Electricity costs not fairly applied

Grattan Institute recommends higher costs for peak users.
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01.Heavy peak users should pay more: Grattan

Peak users should pay higher electricity network rates

A new report by the Grattan Institute calls for a rethink of the way consumers are charged for electricity. 

Under the current arrangement, customers have to pay the same fixed rate for the poles-and-wires component of their electricity bills regardless of how much strain they put on the network.

The Grattan Institute proposes a change in areas where infrastructure upgrades are under consideration that would see customers pay according to how much pressure they put on the network rather than light and moderate users being subject to the same rates as heavy peak users.

Such an approach would require reliable smart meters that allow retailers to track which customers are using the most power at peak times, the authors say.

Had such a system been in place in areas where networks have required upgrading in recent years due to heavy usage, it would have meant a savings of $7.8bn of the $17.6bn outlay for the new infrastructure and correspondingly lower bills for customers, the report says.

"In the five years to 2013, the average household power bill rose 70 per cent: from $970 to $1660 a year," the report says. "The prices we pay are also unfair: some people are paying more than their fair share. These consumers are paying on average about $150 a year more than they should to subsidise other consumers."



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