Carbon Tax Not All To Blame For Higher Electricity Prices

AGL Energy says the carbon tax is not completely to blame for higher electricity prices and has called for the deregulation of consumer pricing.

The energy provider said the carbon tax does contribute to increasing electricity prices but the main villain is the lack of state government spending on infrastructure and changing consumption patterns.

AGL wants deregulation of electricity prices so as consumers can be charged according to the time of day or night to reflect these changing consumption patterns.

In a report released on Monday, AGL chairman Jeremy Maycock endorsed the carbon tax and the renewable energy target as two contributors to increasing costs to consumers.

“Both these items are secondary to the main driver of higher costs: capital expenditure on electricity networks (particularly in New South Wales and Queensland),” said Mr Maycock.

Mr Maycock said state government had underinvested in energy infrastructure as demand on the energy network is several times higher than in the 1990’s.

Consumers have also changed consumption patterns, with overall demand is falling due to higher electricity prices while early mornings and early evenings on hot days are now peak times for energy consumption.

“A solution would be to fully deregulate electricity prices and allow energy retailers to offer competitive ‘time of use’ energy pricing,” Mr Maycock said.

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“Consumers unable to change their consumption patterns could be offered financial support to cope with any increased costs,

“However our research has indicated that most consumers would be able to reduce their consumption at peak times.”

Mr Maycock criticised energy regulators, saying that there appeared to be no overall strategy or objective and consequently retailers were being unfairly blamed for higher electricity prices.

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