Flawed rules helping drive 'unnecessary' price hikes: ACCC

FLAWED regulatory rules was one of the three major problems facing the nation's electricity market, the head of Australia's consumer watchdog has warned.

Australian Competition and Consumer Commission chairman Rod Sims said these problems were driving the "unnecessary" electricity price increases in Australia.

Mr Sims said the three problems which needed to be addressed were: changing the flawed regulatory rules, fixing the merits review process and allowing the regulator to set the reliability standards to be met by network businesses.

All three of those problems were highlighted in last week's Productivity Commission report to a Senate inquiry and a recent report by the Australian Energy Market Commission.

But despite the continued work on reviewing and fixing, Queensland Energy Minister Mark McArdle blamed the rising costs of electricity on under-funding and placing the Australian Energy Regulator under the jurisdiction of the ACCC.

Mr McArdle said the ACCC was "lip-synching" Federal Labor's message and blamed the current prices rises on the former state Labor government.

Mr Sims said the problems would take time to address, and the current debate about reform had "some frustrating and worrying aspects to it".

"While there have been many causes of the recent large increases in electricity prices, the Australian Energy Regulator along with other regulators such as IPART in NSW, have been warning for many years about these three issues driving significant and unnecessary increases in the price of electricity for Australian business and consumers," Mr Sims said.

"Both the ACCC and the AER have a mandate to work in the long-term interests of consumers and this is how it should be."