While Australian consumers are reeling from spiraling electricity bills by up to 60 per cent, power utilities are raking it in by overcharging households and businesses by up to $3 billion.

Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims attributed the overcharging to power companies cherry picking the way the government regulates their spending plans. He cited as an example unnecessary spending on poles and wires which comprise up to half of the utilities' spending the past five year.

The heaviest burden was borne by NSW consumers after electric companies in the state were allowed to inflate their costs by almost $2 billion based on the claim that they face higher interest rates, Mr Sims said in a speech he delivered Wednesday at the Energy Users' Association of Australia yearly conference in Sydney. He pointed out that homes in rural areas were paying over 10 per cent of their income on energy costs.

To address the problem, Mr Sims sought the retention of the industry overseer, the Australian Energy Regulator, as an arm of the ACCC instead of being split off which some groups have proposed.

Energy ministers from NSW, Queensland and Victoria had complained in the earlier part of October that the AER had failed by ignoring the interest of consumers. They proposed the split of the overseer from the ACCC, which Mr Sims opposed. The consumer group Choice backed Mr Sim's call for an energy regulator with stronger enforcement powers.

"The increased cost of electricity has also harmed the competitiveness of Australian businesses and indeed the entire Australian economy. Electricity prices have risen by more than they should have. While there have been legitimate drivers for some increases, prices have also increased for a number of unnecessary and inappropriate reasons," The Sydney Morning Herald quoted Mr Sims.

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