#Power price regulator ‘out of touch with the costs’

Power companies have accused the NSW utilities price regulator of underestimating the costs of gas and coal supplies in a controversial draft ruling on electricity bills from July 1, The Australian reported.
The warning by companies, including Origin Energy, puts pressure on the regulator to set a higher increase in prices when it releases its final decision next month.

The regulator, known as IPART, last month proposed that power bills should rise by 16 per cent, largely because of the carbon price and the cost of spending on poles and wires.

Of that 16 per cent, nine percentage points are due to the carbon price, and the regulator wants to cut the costs for electricity generation by 2 per cent.

But in a submission this week Origin has told the regulator it is basing its prices for generating electricity on an "unreasonably low" and "completely unrealistic" price of coal that does not take account of the strength of the coal export market.

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