24/10/2014 - 15:11

Electricity prices fall, carbon link debated

24/10/2014 - 15:11

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Energy Minister Mike Nahan has hailed the removal of the carbon price as the reason behind Western Australians receiving an 8 per cent drop in electricity prices.

Electricity prices fall, carbon link debated
Energy Minister Mike Nahan

Energy Minister Mike Nahan has hailed the removal of the carbon price as the reason for an 8 per cent drop in electricity prices in Western Australia.

Dr Nahan said state-owned retailer Synergy was one week away from finalising its process of removing the carbon price and crediting customers who had been charged prior to the repeal date in July.

He said the average Synergy customer would now pay $126 per year less than when the carbon price was in place.

“The carbon tax will go down in history as the most flawed and insidious excise ever imposed on West Australians and its demise is cause for celebration,” Dr Nahan said.

The Australian Bureau of Statistics revealed through its consumer price index data this week that electricity prices had dropped nationally in the September quarter, but has been more cautious about drawing a link with the repeal of the carbon price.

ABS data show Perth’s electricity cost 4.5 per cent less in the September quarter, while across Australia prices fell by 5.1 per cent over the same period.

It said it was not possible to quantify the impact of the removal of the carbon price on price changes measured in the CPI.

The variance in electricity price reductions between the two agencies appears to be due to how the changes were calculated.

While ABS figures take into account a cross section of prices reported to them by field officers and other sources across Australia, the treasury has calculated the eight per cent reduction based on having included an estimated increase in the May budget, which is now being removed.

Synergy has done an outstanding job of responding quickly to the carbon tax being axed and working through more than one million customer accounts which have now dropped by about 8 per cent,” Dr Nahan said.

ABS figures reveal the drop of 4.5 per cent for electricity prices in Perth for the September quarter came after three consecutive quarters of no change, essentially meaning Perth electricity prices were down 4.5 per cent compared to the same time last year.

According to the ABS Perth’s electricity prices have followed a pattern of occasional increases, less frequent decreases and longer periods of no change.

Since the September quarter in 2000, when electricity prices increased 9.3 per cent in Perth they remained unchanged until the June quarter of 2009 when they rose 9.9 per cent, followed by a 15 per cent rise in the following September quarter.

Since the September quarter in 2009 prices have risen in five quarters, dropped twice (down 4.5 per cent during the September 2014 quarter and down 1.1 per cent in the December 2012 quarter) and remained unchanged for 13 quarters.

In August an interim report as part of a statewide review of WA's electricity industry found providing electricity for Western Australians cost at least 125 per cent more than elsewhere in Australia.  

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