The cartel is back, baby.
And so are ludicrous electricity prices.
Bowen is the great fiddler. The Australian.
The Albanese government’s planned overhaul of household electricity price caps could put small energy retailers surviving on razor-thin profit margins out of business.
Federal Energy Minister Chris Bowen confirmed the government would review the Default Market Offer (DMO) – the benchmark power price in NSW, Queensland and South Australia – with a view to stripping out allowances that protect retailer margins.
The idea is to bring the national standard into closer alignment with Victoria’s more tightly regulated counterpart, the Victorian Default Offer (VDO), which will rise by less than 1 per cent in 2024–25.
There are 98 registered electricity retailers at the AEMO. Who cares if we lose a few by tightening what should always have been a cost-plus model?
The larger issue is that the retail component is tiny versus generation and transmission:
Bowen may get 1% out of his reform when crushing the gas cartel would deliver 15-20% in price cuts.
And why isn’t Bowen doing the same reform of tightening the cost plus model with the state-run transmission companies, which game the living crap out of the system.
Aussie electricity bills could be slashed by 30-40% by a determined reformer.
Which Bowen sure is not.
