Consumer advocates cheer COAG power price plan

Consumer advocates have welcomed news the nation's leaders will not force households to buy energy smart meters.

Premiers and chief ministers met in Canberra yesterday and agreed to a package of electricity market measures Prime Minister Julia Gillard says will save households $250 per year from 2014.

Ms Gillard says it will address the so-called gold-plating of electricity networks and give the energy regulator more money.

Going into yesterday's Council of Australian Government's (COAG) meeting several states were sceptical about the prospect of a national rollout of smart meters.

The devices are designed to help consumers monitor their power use and switch off at peak times.

Chief executive of consumer group Choice, Alan Kirkland, says he is pleased the meeting did not agree to make them compulsory.

"It's not been good for all consumers, so in rolling out these technologies we need to make sure there's a strong consumer protection framework," he said.

"We need to learn the lessons from Victoria where there's a mixed experience of smart meters." However he says it will take time for the initiatives to bring energy prices down.

"This package of reforms won't see electricity bills go down immediately but what it will do is stop us seeing the same rate of electricity price rises that we've seen over the last five years," he said.

Mr Kirkland said he is also pleased the package also includes more avenues for consumer advocacy on energy policy and regulation.

The Australian Energy Regulator has been given an extra $23 million in funding.

The regulator's chair, Andrew Reeves, says he is confident the reforms will save households money.

"The additional funding was to give us the resources necessary to give full effect to the changes in the rules that have also just been made," Mr Reeves said.

"We would use the additional funding for resources in-house to put us in a better position to challenge the proposals from the businesses.

"In addition to that, we'll use it for maintenance of better data sets so that we can get a better fix on benchmarking and comparison of efficiencies across the businesses, and thirdly and importantly, it'll also allow us to have a better engagement with consumers." "There've been a lot of demands on us in the past, but now we do have expanded responsibility and expanded capacity to challenge the proposals from the businesses." 'Political response' Not everyone is sure the changes will save households $250 per year.

Online energy comparison company GoSwitch's chief executive, Benjamin Freund, says the reforms are a political response to anguish within the community.

"Politicians feel a need to respond," he said.

"I'm not confident the response that we saw is going to have a real impact on people's power bills.

In fact, I anticipate that power bills will continue to increase for the foreseeable future." Kieran Donoghue, the general manager of policy at the Energy Supply Association, says the Government must follow through with its plans.

"The key is to actually follow through with it and to consult fully on any changes with industry and other stakeholders to make sure that the changes make sense for the energy market and for consumers," he said.

"It's a little bit dangerous to sort of make promises about whether bills will go down or not over a particular time frame, and I'm sure the Prime Minister understands that, but what we're talking about is making sure that bills are at an efficient level and they're no higher than they need to be."

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