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Electricity Network Costs and The Great $400m Price Gouge

Network and distribution charges have been the single biggest factor in rising household electricity bills over the past decade. These charges cover the cost of the “poles and wires” used to transmit and distribute electricity – and you pay these charges on your energy bill.

Previously, electricity distribution charges accounted for 30-40% of your electricity bill, but what we have seen recently is that in some cases they can account for up to 60-70% of total bill charges.

Interestingly, Australia’s energy watchdog has announced they will investigate suspicions that electricity networks and gas pipelines have overcharged consumers by $400 million a year to cover their corporate tax bills.

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There are suggestions that consumers may have been charged three times more than needed to cover their tax liabilities, a scenario Energy Minister Josh Frydenberg said was ‘‘totally unacceptable’’.

The Turnbull government has asked the Australian Energy Regulator (AER) to investigate the potential price gouging.

Read more at the Sydney Morning Herald.

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