The parasites are fixed upon the host:
Top energy companies have raised the alarm on official calculations used to guide electricity bills, warning their customer profit margins have sunk to decade lows and soured the appetite of the biggest operators to invest money in the sector.
The energy companies’ move to keep in place a set profit margin for electricity retailers may stifle efforts to reduce household bills when the next round of price caps take effect from July 1 next year.
The Australian Energy Council – representing big power companies such as AGL Energy, Origin Energy and EnergyAustralia – commissioned consultancy Marsden Jacob Associates to conduct a private probe into how the national regulator determined the default market offer, which sets a price cap on how much energy retailers can charge consumers.
It is fair to say that margins for retailers have been shoved around a bit in recent years. However, the differences in results across companies show that some got their hedging right while others did not. Why should consumers pay for that? It’s called a “market”:
There is no excuse for the AER to do anything other than smash the default market price for billing lower.
In the six-month reference period up to the end of last year, the average power spot price was $269Mwh.
This year, it is $86.
In the six-month reference period leading up to the end of 2023, power futures price averaged around $130Mwh.
This year, it is about $95.
The default market price must be shredded to push the wholesale power price crash through to households and businesses.
Were there a government worthy of the name, they should have forced the AER onto quarterly price assessments to get the bill relief through months ago.
Arguments about whether firms will invest into energy transition based upon margins are balderdash. Chris Bowen’s excellent Capacity Investment Scheme (CIS) will crowd in the investment anyway.
Retailers’ margins must not be supported via public gouging.
