The South Australian Government has set up an inquiry into gas and electricity pricing amid concerns that some companies are exploiting the state’s market conditions to make sustained high profits.
The Essential Services Commission of South Australia has announced that it will look into the potential or practice of retailers, generators and any other parties in the electricity or gas industries making sustained super returns at the expense of consumers.
The inquiry will help develop better protections for consumers and businesses against a predicted surge in energy prices including penalties for bad corporate behaviour.
Energy Minister Tom Koutsantonis said that while there was a general recognition that Russia’s invasion of Ukraine has disrupted world energy markets and caused prices of coal and gas to spike, it may not be the only reason for the rise in prices.
“There is almost no transparency on exactly how the level and timing of those international prices have flowed through to domestic prices paid by South Australian consumers,” he said.
“To have confidence in the energy systems, consumers must know whether rises are justified and whether all possible restraints are being employed.”
As a statutory authority, the Essential Services Commission of South Australia has the power to demand entities reveal all relevant information and will be charged to make recommendations about possible changes to regulations to better protect the long-term interests of consumers.
The local government is expected to invite public submissions, consider costs, terms and conditions of supply and transport of fuels, financial and physical risk management, and any other factors it considers relevant.
A draft report must be presented to the government by May next year.
Minister Koutsantonis said protection measures for consumers must be based on accurate, in-depth information about price dynamics in the energy market.
“We will use any and every measure at our disposal to rein in the cost of living and penalise any entity using the global turmoil to exploit consumers,” he said.
The inquiry follows predictions from the Commonwealth Treasury that gas and electricity pricing are on track to increase by 56 per cent over two years and gas prices by 20 per cent annually in the same period.
With AAP