Consumers will face an electricity price shock from 1 July 2009 with electricity prices to rise around 20%. This means the 'average customer' will face a rise of between $180 to $200 per year. The Independent Pricing and Regulatory Tribunal (IPART), which approved the price rise in an announcement on 20 May 2009, indicated that the rise was a result of increased network changes, wholesale energy charges and the decision in 2007 to make electricity prices 'cost reflective'.

To its credit IPART recognised that these increases would have a substantial impact on low income households. Hence, IPART has recommended bringing forward a package of measures to assist low income households with their energy bills. These measures include:

• increasing pensioner rebates from $112 to $130 per annum, indexed thereafter;
• extending energy rebates to include recipients of Carer Allowances (child under 16), Sickness Allowances and Special Benefits;
• introducing a "Customer Assistance Policy" for small domestic customers; and
• increasing the level of funding under the current Energy Accounts Payment Assistance scheme.

These worth some $272 million over five years, were first proposed in 2008 as part of the (now failed) electricity privatisation and were confirmed as part of the revised 'energy reform' measures.

The NSW Government has responded by announcing that it will bring forward these measures to commence on 1 July 2009 rather than wait until the sale of the retail arms of the government owned energy companies. NCOSS welcomes this announcement but awaits details of the customer assistance policy for small domestic customers.

IPART also recommended that the NSW Government consider indexing the rebate to energy prices rather than the Consumer Price Index. As electricity prices are rising faster than other prices, indexing the rebate to electricity prices will reflect changes in electricity bills. NCOSS welcomes this recommendation.

IPART suggested that the NSW Government examine expanding the eligibility criteria for the pensioner rebates to holders of Commonwealth Health Care Cards. NCOSS has long been an advocate of extending energy rebates to all Commonwealth Health Care Card holders and calls on the NSW Government to adopt this measure immediately.

The NSW Government has also announced that the Low Income Household Refit Program has moved from the pilot phase and commenced a rollout in western Sydney. This program assists low income households to reduce their energy bills by around $100 per year by providing free advice and energy saving devices such as compact fluorescent light globes.

The combination of the Low Income Household Refit Program and the assistance measures will significantly reduce the impact of the price rises announced by IPART. NCOSS remains concerned that some low income households remain ineligible for both electricity rebates and the refit program.

Information

• Dev Mukherjee, NCOSS Senior Policy Officer
  phone: 9211 2599, ext 116
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