Agricultural groups say independent research that shows failure of regulation and monitoring is resulting in electricity prices exceeding efficient supply costs; confirms that the electricity market at every level is failing to work in the interests of consumers and the nation.
National Irrigators Council chief executive officer Steve Whan said Australia’s energy price crisis was jeopardising the country’s capacity to provide affordable food and fibre for Australians and cruelling our international competitiveness.
Last week the Agricultural Industries Energy Task Force made a submission to the ACCC’s Electricity Supply and Prices Inquiry.
The submission includes a research paper prepared for the task force by the independent Sapere Research Group.
Mr Whan said many Australian consumers probably did not realise that many of their foods come from irrigated agriculture, or that those irrigators were seeing their costs explode as electricity prices increased.
‘‘The hard-working people that produce our dairy products, fruit and vegetables, cotton and sugar, all use large quantities of power. It runs the pumps to water the crops, it powers the packing sheds and dairies and it keeps the product cool so it arrives fresh.
‘‘This submission provides case studies that should worry policy makers. One tells of a Queensland Irrigation district which says that demand tariffs post 2020 will lead to the scheme close down — risking $35million of infrastructure being mothballed.
‘‘There are Victorian dairy farmers who are coping not only with low prices but also massive cost increases in running the dairy.’’
A horticulturalist in South Australia who has installed five diesel generators to guarantee reliability also faces a 126 per cent increase in power cost for the packing shed, and a small NSW Irrigation scheme is facing a 40 per cent increase amounting to about $100000 in extra costs.
‘‘The ACCC has been given an important task dealing with this complex problem. There are issues identified in the Finkel report that are outside the ACCC’s remit. They require national leadership.
‘‘But the ACCC certainly has the opportunity to recommend very real change to the electricity market.’’
Mr Whan said this study made it clear that the market was currently operating in a way that allowed owners of electricity assets and retailers to gouge returns that were far higher than were economically justified, and consumers were paying for it.
‘‘Irrigators recognise that there is a complicated mix of a need for policy certainty, along with a strong need for market reform to fix this crisis.’’