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New electricity authority faces its first challenge
Electricity wholesale prices have shot up this month. This means that all retail electricity prices will rise soon.
The prices rose this month to almost three times the benchmark price. The benchmark is the price of electricity from new power stations.
What changed this year is that “reliability of supply” is now provided by the market, not by Government.
The new Electricity Authority is supposed to be able to put controls on the generators’ ability to jack up prices – but only after extensive consultation.
In the meantime we rely on Ministerial pressure to force wholesale prices back to a reasonable level. Until then, high spot prices will guarantee improved profits for all generators.
“The market” is not leading to efficient pricing. High spot prices have the same effect on all competing retailers, This means all retail prices will rise again, soon.
The Domestic Energy Users’ Network calls on the Minister to instruct the Electricity Authority to calculate the likely effect on domestic power bills of the recent high spot prices.
ENDS
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