00:00These are essentially an annual thing, they happen ahead of the new financial year which
00:08begins in July and what it really amounts to is a setting of the, I suppose the benchmark
00:15price as you mentioned in your introduction, it's the benchmark against which all other
00:21contracts in the market are priced and it acts as some sort of a safety net, albeit
00:27not a particularly good one because it tends to be dearer than you can certainly get if
00:32you actually go and get a competitive offer.
00:36It has risen as you mentioned by up to 9% or the better part of in NSW for example,
00:43it's risen by about 5% on average and as little as 2.5% in some places but it is a resumption
00:52of price increases that we saw in a supercharged way in the wake of Russia's invasion of Ukraine
00:58and the energy crisis it precipitated, so it's more bad news for electricity consumers.
01:05The reasons why, I mean they're varied, suffice to say cost pressures exist right across the
01:12electricity supply chain and the system, whether it's the cost of generating power, keeping
01:18old coal-fired power plants going, whether it's the costs of interest on hugely expensive
01:25poles and wires, transmission and distributions projects, the cost of making them stronger
01:30and expanding the networks or according to Claire Savage, the Chair of the Australian
01:36Energy Regulator today, the cost of the retailers themselves, so their systems, their billing
01:41systems, their cost of acquiring and keeping customers, it's all going up and that's why
01:47we're seeing this unfortunately for consumers today.
01:50And what's been the fallout from today's announcement?
01:55Well Claire Savage was first off the blocks, she was keen to say that this was not a decision
02:02the regulator came to lightly, they tried to strike a balance between trying to ensure
02:08that retailers can make money and be profitable while not sort of making out like bandits.
02:17On the one hand these costs are going up and that seems to be a fact of life, and on the
02:23other hand trying to look after consumers and making sure that there is some protection
02:29for consumers, that there is a price that tries to make sure they don't, in her words,
02:35pay more than they need to or really get gouged.
02:39And so it's a balancing act they try to strike every year.
02:43The government, which if you remember campaigned ahead of the last election on being able to
02:50reduce power prices and saying its plan would lead to lower power prices by something in
02:56the order of $275 against some measure, it's acutely sensitive to this and so the Minister
03:04Chris Bowen has come out today and he has very much defended the government's record
03:09on energy and said that the answer to these problems of high prices lies in more renewable
03:14energy.
03:16One of the reasons for this decision today is spikes caused by coal-fired power stations
03:23breaking down.
03:24Not a day in the last two years have we had a coal-fired power station not break down
03:30somewhere in Australia.
03:31I'm not talking about planned maintenance, I'm talking about unexpected breakdowns which
03:35then see energy prices spike.
03:37We want to replace that power with more reliable, cleaner, cheaper, renewable energy.
03:43Mr Dutton wants to keep that power for longer, that coal-fired power for longer.
03:50So Joe, I mean perhaps unsurprisingly the Coalition has also seized on this announcement
03:56from the Regulator today.
03:58It has said that this was predictable, that it is evidence of a failing plan by the Federal
04:04Government and that the Government is essentially putting all its eggs in one basket which is
04:09renewable energy and storage and I suppose not enough in some of these more conventional
04:15technologies.
04:16It, for its part, wants to build a fleet of nuclear power plants across Australia if it
04:22forms government over a long period of time but here's what the Opposition had to say.
04:28When you tax and spend you drive up inflation and if you do that you can keep giving $300
04:33but as we see today you then push electricity prices up by $1,300.
04:38I want to fix the energy problem, I want to fix the source of people's grief which in
04:43large is the bad economic decisions being made by this Government as well as a bad energy
04:48policy.
04:49If we can do that we can help families and we can help people afford to live again.
04:55It's also worth noting, Joe, that Victoria's Regulator separately released its equivalent
05:03decision today.
05:05Prices in Victoria are barely going up at all.
05:08In other states there are separate arrangements still.
05:10It was a draft by the Australian Energy Regulator so a final decision will come out probably
05:15in the next couple of months.
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