High power bills are here to stay, a new report says.
Household bills jumped 20 per cent last year while the wholesale cost of electricity leapt 130 per cent between 2015 and 2017, a report by Grattan Institute says.
It's likely wholesale prices will remain above historic levels because of transition in the electricity market, the report's author Tony Wood believes.
The Turnbull government is spruiking its National Energy Guarantee as a way to ensure market reliability and bring down prices.
But the report claims it's impossible for governments to fix the problem because price rises have been caused by issues outside their control.
"Politicians should tell Australians the harsh truth: high wholesale electricity prices are the new normal," Mr Wood said.
Major electricity generators gaming the system are partly to blame.
"It's been significant and it could get worse," he told ABC radio of the practice which involves generators creating artificial scarcity of supply to force up prices.
The institute says it has occurred in Queensland and South Australia, there's signs of it in Victoria and NSW could be next.
Mr Wood estimated it may have added $800 million to the price paid for electricity traded through the national electricity market.
Closing coal-fired power stations is also part of the problem, but he believes it's "simply a reality of life" that whatever new technology replaces them, whether renewables, gas or new coal plants, will be more expensive.
It found high prices for gas and black coal also contribute to bigger bills.
© AAP 2018
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