NSW looks to lower electricity prices

Cuts back residential Solar Bonus Scheme.

The NSW Government has launched an investigation into the state's electricity prices, which rose by up to 13 percent in the past year.

The increase was attributed to rising electricity network charges, which covered costs of maintaining and refurbishing wires, cables, power poles and substations.

Retail energy price regulator IPART expected increases of 20 percent for Integral Energy customers, 36 percent for EnergyAustralia customers, and 42 percent for Country Energy customers by 2012/13.

For comparison, ACT electricity prices rose 2.35 percent in the past year. WA tariffs increased 18 percent for households and up to 22.1 percent for small businesses.

NSW Premier Kristina Keneally yesterday called for a reassessment of the state's plan to spend $17.9 billion on electricity infrastructure between 2009 and 2014.

"Given the rising costs of electricity we will undertake this inquiry to be certain that the current rate of investment in electricity infrastructure represents the best value for money for NSW households," Keneally stated.

Industry and Investment NSW and Australian Energy Market Operator officials were asked to consider options to reduce or defer network charges, and report to the NSW Minister of Energy by year-end.

The State Government also rolled back its Solar Bonus Scheme that offered households with solar and wind power generators 60 cents per kilowatt hour of energy they fed back to the grid.

Following a scheduled review of the program, the Government cut the feed-in tariff to 20 cents per kilowatt hour yesterday.

The move was expected to cut costs by $2.5 billion to 2016 - savings that the Government hoped would be passed on from energy providers to consumers.

But it was labelled "a gross mistreatment of small business" by the National Electrical and Communications Association.

"The result of lowering the feed in tariff ... will be that a significant number of electrical businesses still recovering from the global financial crisis may go bust," said association chief Lindsay Le Compte.

"It is as if they just do not care about the massive effect of their decisions on the many mum and dad businesses that have made the decisions to spent hard earned money establishing their businesses to deliver solar power systems to the people of NSW."

A spokesman for NSW Energy Minster Paul Lynch said the scheme was intended for NSW residential customers, and not businesses.