According to an industry expert, power bills are higher in Western Australia because Western Power has been overestimating how many ‘poles and wires’ it needs to meet electricity demand.
Whilst rooftop solar has been blamed by some for the decline in electricity generation revenue in the state, Murdoch University energy economist Adam McHugh said this is just an excuse for over-estimations. Western Power is required to submit demand forecasts to the economic regulator every five years, these them determine how much Western Power can charge to recoup their investment. Because of “woefully inaccurate” estimates, Prof McHugh has little doubts that this has led to skyrocketing electricity prices.
The Barnett Government recently announced that it was reconsidering the way electricity is priced in the state in order to meet the estimated $50 to $100 million revenue shortfall. The Barnett Government is yet to release details of the report on future electricity price structures. Proposed changes, including a fix-charge component will leave people worse off.
Energy Minister Mike Nahan has conceded a shortfall, however, said Western Power’s electricity demand forecasts were “among the most accurate by any network operator in Australia last year”.
According to Shadow Minister Bill Johnson, Barnett has already broken his promise to keep price increases at or around inflation levels, from July 1 electricity prices were increased at nearly double the rate of inflation.
Electricity prices increased 4 per cent in the most recent round of government hikes this financial year, in total expecting to cost the average household an additional $218 a year.