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The cost of inaction: the impact of wholesale gas prices on household power bills

Analysis & Policy Observatory carries a link (1.2.18) to a McKell Institute report outlining how inflated gas prices will keep driving up electricity bills, especially on Australia's east coast.

'Few issues have resonated in Australian public discourse over the past few years like energy prices. Both household and business consumers have suffered the consequences of years of policy inertia, inconsistency and a lack of forward thinking by energy policy makers that have created a scenario in which Australians are significantly paying more, to power and heat their homes.

'Wholesale gas prices play a central role in shaping household power prices, and current wholesale gas prices are significantly inflated, impacting businesses and household consumers. This report estimates the cost of policy inaction in gas to be significant.

'... Wholesale gas prices play a significant role in the retail price of electricity for households. Gas power plays an essential role in providing ‘dispatchable’ power, which often fills predicted shortfalls in electricity production during periods of high demand. Accordingly, when the gas price is high, household electricity prices tend to be higher.'


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