Inquiry into energy companies making ‘super profits’ from South Australians
Energy companies using the war in Ukraine to justify making “super profits” from unwitting South Australians could now face penalties from a State Government inquiry into their practices ahead of a predicted price surge.
Photo: AAP/Diego Fedele
The State Government has directed the Essential Services Commission of South Australia (ESCOSA) to conduct an inquiry into the potential reaping of “sustained” unjustified profits by retailers, generators and any other parties in the electricity and gas industries.
Minister for Energy and Mining Tom Koutstantonis today said “unscrupulous energy companies” making “super profits” would be brought into the spotlight by the inquiry established today.
The inquiry will submit a draft report by May next year and is aimed at developing protections for consumers and businesses in a turbulent market, with penalties applicable for bad corporate behaviour.
The Commission, the Minister said, will use its statutory powers to look at the potential for “concealed profiteering”. The inquiry will demand entities reveal all relevant information, and make recommendations to the State Government about possible changes to regulations that will better protect consumers.
Electricity prices are expected to jump by 56 per cent over the next two years and gas prices are also predicted to increase by 20 per cent annually, according to federal budget forecasts.
The commission will invite public submissions to the inquiry, which will consider costs, terms and conditions of supply and transport of fuels, financial and physical risk management and any other relevant factors.
Koutstantonis said global factors like the war in Ukraine have affected the costs of energy, but transparency was needed to understand the reasons behind cost rises.
“There is general recognition that Russia’s invasion of Ukraine has disrupted world energy markets and caused prices of coal and gas to spike,” Koutstantonis said.
“However, there is almost no transparency on exactly how the level and timing of those international prices have flowed through to domestic prices paid by South Australian consumers.
“To have confidence in the energy systems, consumers must know whether rises are justified and whether all possible restraints are being employed.
“We will use any and every measure at our disposal to rein in the cost of living and penalise any entity using the global turmoil to exploit consumers.”
