Forget fears of future shocks to Victoria’s electricity supply — one major Goulburn Valley producer says industry is already hurting.
Kyvalley Dairy chief executive officer Wayne Mulcahy said his Kyabram company had been handed a 50 per cent increase to its electricity costs in just 12 months.
The increase has been a major hit for the company, which employs about 85 people, and will have a long-term impact on the business.
‘‘We spoke to five providers, everyone was putting their prices up,’’ Mr Mulcahy said.
‘‘They said it was due to the rise of renewables.’’
As a major producer, he negotiates his electricity contracts, which typically go for three years.
‘‘But there is a clause in the contracts that if there is a significant change in the price, then they are free to negotiate their prices during the term of the contract.
‘‘Which means it is hardly worth the paper it is written on.’’
In the past few months his company was paying about $19000 a month for its power, but that has jumped to $27000 a month.
‘‘It is a huge whack in one hit.’’
Mr Mulcahy said the company had been looking at expanding, which would result in more jobs, but this looked less certain now.
‘‘It would result in the factory using more power, but we are rethinking all that.’’
With the closure of Hazelwood Power Station on Friday, he fears more price rises could be on the way, and he blamed a failure of governments of both sides and all levels for the uncertainty.
‘‘Hazelwood is very old and it does need to be shut down soon, but there should have been an energy plan,’’ he said.
‘‘There are no new power plants coming online, so it is an opportunity for all the generators to jack the prices up.’’