NETWORK prices within household electricity bills have fallen in Victoria and South Australia since their assets were privatised but increased by more than 100per cent in NSW and Queensland, where they remain in public hands, an Ernst & Young analysis says.
The government is claiming the report on network services torpedoes the ‘‘scare campaign’’ mounted by Labor and unions that higher power prices would flow from privatisation of the ‘‘poles and wires’’, ahead of Coalition MPs convening today to debate the adoption of a sale policy.
The report, commissioned by NSW Treasury in late February, when Mike Baird was still Treasurer, compared the four states and found while electricity retail prices in each had increased, network costs were the major driver of the rises in NSW and Queensland, unlike in Victoria and South Australia, where other factors were at play.
In NSW, network prices, a major component of overall bills, rose an average 122per cent from 1996-97 to 2012-13, and by 140per cent in Queensland.
In Victoria, which privatised its networks in 1995-1996, network prices fell 18per cent to 2013.
In South Australia, which privatised in 1999-2000, there was a 17 per cent reduction from 1998-99 to 2010-11.
In NSW, where the ‘‘gold plating’’ of infrastructure has been criticised, retail prices increased by $136 per megawatt hour, with 67per cent of the rise coming from network prices.
In Victoria, retail prices increased by $61 but network prices fell.
However, the discrepancies, the report said, could be due to various factors, including that NSW and Queensland had ‘‘invested particularly heavily’’ in their networks while businesses in Victoria ‘‘are approaching a stage in their life cycle which may require substantial further investment’’.
The report also briefly considered network performance, noting service levels in South Australia and Victoria had ‘‘generally improved’’ despite concerns that privatisation leads to less reliable services.
The report also compared management of operating costs and capital expenditure, finding government-owned networks overspent compared to their allowances, while the ‘‘opposite is true’’ for those privately owned.
Premier Mike Baird said he was ‘‘not in the business of implementing policies that increase electricity bills for NSW families’’.
‘‘The scare campaign being unleashed by Labor and the unions simply isn’t backed up by facts – network prices have been more than 100per cent higher for NSW’s publicly owned system than in the privately owned Victorian or South Australian networks.’’
But Lake Macquarie independent MP Greg Piper, who called in April for a referendum on the full privatisation, said it would be ‘‘disingenuous’’ for the government to say it would seek a mandate ‘‘knowing they are going to win’’ the next election.
‘‘It’s a nonsense to say they will take this to an election and say they will seek a mandate because they will lose seats at the next election,’’ he said.