This is what privatisation did to Australia's household electricity bills

When three eastern and one southern state formed the National Electricity Market in December 1998 Australia had the lowest retail prices in the world along with the United States and Canada.

The rules which underpin this National Electricity Market are created by the Australian Energy Market Commission (AEMC) set up by the Council of Australian Governments (COAG) - through the COAG Energy Council - for that purpose and to advise federal & state governments on how best to develop energy markets over time.

The Australian Energy Regulator (AER) sets the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy.

So far so good. There's a defined market and there are rules.

Then the privatisation of electricity supply and infrastructure began in earnest.

It should come as no surprise that this push towards full privatisation, with its downhill spiral in service delivery and uphill climb in cost to retail customers, began and was progressed during the term of Liberal Prime Minister John Howard.

By 2017 the NSW Berejiklian Coalition Government has almost completed its three-stage privatisation of state power infrastructure by selling off poles and wires and, it goes without saying that the retail cost of electricity is expected to rise again next year.

This is where we stand today……………………

[Graphs in Financial Review, 4 August 2017]

The Financial Review, 4 Augut 2017:

The annual cost to households of accepting a standing offer from one of the big three retailers instead of the best offer in the market has been estimated at $830 in Victoria, $900 in Queensland and $1400-$1500 in NSW and SA by the St Vincent de Paul Society.

Mr Mountain said power bills are constructed in such a complex way that ordinary customers without sophisticated spreadsheet and analytical skills have little hope of analysing competing offers to work out which offers them the best deal.

Private comparison websites do not include all market offers and charge retailers for switching customers, while the websites offered by the Australian Energy Regulator and the Victorian government do not provide the tools customers need to discriminate among offers.

Prime Minister Malcolm Turnbull has ordered the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry into electricity supply, costs and pricing, including retail pricing.

The Treasurer should have a preliminary report from the ACCC in his hands by the end of September this year, however this body does not submit a final report until 30 June 2018 with no guarantee that any recommendations will be adopted by government and industry.

Quite frankly, it appears the privatisation train left the platform some time ago and there is no way to halt or divert it in order to genuinely benefit household consumers.

South Australian motorists are wondering why their NSW cousins have a workable Fuel Check and they do not

One of North Coast Voices South Australian readers alerted us to this.

CHRISTMAS 2015…..

ABC News, 24 December 2015:

Motorists will soon have access to the same petrol price information as retailers, under a deal brokered by the competition watchdog.

The Australian Competition and Consumer Commission (ACCC) has reached agreement with petrol price information service Informed Sources and four major petrol retailers to make almost real-time data available to motorists.

Currently, the retailers have exclusive access to information about petrol price moves within 15-30 minutes of when they occur through Informed Sources.

Under the deal, Informed Sources will make the same information available to consumers for free and to third parties on commercial terms.

The ACCC's chairman Rod Sims told ABC News that this will facilitate improved competition amongst petrol retailers.

"Consumers will have the information to shop and get the best deal, that will improve competition on the ground," he argued.

"Secondly, ourselves and motoring organisations and others will be able to see exactly what's going on, who's leading prices up, who's leading prices down."

See: Australian Competition & Consumer Commission (ACCC), Petrol price information sharing proceedings resolved

IN SOUTH AUSTRALIA JUST ON 9 MONTHS LATER……

RAA, media release, 17 September 2016:

Site specific fuel prices will no longer be available via RAA’s website due to a deal struck by the ACCC, and it could cost motorists up to $24 a tank when filling up. 

RAA Senior Manager Mobility & Automotive Policy Mark Borlace said the agreement comes into effect from today. 

“At the moment we receive site specific fuel prices for Adelaide twice a day, and we share that information with motorists via our website,” said Mr Borlace. 

“We also use the data to monitor price trends day-to-day, which allows us to notify motorists when a price spike is imminent, just as we did this week when prices spiked +27cpl. 

“As of today, we are only able to provide a daily average price for fuel in Adelaide, which is significantly inferior to what motorists have benefited from via our website for more than a decade.” 

Using RAA’s website, on occasion Adelaide petrol motorists could spot as much as a 40cpl variation in prices between the best and worst sites. 

“Using this information, Adelaide motorists would have saved anywhere between $12 and $24 per 60L tank over the past year,” said Mr Borlace. 

“If motorists are left to rely on street price boards, they won’t be able to see the ‘bigger picture’ to decide which route to take on any given day to get the best deal on fuel.” 

RAA is disappointed that motorists will not be able to get reliable site-specific fuel price information online as a consequence of the ACCC’s deal with the fuel industry, and has called on the State Government to take action. 

“Earlier this year, New South Wales introduced legislation that compels every fuel retailer to report their fuel prices in real-time to a government agency who provides this to the public free of charge without any restrictions,” said Mr Borlace. 

“Not only would an initiative like this allow motorists to find the cheapest prices, it also means we could continue to scrutinise the fuel industry and enhance competition amongst retailers who have to compete with a good price to attract customers.” 

RAA will continue to investigate all avenues to cater for motorists’ needs when it comes to purchasing fuel. 

“Limited pricing information is available via a number of smartphone apps but these offerings do not reliably tell motorists where to find the cheapest fuel,” said Mr Borlace. 

“We’re also concerned that by only providing fuel prices in one format, it disadvantages over half of our members who don’t use smartphone apps. These people are generally the most sensitive to fuel price movements and would benefit most from knowing where to find the cheapest prices. 

“In reality, most motorists will be left in the dark when it comes to fuel prices due to the ACCC’s agreement with the fuel industry.” 

SA Fuel price information is available at raa.com.au/fuel

South Australia’s Deputy Premier John Rau has allegedly told the RAA that it would be too expensive to change the law to make releasing the petrol price information legal.

NSW households with feed-in tariffs on their rooftop solar power can expect no help with bill shock from the Baird or Turnbull governments

State of Play for NSW domestic solar power…….

REneweconomy, 1 September 2015:

The New South Wales pricing regulator has slashed the value of solar feed-in tariffs in the state in what appears to be a deliberate move to push consumers to adopt battery storage, and to lock in long-term deals with major retailers.

The Independent Pricing and Regulatory Tribunal (IPART) on Monday announced in a draft determination that the recommended average tariff – which is voluntary anyway for electricity retailers  in NSW – had been cut by 14 per cent to an average 4.8c/kWh, the lowest in Australia.

The move will affect the more than 3,000 homes that add rooftop solar in NSW each month, and gives some indication of the tariffs awaiting the 160,000 homes on premium feed-in tariffs when those tariffs come to an end at the end of 2016.

IPART justified the cut – from an average 5.6c/kWh in the past year – on the basis that wholesale electricity prices had fallen because of a decline in expensive peak pricing events.

One of the principal reasons for this fall in wholesale prices is the proliferation of rooftop solar PV. IPART says solar PV has helped reduce the number of daytime peak pricing events in NSW and helped lower the average level of peak demand by 8 per cent….

But while solar households are having their tariffs cut because of falling wholesale prices, there is no sign that lower wholesale prices have been passed on to the general consumer. Retailers simply increase their margins on the “retail” component of the business to offset the lower revenue they get from their coal plant and other generators. All major retailers have increased their margins significantly in the past year.

ABC News, 19 July 2016:

Thousands of Australians will be hit by electricity bill shock of about $1,500 when generous solar feed-in tariffs are rolled back in coming months, consumer advocates have warned.

The tariffs were introduced for a set period to kickstart Australia's uptake of rooftop solar by offering money to solar users who fed energy back into the grid.

More than 275,000 households will be affected when the tariffs are unwound from September to January in New South Wales, South Australia and Victoria.

A new report that crunches the numbers on the financial impact shows 146,000 NSW customers will be the hardest hit…..

In NSW, the tariff will be wound back from 60 cents for all solar generation to 5.5-7.2 cents per kilowatt hour.

In Victoria, consumers who were paid 25 cents per kilowatt hour for excess solar fed into the grid will have that reduced to five cents and in South Australia the 16 cent tariff will fall to 6.8 cents.

The current NSW 60 cents tariff for all solar generation - 20 cents feed-in tariff (FiT) - gives a discount of est. 7 per cent on domestic electricity costs.

Current solar FiTs are ending for 275,902 households in New South Wales, South Australia and Victoria.

The change occurs for households with FiT contracts which commenced in :

2011 (standard tariff) South Australia the change occurs on 30 September 2016 – new minimum tariff 6.8 cents per kWh;

2010 (“Solar Scheme Tariff”) New South Wales the change occurs on 31 December 2016 – up to retailer to decide the offer which is unlikely to exceed 5 cents kWh ; and

2011 (transitional tariff) & 2012 (standard tariff) Victoria the change occurs on 31 December 2016  - new tariff 5 cents per kWh. “Premium FiT” contracts do not expire until 2024.

According to the Independent Pricing And Regulatory Tribunal an average two-person household in NSW uses approximately 1,400 kWh of electricity per quarter (90 days) or 15.55kWh per day.

If a North Coast residence is lucky enough to receive a full 6 hours of sunlight daily on its rooftop solar panel and has installed a 3.0kw or 4.0 kw model it could produce between 11.7 to 16.8kWh of electricity per day.

Even the most basic maths indicates that from 1 January 2017 for many of these coastal households the dollar margin between output and consumption will fall and at the end of each billing period there will be less income to compensate for their actual energy use plus the usual energy retailer’s service fees and charges.

As both the Baird and Turnbull governments appear to be captives of the coal and gas industries, 2017 is going to be a year of unexpected adjustment for many of those older residents in the Northern Rivers who fondly imagined that they were future proofing their retirement by entering solar feed-in tariff schemes in 2010.

The Total Environment Centre explains Life after FiTs.

As Night Follows Day: increased unconventional gas mining led to higher domestic gas prices

MacroBusiness acting shocked on 18 July 2016 that the Australian Petroleum Production and Exploration Association (APPEA) and gas industry, with the connivance of government, delivered the unfair domestic gas pricing scheme that the anti-coal seam gas movement repeatedly stated that it would:

Another shocker of a week for gas users with MB’s east coast average price still at an astonishing $10.86Gj for spot markets while in Japan the same Australian gas can be purchased for $5.75Gj:

…….

To sum up:

$80 billion dollars has been burned on three LNG plants in QLD that make no money;

but, they are a part of an east coast gas cartel that can charge whatever they like at home given their exports have generated a shortage;

that is, locals are subsidising the export losses of Banana Republican gas titans who mis-allocated this much capital piled upon pallets:

and, to boot, we’ve given ourselves epic Dutch disease because our manufacturing is driven out of business owing to cheap gas in Japan (and everywhere else but here).

This rates as one of the most singularly stupid and rapacious examples of the “resources curse” anywhere in the Third World which, frankly, is where our policy-makers seem to have learned their craft…..

A not so small gas industry issue that APPEA won't be running to the media about

The Australian Petroleum Production and Exploration Association is a very vocal lobbyist on behalf of the gas industry. It frequently seeks to demonise individuals who oppose the growth in unconventional gasfields.

APPEA states; Concern about security of gas supplies in NSW is justified. However, household gas supplies are likely to be unaffected. Most of the impact in terms of physical supply and pricing will be felt by large energy-intensive businesses and Australia’s resources industry is calling on The Greens and the Lock the Gate Alliance to denounce civil disobedience action at work sites across the country before someone is seriously injured. The APPEA and MCA recognise there is legitimate interest among landholders and communities on how resources are produced. Those issues are best addressed through open and transparent dialogue based on facts rather than through fear and threatening behaviour. In recent weeks we’ve witnessed protesters chain themselves to vehicles, dangle from machinery dressed as bats, lie in the path of vehicles and intimidate landholders who are happy to have exploration take place on their properties.

The reality is that wholesale and retail as prices are not increasing due to gas shortages at national, state or even regional level. 

Neither is the fact that domestic LNG gas prices are linked to an international benchmark and, the more expensive wholesale unconventional domestic gas price will be be linked to export market prices, the only reasons business and residential bills will rise.

Unlawful cartel behaviour is also an issue driving up retail gas prices.

On 3 January 2014 the Eastern Australia Domestic Gas Market Study (BREE report) was released which highlighted the difficulties inherent in a pricing model that is opaque because the terms, conditions and pricing agreements of bilateral contracts are confidential. This lack of transparency hampers price discovery when there is a change in the market, as information is not available outside contracting parties, particularly in a timeframe that is relevant to pricing in a dynamic market. 

Crikey observed on 28 February 2014:

The Australian Petroleum Production and Exploration Association (APPEA), the gas industry’s peak body, breezily welcomed the BREE report, particularly the emphasis on removing regulatory impediments to new supply and the rejection of calls for national reservation, and saying it confirmed the “market is indeed working”. APPEA ignored the governance and competition issues raised by BREE, but pointed to nine publicly announced (but confidential) wholesale gas contracts to argue there was already “abundant information” in the market, and it focused instead on the need to quickly bring on new supply. APPEA chief executive David Byeer followed up with an op-ed in The Australian Financial Review.

To date APPEA remains silent on this judgment involving SPEED-E-GAS (NSW) owned by Origin Energy LPG Limited a subsidiary of Origin Energy Limited .......

Excerpts from the 24 October 2014 judgment in AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v RENEGADE GAS PTY LTD (TRADING AS SUPAGAS NSW) (ACN 074 008 496), SPEED-E-GAS (NSW) PTY LTD (ACN 064 624 915), PAUL BERMAN, COREY JOHN SMITH and JAY RUSSELL WILSON:

* (c) Amount of loss or damage caused

123.  It is not possible to quantify the number of customers denied the opportunity of a price reduction for Forklift Gas in Sydney due to the existence and implementation of the Understanding, or the period of time for which those customers were denied that opportunity.

124.   However, having regard to the facts and matters set out at Section B(1) above (Forklift Gas), [13]-[16] and [18] above and that the number of potential customers that could be affected grew over the Relevant Period, the inference to be drawn is that the existence and implementation of the Understanding resulted in a very large number of customers being denied a competitive offer that otherwise would have been made. The extent of the loss or damage is able to be assessed to a limited extent by the fact that, as Renegade described the position, when a discounted price was offered by one of the two companies to a customer of the other, the customer who was the subject of such competition typically obtained a discount in the order of $7 or 20% (the average effect of such instances of competition - again, relative to original price): see [15] above.

125.  Further, it is important to note that, as described at [16] above, Renegade regularly increased its prices for all, or almost all of its LPG customers in line with increases in an index known as the Saudi Gate Price. Those increases occurred as frequently as monthly when the Saudi Gate Price was rising, but only on one occasion when the Saudi Gate Price was not rising. The Saudi Gate Price fluctuated both up and down from time to time. Except for high volume customers, Renegade did not generally reduce its prices when the Saudi Gate Price reduced. As a result, over time the margin earned by Renegade from each customer would usually increase.

* 1. Corporations

1. The penalties to be imposed on Renegade ($4.8 million over 52 months) and Speed-E-Gas ($3.1 million payable within 30 days) are appropriate. They are equally culpable and responsible.

312.  The difference between the two penalties reflects, among other things, a difference in the discount for Renegade’s belated “plea” before trial and for Speed-E-Gas’ early and substantial cooperation with the ACCC investigation and early “plea”.

* (c) Conclusion

1. The declarations at paragraphs 8 and 9 of Annexure A have utility. In the absence of them, the contravening conduct would not otherwise be clearly identified. There is also public interest to be served in making the declarations. They will serve as a warning to others who may contemplate making or giving effect to contracts, arrangements or understandings between competitors by which they allocate customers between them. Given the seriousness of the conduct and the period over which it occurred, this is a case where the circumstances call for the marking of the Court’s disapproval of the contravening conduct. Speed-E-Gas’ conduct contravened the Act through a deliberate, largely covert, long standing cartel arrangement, which had the potential to adversely affect a high proportion of manufacturing and distribution businesses across Sydney and which likely had an adverse effect on those businesses that were denied the opportunity of receiving a price competitive offer from Speed-E-Gas during the Relevant Period and from 24 July 2009 to July 2011.

* I. PARITY AND TOTALITY OF PENALTIES

310.  The parity of penalties to be imposed upon the respondents must be considered.

1. Corporations

311.  The penalties to be imposed on Renegade ($4.8 million over 52 months) and Speed-E-Gas ($3.1 million payable within 30 days) are appropriate. They are equally culpable and responsible.

312. The difference between the two penalties reflects, among other things, a difference in the discount for Renegade’s belated “plea” before trial and for Speed-E-Gas’ early and substantial cooperation with the ACCC investigation and early “plea”.

2. Natural persons

313.  As noted above, in assessing parity for the natural person respondents it is appropriate to consider both disqualification orders and pecuniary penalties: Kerkhoffs at [17]-[21].

314.  Mr Berman is to pay a pecuniary penalty of $250,000 and be disqualified for 3 years. Mr Smith is to pay a pecuniary penalty of $100,000. Mr Wilson is to pay a pecuniary penalty of $50,000. There is parity in the orders proposed against Mr Berman and the pecuniary penalties proposed to be imposed on Mr Smith and Mr Wilson having regard to Mr Berman’s greater culpability and, on the other side, Mr Smith’s and Mr Wilson’s cooperation with the ACCC.

315. The ACCC submitted (and I accept) that the culpability of both Mr Wilson and Mr Smith is significantly less than that of Mr Berman. Each was subject to the direction of his manager, and for the majority of the Relevant Period, the active collusion underpinning of the Understanding occurred directly between Mr Berman and Mr Hobby with Mr Smith and Mr Wilson responsible for implementing their instructions consequent upon that collusion. In relation to Mr Smith and Mr Wilson, during the Relevant Period, each was broadly equally culpable and responsible for the contravening conduct.

316. Mr Smith is to pay a pecuniary penalty of $100,000 while Mr Wilson is to pay $50,000. Mr Wilson is entitled to a substantial discount because of his cooperation with the ACCC. Mr Smith is entitled to a lesser discount because his cooperation came later. Further, Mr Smith enjoys a much higher income than Mr Wilson and otherwise has a significantly greater capacity to pay. While a penalty of more than $50,000 imposed upon Mr Wilson would be likely to exceed any amount required for specific deterrence, a penalty of that amount imposed upon Mr Smith would be inadequate for that purpose.

317. For those reasons, I accept that there is appropriate parity between the penalties proposed to be imposed upon each of the respondents. [my red bolding]

NSW farmer challenged $2 billion overspend on poles & wires across the state and Grid Australia threatened to sue

 

The Farmer

 

Introduction

• The electricity industry is in crisis as massive over investment in the grid

has caused unsustainable price rises.

• This presentation will delineate 8 key themes that have shaped the

current crisis in the industry.

1. Price – an international and domestic perspective

2. The industries fanciful forecasts that have lead to massive overbuilding of

infrastructure for a demand that simply does not exist.

3. Gold Plating of the network.

4. A local example of flawed project justification. On a local level the problem

of self serving forecasting is magnified.

5. The industries fatally flawed regulatory framework.

6. Demand Management – a wasted opportunity.

7. The Myth of Peak Demand.

8. The Negative Feedback loop of falling demand.

Finally we will suggest some solutions to ameliorate the crisis.

[Excerpt from Submission to the Senate Enquiry on Electricity Prices, The Electricity Crisis How fanciful forecasts are stifling the Australian Economy. Author: Bruce Robertson – Deputy Chairman, The Manning Alliance]

 

Grid Australia states that External Impacts have been one of the key causes of Electricity price rises. They state:

“External impacts – the higher cost of borrowing after the GFC and the impact of high commodity prices has placed additional financial burdens on the cost of repairing and replacing essential network infrastructure; “

The government owned utilities effectively borrow at the government rate and make massive margins on the regulated return. Mr McIntyre, Chairman of Grid Australia should know this as he is also Managing Director of Transgrid the NSW Government owned Transmission provider. [Excerpt from Submission to the Senate Enquiry on Electricity Prices, Corrections to the Factual inaccuracies and Misleading and Deceptive Submission given by Grid Australia. Author: Bruce Robertson – Deputy Chairman, The Manning Alliance]

 

ABC 702 Radio James Valentine interview with Bruce Robertson:

Too much in investment in poles and wires.

Since 2008-2009 peak demand has actually been falling.

Average bill in a Country Energy NSW regional supply area has risen 154 per cent since 2005.

Government regulation of the industry is dramatically failing.

bruce-robertson-interview.mp3

 

Manning Alliance

 

1.    A STATEMENT FROM THE CHAIRMAN 15 November 2012

Dear Friends,

As you are aware Grid Australia, “the organisation which represents the owners of Australia’s $10 billion electricity transmission networks in the National Electricity Market (NEM), plus Western Australia” recently threatened to instigate litigation against Bruce Robertson for defamation, that is, comments that he made on the ...

ABC 702 program with James Valentine and for references that were made in the Manning Alliance’s submission to the Australian Senate Inquiry into Electricity Prices.

I have previously sent you copies of press clipping and all links.

Today, I am very pleased to announce that the Chairman of Grid Australia, Peter McIntyre (also the Managing Director of Transgrid), has sent an apology to Bruce Robertson wherein he has stated that there will be no legal action against Bruce.

This is wonderful news and a great relief to Bruce and the entire Robertson family and also the entire Manning Alliance Community; and it is a major win for People Power and the Freedom of Speech.

I want to advise you that, tomorrow; I shall, in my capacity as Chairman of the Manning Alliance, call on the NSW Government for an independent inquiry into this debacle. The deliberate bullying, harassment and intimidation of Bruce Robertson is unacceptable and Grid Australia and Mr McIntyre needs to be held to account. We cannot allow innocent civilians who wish to contribute to matters of national or public significance to be gagged and coerced. We live in a world dominated and controlled by mega corporations and multinational companies and this horrific persecution of Bruce Robertson is a clear example that we need to be vigilant and jealously guard our right to the freedom of speech.

I want to thank you all for your contribution, advice and support. All those letters and emails to the politicians and the media have definitely helped.

As I sit back in my comfortable chair, sip on my favourite beverage, and reflect; today has been a very good day! It was a day when might was proven not to be right, and a clear example has been set for us all that we should not be afraid to speak out, to stand up for our rights and not to tolerate nor accept mediocrity. Our lives are too short. The Manning Community has lost an entire year of our lives battling the Transgrid debacle. It is a year we will not recover!

We need to demand and expect high standards of performance from our corporations, from our governments and from all our politicians.

I have attached a copy of the story (below), which appeared online in the Sydney Morning Herald, this afternoon. It has some very interesting information. I have also attached a copy of the letter of apology from Mr McIntyre. I am reliably informed there should be a major article in the Sydney Morning Herald tomorrow morning.

Perhaps at a more convenient time we will be in a position to share with you the background to this entire fiasco, the power plays and the intrigue, but that’s a story for another day!

I want to particularly acknowledge yet again, the support from the Sydney Morning Herald, particularly from Michael West, our Federal Member, Robert Oakeshott, and the NSW MLC, Dr. John Kaye.

I also need to recognise the courage and conviction of Bruce Robertson and the steadfast support and advice that he has received from his wife Belinda and their three children Babbs, Celeste, Archie. They are truly a remarkable family.

Please celebrate this win. It is another win for our entire community! A win that will have national repercussions; that will reverberate throughout the boardrooms of Australia and through the corridors of political power.

The truth really has won out!

Kind Regards,

Peter Epov

[http://www.facebook.com/HighVoltageLinesManningAlliance]

 

The State per email from Grid Australia

 

Dear Mr Robertson,

 

I refer to the letter sent to you by Ashurst on 5 November 2012. I sincerely apologise if this correspondence caused you or your family concern in regard to pending legal action. I have instructed Ashurst that Grid Australia has no intention of taking legal action against you in regard to the matters referred to in that letter. As such, you should not consider yourself subject to any proceedings. Grid Australia is committed to constructive engagement with Government and the community about matters of energy policy. We stand by the information and the submissions made to the Senate Select Committee. In light of our obvious differences, I would appreciate the opportunity for Grid Australia to meet with you and discuss the matters raised in your submission to the Senate Enquiry. I recognise there has been a lot of passion in the debate, but I am hopeful that a more constructive engagement between us will assist in a more informed dialogue on these important issues.

Yours sincerely,

Peter McIntyre
Chairman
Grid Australia

[ http://www.smh.com.au/business/apology-letter-sent-to-bruce-robertson-20121115-29eeg.html#ixzz2CKBgpMWP]

Energy White Paper 2012: Supporting vulnerable customers?

 

Not worth the paper it is printed on:

 

Supporting vulnerable customers

The government recognises that rising energy costs and the unwinding of cross-subsidies have uneven distributional impacts on households, and that lower-income households face proportionally greater impacts than high-income households (see Chapter 3: Future energy trends and challenges). Therefore, retail price deregulation and greater consumer empowerment must be accompanied by appropriate protections for vulnerable customers, such as effective hardship policies, strong marketing rules, select standard terms and conditions for energy contracts, and close monitoring of market outcomes.

Ensuring that consumers, particularly those who are most vulnerable, are able to manage energy costs effectively is also increasingly important. The continued provision of adequate assistance to vulnerable consumers through a sound general safety net, well-targeted jurisdictional concession regimes and appropriate community service obligations remains critical.

Such assistance should be transparent and not undermine competitive pricing structures, which reflect, as efficiently as possible, the underlying costs of supply. It is more efficient for assistance to be provided through properly targeted social policy settings, rather than energy policy settings, to ensure that energy market signals are preserved.

 

Full Commonwealth Energy White Paper 2012 here.

I didn't switch off the porch light and it's all Julia's fault!

 

THE FACTS

 

On 1 July 2012 NSW electricity prices rose yet again.

 

The NSW Independent Pricing and Regulation Tribunal set this price rise and produced this table outlining the cumulative causes of these increases:

 

SILLY RESPONSE

 

Samantha Lubke-Wood It's not the electricity company's fault, it's the governments fault for selling the company's off and privatising the section. Now it's owned by an overseas company so now they can charge as much as they like. Don't blame essential energy they just get paid to maintain the lines. Blame The PM.

Thursday at 12:29pm via mobile  (Someone obviously forgot that it was a state government sell-off of power assets, that the NSW Government still owns “the lines” aka network and actively lobbies for increases to its own charges, that Essential Energy costs do end up on residential bills and, that electricity pricing is a lot more complicated than 'It’s all Julia's fault!')

 

SENSIBLE RESPONSE

 

Julie-Anne Wiles Our bill came down $250. All we did was turn off the second fridge and not use the dishwasher. I was actually happy with our bill.

Friday at 11:42am via mobile (A mother of two who took the necessary action to avoid household budget stress)

 

FOR THE UNDECIDED SOME COMPARATIVE WINDOW SHOPPING

 

www.myenergyoffers.nsw.gov.au

 

http://www.myenergyoffers.nsw.gov.au/search-offers.aspx

Tony Abbott, the author, the power bill and parliament

Image from ABC News online

Synergy (West Australia) is a state government-owned corporation which raised its residential and business electricity prices on 1 July 2012.

It states that the average customer uses 15.89 units of electricity per day or 969.22 units over 61 days. This should result in a carbon price charge in the vicinity of $22 (based on the state corporation's own calculations) for a billing period of this length.

In the case of an electricity account for June-July 2012, this average household should only attract a carbon price charge of around $11 dollars, because this charge was not introduced until halfway through the billing period.

Leader of the Opposition, Tony Abbott, claimed in the Federal Parliament this week that the electricity account for June-July 2012 (pictured above) represented an $800 increase in electricity costs to an 82 year-old author/ pensioner since the previous billing period and that 70 per cent of this rise is due to the carbon tax.

This particular household appears to have almost doubled its electricity consumption since that previous billing period and used 112 units of electricity daily or 6,832 units over 61 days, resulting in a bill for $1,563.70 in total (GST and carbon price inclusive).

It is worth noting that at an average of 112 units per day this customer uses seven times more electricity than the average Synergy customer and, the carbon price charge included in this bill would be in the vicinity of $77 - again based on the state corporation's own calculations for this level of electricity consumption.

In fact most of the actual $827.45 increase represents increased tariff and supply charges imposed by the WA Coalition Government coupled with the cost of markedly increased consumption.

If Tony Abbott was seriously concerned about this woman, then he would be advising her to have her electricity meter checked and have someone look at her major appliances, if as she allegedly asserts in her email to him, there has been no change in lifestyle which would explain higher electricity use.

Perhaps Mr. Abbott might like to also speak with his political colleagues in the Barnett Government, given a June 2012 final report by the WA Economic Regulation Authority foreshadowed further price increases next year based on Synergy's operating costs:

Synergy reported that its forecast increases in operating costs were based on the following explanatory factors:
- an expected increase in the costs of dealing with customer complaints, due to tariff increases, and additional Ombudsman-related compliance costs;
- the implementation of new products and services required by government;
- increasing implementation costs associated with the new billing system;
- costs associated with strategic projects and business transformation; and
- higher IT costs arising from the separation of IT systems from Western Power.

Though, given this is a West Australia story, perhaps it is more than Mr. Abbott who has a connection with a mining industry unhappy about the national carbon price scheme and who may be intent on pushing the anti-tax case. Parliament might like an explanation as to how this pensioner came to his notice.

Payback is a b!tch

Federal Liberal Party MP Malcolm Turnbull in The Sydney Morning Herald on 11 August 2012 busily contradicting the electricity pricing position of the man who ousted him as Leader of the Opposition:

"Over the last five years or so in the east coast capital cities, electricity prices have gone up by about 50 per cent. This is pre the carbon tax. That has been largely a function of the investment in distribution and transmission, in poles and wires,"…..

Because they are borrowing with the benefit in effect of a government guarantee, they have got a real incentive to invest and indeed to overinvest. This is what's called gold-plating,"…

In many cases they are spending billions of dollars, so it is argued, to reduce the chance of a brownout from very, very little to very, very, very little,"…..

And now for the bad news - 2012/13 residential electricity pricing on the NSW North Coast

Independent Pricing And Regulation Tribunal NSW Draft Determination: Changes in regulated electricity retail prices from 1 July 2012 (PDF file)

Consumer Fact Sheet:

Electricity prices are increasing

Based on our draft decision, average regulated retail electricity prices will increase by around 16% across NSW from 1 July 2012 – or by between an average of 10.3% and 19.2% across different electricity supply areas. These changes follow average increases of 10% and 17% across NSW in 2010/11 and 2011/12 respectively.

Table 1.1 IPART's draft decision on regulated average retail electricity price increases from 1 July 2012 (including inflation, %)

EnergyAustralia	19.2
Integral Energy	10.3
Country Energy	17.6
NSW average	16.4

  

 Note: The increases in regulated retail electricity prices are based on forecast network price increases which are subject to approval by the Australian Energy Regulator in June 2012…..

This year, the increases proposed in our draft decision are primarily driven by:

 the continuing rise in forecast network costs, which contributes to around half of the average 16% price increase, and

 the introduction of the Federal Government's carbon pricing mechanism, which contributes to the other half of the average price increase.

The other costs that contribute to regulated retail electricity prices will decline slightly, or remain fairly stable…..

Independent Pricing And Regulation Tribunal NSW Media Release, 12 April 2012: