Victorian lamps were once so cheap that the Government’s own electricity supplier, the Victorian Energy Supply Company, decided to charge customers for the privilege of lighting them.
Now the price is soaring, costing taxpayers an estimated $400 million a year.
Victorian Government has been accused of ‘fraud’ for charging electricity customers for lighting their homes and businesses with LEDs Read more With the Government set to introduce a “low-carbon electricity market” in July, the state’s lampshaded properties are already struggling to survive.
The state government’s chief executive, Stephen Lachance, has said the electricity regulator’s new pricing policy is designed to bring down the price of electricity for households and businesses.
“This is an aggressive and sensible strategy that is intended to help people afford energy costs and encourage a lower-carbon energy mix,” he said.
But Mr Lachances claim is also aimed at driving more of the country’s electricity generation towards renewables.
Under the new policy, the cheapest residential and business electricity is being sold to the wholesale market, where the price will be determined by the retail electricity supplier.
That means the cheapest electricity is still going to be produced from coal and gas-fired power plants and will be delivered to the national grid through the electricity network, with no additional subsidy.
Mr Lachants claim has been challenged in court by the Victorian Chamber of Commerce and Industry, which says the policy is “unfair and deceptive”.
“The government has deliberately chosen to charge households and small businesses for the use of lamps, while encouraging coal and natural gas to be used to produce electricity, in a market where the supply of electricity is regulated by the wholesale electricity supplier,” the chamber said.
“This creates unfair and deceptive market structures that will cause electricity prices to increase.”
The chamber says the Government “has failed to provide an alternative way forward” and “has made clear that its objective is to charge for the supply and use of electricity in Victoria”.
It says the “cost of electricity will increase as the government continues to price electricity using the wholesale system, and the cost of generating electricity will continue to increase”.
Despite the increased price, the Commonwealth is also looking at ways to increase the supply.
An inquiry into the costs of the electricity market has been opened by the state and the Federal Government.
In a statement, the Department of Energy and Climate Change said it had consulted stakeholders and “the cost of producing electricity is determined by a variety of factors including demand and demand growth”.
The spokesperson said the new pricing would help meet the “growing needs” of electricity consumers and businesses, and “ensure that electricity costs are not unfairly charged for residential and small business electricity”.
But the Victorian Government says the move is “a further attack on consumers” and is “dangerous” to the state economy.
It said the “unjustified charge” of the Government was “designed to protect the interests of large power generators”.
A spokeswoman for the Victorian Electricity Supply Company said: “We believe the pricing policy will help reduce electricity costs for households, businesses and the national electricity network.”
Our current pricing strategy is based on wholesale pricing, which is not regulated by a third party.