PLANS by the State Government to jack up electricity tariffs 17 per cent over the next three years may be overblown after it emerged customers were already paying almost the full price for power.
At an Upper House estimates hearing into its annual report, State-owned power provider Synergy revealed that the gap between what households paid for electricity and the cost of providing the service was just 8.3 per cent.
Treasurer Ben Wyatt later clarified the remarks by saying the correct figure, which was provided by the Government’s energy adviser, the Public Utilities Office, was 8.8 per cent.
Regardless, the difference suggests years of pain borne by consumers to bring power prices up to cost-reflective levels should soon be over.
It also comes despite State Budget papers showing electricity tariffs will increase 7 per cent next financial year, before rising 5.6 per cent and 3.5 per cent in the following two years.
In one of his first major decisions as Trea-surer, Mr Wyatt imposed a flat 10.9 per cent — $169 — increase on electricity prices for 2017-18, taking a typical household bill to $1722 a year.
The decision was aimed at winding back the huge operating subsidy paid to Synergy and shoring up the utility’s position in the face of an onslaught by small-scale solar installations, which have slashed its revenues.
Mr Wyatt has also flagged moves to end Synergy’s longstanding monopoly in the residential market and open it up to competition and indicated cost-reflective tariffs were a necessary precursor.
Yesterday, the Treasurer confirmed the gap between Synergy’s costs and what households paid was only 8.8 per cent but said any decisions about price increases would not be made until May’s Budget.
“As part of the 2017-18 Budget, residential tariffs remain 8.8 per cent below what it cost to provide the service,” Mr Wyatt said.
“As per every service provided by Government, price increases are required to reflect forecast increases in costs. Updated tariff price paths will be released in the 2018-19 Budget.”
Efforts by Synergy to bridge the price gap have been made harder by its soft performance, with the utility revealing retail sales fell 7.2 per cent in 2016-17.