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AGL SA customers to be hit with 18pc price hike, State Government says

AGL SA customers to be hit with 18pc price hike, State Government says

By Tom Fedorowytsch and Matt Coleman on 9 June 2017

Power prices are set to rise by 18 per cent for AGL customers in South Australia, according to the State Government, with similar increases expected in New South Wales and the ACT.

SA Energy Minister Tom Koutsantonis has described the price rise, which applies from July 1 to customers on default standing contracts, as unsustainable.

AGL said the average price increase for residential electricity customers in SA would be $6.70 per week, or $350 a year.

Welfare organisation, the South Australian Council of Social Service (SACOSS), said it was enormously disappointing news for all South Australians, but especially those on the lowest incomes including pensioners.

SACOSS official Ross Womersley said it was a "huge kick in the guts for lots of South Australians".

"I think there will be a lot of people that are going to be shocked that the price increase is to be so substantial," he said.

Gas price and availability blamed

AGL said wholesale market prices had risen "significantly" for reasons including high gas prices and limited gas availability on the east coast, the closure of ageing coal-fired generators, and "an uncertain policy environment".

The increase comes just days after the power giant revealed it would build a $295-million fast-start station on Torrens Island, in Adelaide's north-western suburbs.

The plant will replace part of the ageing Torrens Island A power station in early 2019.

On Wednesday, the company warned again that the 50-year-old station was in danger of "crapping out" and needed to be replaced.

AGL's managing director Andy Vesey said the new station would help "create a secure energy system" in South Australia.

But he also said that while the new plant would put downward pressure on prices in the long term, costs for households would likely rise in the short term.

Mr Vesey said forward-[pricing] curves across the NEM [National Electricity Market] had gone up significantly.

AGL and the South Australian Government have previously clashed over the company's pricing to its customers.

In April, Mr Koutsantonis accused it of charging "extraordinary prices".

He said if competitors and new investors came into the market - and AGL did not get the same "super profits" as before, that was "a good thing for South Australians".

"We don't want more consolidation of AGL's market power, we want less," he said at the time.

The Government itself is spending more than $500 million to build a new gas-fired power plant and Australia's largest battery, to further secure the state's energy supplies.

However, it insisted the unit would not compete with anything AGL did and would only be switched on if the Australian Energy Market Operator ordered load shedding (blackouts).

ABC News

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