at CSIRO, worked as an engineer at Solar Analytics and Suntech and worked as a management consultant at Kearney.

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Tristan Edis

Tristan Edis is the Director - Analysis and Advisory at Green Energy Markets. Tristan’s involvement in the clean energy sector and related government climate change and energy policy issues began back in 2000. He has worked at the Australian Government’s Greenhouse Office, the Clean Energy Council; Ernst & Young, helped establish the energy research program at the Grattan Institute, and ran a website providing news and analysis on energy and carbon market issues called Climate Spectator.

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