(MSN 9News) A NSW government rebate will be expanded to more than one million electricity consumers, to allay fears some families will be left in the dark by the state’s largest-ever electricity price increases.
Electricity bills in NSW will soar by up to a total of 64 per cent over the next three years, with the federal government’s proposed carbon pollution reduction scheme (CPRS) and rising network infrastructure costs largely to blame.
The outcome has sparked fears other states and territories could be similarly affected if the Carbon Reduction Scheme goes ahead in 20011 as planned.
The NSW hikes, which are even higher than those first proposed by the Independent Pricing and Regulatory Tribunal (IPART) in December, will see average electricity bills rocketing by between $577 and $918 a year by 2013.
Acting chairman and chief executive Jim Cox said the increases were the biggest ever presided over by the tribunal and conceded there could be similar rises in other states.
“I don’t think we’ve had anything as big as this one,” he said.
NSW Energy Minister John Robertson said the government would expand the energy rebate to an additional 275,000 people.
Assistance will now be given to all Commonwealth healthcare card holders, low-income card holders, students, and households receiving farm family assistance.
One million customers will be covered by the $145 annual rebate, about a third of the state’s households.
Mr Robertson and NSW Premier Kristina Keneally acknowledged the price hikes would burden NSW families, already struggling under rising living costs.
“I’m disappointed with IPART’s decision today to increase electricity prices,” Mr Robertson said.
“We know this is going to hit families hard.”
The government would also legislate for an energy price comparison website, so consumers could get “the best deal possible for their energy”, Mr Robertson said.
Ms Keneally said she was concerned about the impact of the hikes but deflected criticism from the opposition and business that a lack of government investment in electricity infrastructure had caused the increases.
“To suggest that energy costs will not increase either with or without IPART is nonsense,” Ms Keneally said.
“What matters is that we have practical solutions that we can offer to support families in meeting those costs, and that is precisely what we are delivering.”
Welfare group the Council of Social Service of NSW (NCOSS) welcomed the rebate boost, saying it would provide “real relief” to the state’s most vulnerable.
“While the price increases will still cause difficulties for low income households, these changes to the energy rebate scheme are a step in the right direction,” NCOSS director Alison Peters said.
But business groups were less supportive, blaming poor investment in electricity infrastructure for the price hike.
“The state government stripped dividends from electricity companies and under invested in necessary poles and wires,” NSW Business Chamber policy director Paul Orton said.
The opposition called on the Keneally government to reject IPART’s determination.
“The government should reject these costs and come back to something families could afford,” opposition energy spokesman Duncan Gay said.
The IPART determination was also a blow to the Rudd government and its stalled CPRS legislation, which has been twice rejected by the Senate.
Federal Climate Change Minister Penny Wong defended the legislation, saying NSW network costs were to blame.
“Retail electricity prices for a typical residential customer in NSW will rise … as a result of network factors that are entirely unrelated to the carbon pollution reduction scheme,” she said.
Even if it doesn’t go ahead, NSW will still face higher electricity costs with prices set to rise by up to 42 per cent by 2013.
Federal Nationals Leader Warren Truss said Australia’s other electricity consumers risked higher prices.
“The government is proposing a tax that will hit every family, but yet do nothing to help the environment or lower temperatures,” he said.