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Don't regulate power markets: energy group

AAP logoAAP 15/08/2016

Power prices won't be brought down in South Australia by reregulating the state's electricity market, the Australian Energy Council says.

GetUp has released research that it says proves major energy retailers are ripping off South Australians, by charging them hundreds of dollars more for power than people in other states.

The report says the 'big three' retailers - AGL, Origin Energy and EnergyAustralia - are charging SA customers an annual mark-up of $650, or twice the cost of energy generation.

A lack of energy market regulation has contributed to higher prices in the state, says GetUp, who commissioned Bruce Mountain to carry out the research released on Tuesday.

"If a family moved from Adelaide to Canberra, they would save $425 every year in unnecessary retail charges, because the ACT does a good job of regulating what retailers can charge," GetUp spokeswoman Miriam Lyons said.

"Companies like AGL, Origin and Energy Australia are big enough that they should be able to undercut new entrants to the market - instead the new players are much cheaper and the big guys have been able to overcharge customers whatever they want.

"After deregulation, retail charges went from next to nothing to a huge 38 per cent slice of the average customer's bill."

The Australian Energy Council, which represents around 20 major power businesses including AGL, Origin and EnergyAustralia, said it is "seriously concerned" by the suggestion that reregulating markets will drop prices.

"The effect of competition and deregulation in electricity markets was given an unequivocal thumbs up by the most recent independent report by the Australian Energy Market Commission," the council's chief executive Matthew Warren said.

"Electricity markets are complex. You can cherry pick bits of data and draw whatever conclusion you like. The overwhelming view of our independent, expert agencies is deregulation and competition deliver the best outcome for consumers."

South Australia's energy market became fully deregulated in 2013, a move the state government said at the time would lead to lower prices for consumers.

An EnergyAustralia spokesman said the GetUp report ignored several factors that influence Australian electricity markets.

"Mr Mountain tries to compare competitive and regulated markets without acknowledging that the major retailer in the ACT has stated it was not recovering its costs," he said.

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