May 24, 2013

Price rip-off by power providers deeply puzzling to experts

Mr Ben-David said the commission was surprised to find retailer margins had more than doubled in the past two years.

"When, before input costs were driving increase, in the last two years retailer costs have been driving prices. That's been an interesting shift in the market and it's hard to explain in a competitive market why there's been such a marked increase in the retailer share of prices," he said.
Not surprising if you live in Victoria and have had five years of being told that smart meters will save us money, and save private sector power providers money (they can cut their workforce, remember, and won't need to build new capacity), and all this, despite the carbon price, and despite consumers being charged for the smart meters that aren't smart - and, astonishingly, as Mr Ben-David notes - despite having long ago been privatized.  Apparently competition, by some brand of magic, ensures lower prices.

Well folks, only profitable businesses are sold off by the government.  No one should be astonished that retail energy providers are racking it in, and that their profit margins are growing year on year on year.

I'm slightly disgusted that experts needed to study this, and that it took them this long to figure out something that every Victorian worked out all on their lonesome some years ago. 

Power puzzle:  less investment but higher prices 

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