A MEMBER of the expert group advising the federal government on energy policy has contradicted Prime Minister Julia Gillard's assertion that the states are to blame for rising energy prices as she released data showing the impact of ''energy poverty'' in Australia.
Lynne Chester, an energy and regulatory expert at the University of Sydney, said the states operated under rules agreed by the federal and state governments for the regulation of electricity pricing. ''It's all very well for the Prime Minister to say 'you've been doing it wrong'. No they haven't. They've been doing it within the rules,'' said Dr Chester.
She said it was ''disingenuous'' of Ms Gillard to blame the states because they owned the electricity networks.
The states and Commonwealth had set the rules in the late 1990s that required the Australian Energy Regulator to ensure prices reflected the cost of supply, and recovered the cost of transmission and distribution investment.
"It's the rules that need fixing; the energy regulator needs the power to be able to scrutinise and reject over-inflated bids by companies for price rises,'' said Dr Chester, who is an independent member of the reference group that advised the government on its forthcoming white paper on energy policy.
Dr Chester said millions of Australian households were suffering as a result of the approach to pricing electricity that put the emphasis on efficient markets.
''Australia is hailed around the world for re-structuring the electricity sector and getting the market right for electricity pricing but this pricing approach is having a highly adverse impact on the living standards of 3½ million Australian households,'' she said.
A former executive with EnergyAustralia, Dr Chester said the issue was not privatisation but an approach to pricing that ignored the social impact of electricity prices.
"We need to stop the blame game and work out a national approach to deal with those suffering extreme hardship," she said, adding that current measures were inadequate and inconsistent across Australia.
In a paper to be published in the Australian Journal of Social Issues, Dr Chester says structural change that included the break-up of monopolies and consumer choice of suppliers had spawned an escalation of household electricity prices.
Figures show nearly 25 per cent of households, the poorest group, spent on average 7 per cent of disposable income on energy costs in 2009-10.