Regulator: It’s OK to charge customers more for energy

As Malcolm Turnbull invites eight heads of energy retailers to Canberra on Wednesday for a dressing down, or at least a salad dressing, on consumer energy bills, he will realise he is not just facing industry resistance but institutional inertia too.

The defense of Australia’s ridiculously high electricity bills is often made – by the likes of regulators and rule-makers such as the AEMC – along the lines that if consumers could be bothered, they could find cheaper prices.

Well and good, but it begs the question: Why should those who do not have the time, or inclination, or knowledge, to shop around for better deals be charged such usurious prices for what is supposed to be an essential service?

This will be a major theme of Turnbull’s chat with the retail chiefs on Wednesday, but this little gem, below, from the NSW-based pricing regulator IPART highlights the institutional resistance.

It is part of IPART’s submission to the ACCC inquiry into energy prices, and its focus on the opacity of the retail sector, and the bidding practices in the wholesale market.

As we have written, confusion is profit for the energy industry, and this suggests a rubber-stamp of that approach by the regulators who are supposed to be keeping them in check.

Basically, it suggests that charging really high prices to consumers is fair. It is the consumer’s fault if they don’t go searching for better deals.

Given that discounts obtained by the proactive can be up to half of their bill, then it is probably reasonable to assume that the others are making up the difference, and paying possibly 50 per cent more than they should.

After all, if a national electricity market cannot be designed to provide cheaper electricity than a single diesel generator, then what was the point of doing it in the first place?

This is the fundamental issue that many consumers are wrestling with. Now, thanks to the falling cost of solar and battery storage technology, there are cleaner and cheaper ways of dumping the grid.

Until the regulators get their minds around this, it seems they will be incapable of making any equitable decision around the future of the grid, a point that the welfare lobby has been at pains to make, even if we’d rather they spend more time demonising regulators than leaving the door open to demonise the clean energy solutions.