The state’s economic watchdog says electricity retailer Synergy would need to hike residential electricity bills by 23 per cent on average, or $353 per year, to ensure taxpayers are not covering the gap between costs of supply and revenue.
Western Australia’s Economic Regulation Authority released its draft report assessing retail electricity tariffs today, saying they needed to be increased by 15.8 per cent across the board to eliminate taxpayer subsidies.
The ERA said 8.2 per cent of the tariffs increase was due to the federal government’s carbon tax scheme, to be introduced from July 1, while 5.1 per cent was catch-up for costs that increased during the decade when tariffs were frozen.
The remainder of the increase (2.5 per cent) relates to inflation, the ERA said.
According to the ERA, the level of increase varies across customer categories.
Residential customers would be faced with a 23.1 per cent hike, equating to an increase of $353 on typical annual household electricity bills.
For other customer categories, the ERA said tariffs would need to decrease to reflect costs.
For small contestable customers, average tariffs would need to decrease by 9.3 per cent, the ERA said.
The ERA, however, said the government’s current scheme of subsidising Horizon Power customers in the north of the state through a levy on electricity customers in the south west of WA would add another 7.3 per cent to the average residential tariff.
Also today, the ERA said Synergy’s portfolio of generation contracts were “not optimal”, recommending procurement costs be lowered by 3 per cent.