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Big electricity retailers marking up costs by $650 a year in South Australia, GetUp says

ABC News logo ABC News 15/08/2016

GetUp has taken aim at retailers AGL, Origin Energy and Energy Australia.© ABC News GetUp has taken aim at retailers AGL, Origin Energy and Energy Australia. Activist group GetUp has accused electricity retailers of adding big margins and mark-ups to South Australian power bills.

It commissioned research that compared thousands of power plans available in South Australia, New South Wales, Victoria and Queensland, to the wholesale cost of electricity.

GetUp said AGL, Origin Energy and Energy Australia were charging South Australians a mark up of $650 each year, about twice what customers were paying for the actual generation of the electricity.

It also found that retail charges had risen from virtually nothing to 38 per cent of the average SA bill following the deregulation of retail prices in 2013.

Researcher Bruce Mountain said despite the mark-ups, very little capital was required to provide the retail service, especially when compared to electricity and production costs.

He said SA customers were facing an average $400 a year more than customers in Canberra.

"Essentially the ball lies in the Government's court, to start to get serious in its analysis of the industry," Mr Mountain said. "[It should] consider how markets can be made to work, and if not to intervene where you know where it's going to be useful."

He pointed out that an increase in retail charges caused a public outcry in Great Britain despite those charges being just a fraction of what large retailers were charging in SA.

Retailers blame rising wholesale costs

AGL, Origin Energy and Energy Australia all increased their power prices on July 1, citing issues around coal and gas supply in South Australia and rising costs of purchasing power from wholesalers.

As a result, the average Energy Australia bill will increase by $260 this year, by $230 for AGL customers and by $117 for Origin Energy.

SA Premier Jay Weatherill put part of the blame for SA having the highest electricity costs in the nation on the privatisation of the Electricity Trust of South Australia by the Liberal Government in 1999.

Treasurer Tom Koutsantonis later called on the Essential Services Commission of SA to assess the rises and whether they could be justified.

But GetUp Environmental Justice Campaign director Miriam Lyons said "The Big Three" retailers were exploiting their power in the market and families were getting "ripped off".

"This has huge impacts for people struggling to pay unaffordable energy bills," she said.

"Further lining the pockets of energy executives comes at the expense of Australian families." "Customers can seek out the cheapest offer. This is a difficult thing to do because for customers it's hard for them to know what they're paying now, but if they go to the effort they can usually obtain a cheaper deal."

GetUp said "The Big Three" retailers supply electricity to about 80 per cent of South Australia.

Statistics from the Australian Energy Regulator showed South Australia already had the highest proportion of electricity disconnections in the nation before the July price rises.

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