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The analysis shows that electricity prices were far below the actual cost of supply for many decades, and that current charges to consumers overall are almost in line with the historical cost of supply. 

The report also shows that steep rises in household electricity prices since 1985 appear to have been largely driven by the removal of cross-subsidies and more recently by higher costs to generate and supply electricity.  Although average costs reduced slightly in the 1990s, they increased quite sharply from the early 2000s as a result of increasing fuel costs, the increase to GST in 2010 and more recently increases in transmission and distribution charges.

The analysis suggests that setting current electricity charges on the basis of historical cost could increase prices for consumers, rather than reduce them.

Analysis of historical electricity industry costs

Last updated: 12 October 2020

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