Report calls for measures to drive down power prices

A NATIONAL consumer advocacy body must be created and the eastern states must privatise their electricity transmission networks to help drive down power prices, a Productivity Commission draft report will recommend on Thursday.

The commission, which has been investigating the best ways to reduce the price consumers pay for their electricity supply, has released its 55 draft recommendations to improve the way the national energy market operates.

In both Queensland and New South Wales, since 2007, household power prices have risen more than 70%, with further increases nationally of about 37% forecast to 2013-14.

In more than 1000 pages of analysis and recommendations, the commission looked at various parts of the complex energy market, with a focus on reducing the costs paid at the consumer end of the market.

A chief recommendation was that the states fully privatise their transmission networks, or if the state governments were unwilling to privatise, to place further regulations on the way the networks operate and charge retailers.

Another change, previously suggested by consumer advocacy groups such as Choice, was to create an industry-funded consumer body.

The consumer body, the commission recommends, should include staff with sufficient expertise to also advice the energy regulator and market commission.

Inquiry commissioner Philip Weickhardt said the current regulatory regime was undermining the capacity of the networks to run their businesses efficiently, creating barriers to consumer involvement in the market.

The huge draft report was released to create more public debate about the electricity market in the southern and eastern states, and possibly lead to further reform.

Some similar major changes to those recommended by the commission have also been considered by the Standing Council on Resources and Energy and the Council of Australian Governments.