PIAA backs ACCC energy recommendations

PIAA backs ACCC energy recommendations
Sims says electricity market broken, Macaulay says it is destroying jobs

The Printing Industries Association of Australia (PIAA) is throwing its support behind the ACCC’s blueprint outlining its national inquiry into electricity, with recommended changes to combat escalating power prices.

The ACCC concludes in its Retail Electricity Pricing Inquiry Report energy costs are where they are now because of lack of competition, regulation and policy; and inconsistent and confusing marketing of pricing to consumers. The consumer watchdog saying if its changes were implemented, it would save small businesses a quarter of their energy costs.

Rod Sims, chair of the ACCC says, “The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses.

“There are many reasons Australia has the electricity affordability issues we are now facing. Wholesale and retail markets are too concentrated. Regulation and poorly designed policy have added significant costs to electricity bills. Retailers’ marketing of discounts are inconsistent and confusing to consumers and have left many consumers on excessively high standing offers.”

Andrew Macaulay, CEO of the PIAA says, “Printing Industries is supportive of Rod Sims, he has made valid points that the Association has been making for a long time. The energy market is broken and it is destructive for small business. It is destroying jobs.

“The PIAA is meeting with key industry groups to prepare a response to the federal government. Now is the time to act.

“The government needs to act decisively. In the past it has interfered in ways it should not have and as a consequence, it has only increased energy costs. Unfortunately, it needs to interfere again to break the oligopoly of the few suppliers on the east coast. It is a significant issue for Qld, NSW, Vic and SA.

[Related: PIAA backs Qld budget]

“The government has made misstep after misstep in the past and the opposition has only exacerbated the problem.

“What is concerning our members in the feedback we get, is they are seeing both sides of politics talk about energy as if there is no problem and they have all the time in the world. Meanwhile, small businesses are suffering as costs are going through the roof at the moment, because of poor policy and the prime minister is dithering. It is urgent that the government acts.”

Walter Kuhn, president of the PIAA and founder and owner of Qld based Kuhn Corp, says “The majority of feedback from our members is that energy costs are out of control and there is a fear we could lose manufacturing in Australia. It is unsustainable.

“You come to the realisation that you need to take a staff member off and do more work yourself, as energy costs will rise and you have no other way of absorbing it. It is detrimental to the industry, it is losing jobs. Businesses will have to cut down on employment to cover costs.”

The recommendations made by the ACCC include the Australian Energy Regulator (AER) setting a default price across all retailers, changes to marketing of prices and discounts along with billing, voluntary write downs of over investment.

The ACCC says commercial and industrial customers, the heaviest users, could see electricity costs decrease on average by 26 per cent. It also says a default price in place of a standing offer could save small and medium business around $1450-$2250 or around 30-35 per cent per year, with more than 20 per cent of small businesses currently being on high standing offers.

Sims says, “One of the most important recommendations is to move customers off excessively high standing offers to a new standard default offer to be independently set by the Australian Energy Regulator.

[Related: Printer's bill doubles despite cutting power]

“Too many consumers and small business customers have given up trying to understand offers and switch in a confusing retail electricity market. Big changes are required to make it easier for consumers and businesses to understand market offers and improve competition.

“Many small to medium businesses operate on very small margins, and cannot afford the increases to their costs that have occurred over past years.

“Commercial and industrial customers, like mining and manufacturing companies, have watched what has been a relative competitive advantage to them, affordable electricity, now threatening their viability.”

Notably, the ACCC has also recommended abolishing tariff schemes that feed into subsidies for solar customers, at an extra cost to non-solar patrons. It says other states should be following the lead of Queensland, where solar subsidies come out of the state government’s budget. It has also recommended abolishing the Small-scale Renewable Energy Scheme (SRES), which gives subsidies for solar installation costs.

The report says solar customers pay, on average, $538 less than non-solar customers each year, with the ACCC saying solar customers are at an unfair advantage. Many printers have installed solar panels as a way of combatting rising energy costs, the most recent being Complete Colour and Vivad in Melbourne, along with Impact Packaging installing Sydney’s first solar industrial farm in the last month.

Kuhn installed solar panels in his business three years ago to cover part of his company’s usage, but he says energy costs have risen so much the power he pays for out of the grid overrides any savings.

Kuhn says, “Three and a half years ago, we installed $30, 000 of solar panels. At the time they produced around half the power we needed, but since then power prices have more than doubled. Even though we are saving money with the panels, we are also paying more than we were originally in total, because of the cost of power from the grid.

“We are doing whatever we can do and lobbying everyone. If we do not do anything, it will become a runaway train.”

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