The Council for Australian Governments will discuss a range of factors concerning the electricity sector this Friday, central to the discussion is electricity prices and the need to deliver savings to consumers in the wake of rapidly increasing prices.

The Grattan Institute recently published a report on making electricity prices cheaper, where changes if implemented would save customers $2 billion a year, or approximately $100 for every Australian home. The report outlines flaws in the current system and what needs to be done, including empowering the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator to implement clear rules and reliability standards at the national level, privatising companies that are not operating as efficiently as private enterprises, and moving electricity prices more in line with market demand.

Avoiding future investment that will add up to $250 a year to consumers will be central to the Friday discussion, with Julia Gillard calling for an end to the “gold-plating of the network” and the introduction of smart meters and deregulation of electricity tariffs. NSW and Queensland are both resisting change, Queensland Energy Minister, Mark McArdle, saying ”Queensland will not move towards price deregulation.” The government is calling for more power for the Australian Energy Regulator, however, have rejected that the regulator be made completely independent from the ACCC.

Member of the opposition Christopher Pyne says Prime Minister Julia Gillard electricity plans distract from the real issue of the effect of the carbon tax on electricity prices.