A peak agricultural organisation has slammed electricity network profits, claiming they are pulling in billions of dollars more than necessary.
The Australian Industries Energy Taskforce, a group of peak agricultural organisations, has released the results of an independent report into the national energy system.
The report, by the Sapere Research Group, showed profits made by electricity networks were more than $2.6 billion higher than they should be according to the Australian Energy Regulator’s (AER) rate-of-return guidelines.
Queensland Farmers Federation president Stuart Armitage said energy prices had placed enormous strain on business viability for farmers and the current situation was unsustainable.
Mr Armitage said rate-of-return methodology added perhaps 3-5 per cent to the typical retail bill.
“For an irrigator currently paying $30,000 per annum for electricity, the excess network component in retail prices would mean they will have to unjustifiably pay another $1500 per year,” he said.
“The rate of return the AER allows the networks to earn should be economically efficient and based on real-world data from Australia and other comparable countries.
“It should not be based on a theoretical model that overstates the risk and the cost of finance.”
