Energy profits hurt farmers

By Country News

Energy networks are making excessive profits, with their results $2.6billion higher than they should be, according to an independent report.

And it is costing the average irrigator $6000.

The report, released by the National Irrigators Council, a member of the Agriculture Industries Energy Taskforce, slammed the energy companies and said they were pushing farmers to the brink.

‘‘Australian agriculture is struggling to remain competitive under the burden of massive increases in energy prices,’’ NIC chief executive officer Steve Whan said.

‘‘Frankly, if this problem isn’t fixed, we can forget about being the food bowl for Asia, and we can forget about the tens of thousands of jobs that would generate.’’

The independent report by Sapere Research Group compared profit data recently released by the Australian Energy Regulator, with profits allowed under the AER’s rate of return guidelines.

‘‘We funded this study because bizarrely the AER is proposing to issue a new rate of return guideline which does not include analysis of actual profits being made by the electricity networks,’’ Mr Whan said.

Sapere’s research used AER-published profit data for 18 companies covering the four years up to 2016-17.

The report concludes that network financing costs are significantly lower than allowed for in the weighted average cost of capital.

The report states ‘‘super-normal, or monopoly, returns are in breach of the National Electricity Rules’’.

Mr Whan said the taskforce believed irrigators should be paying a maximum of 8¢ per kw/h for electrons and 8¢ for supply.