Gloucester community's landmark climate change case began in NSW Land & Environment Court, August 2018

Environmental Defenders Office NSW, 14 August 2018:

CASE SUMMARY

Gloucester Resources Ltd and Stratford Pty Ltd
v Groundswell Gloucester and Dept of Planning & Environment 

The Client: Groundswell Gloucester, a residents’ community group concerned with the environmental, social and economic future of the Stroud Gloucester Valley near Barrington Tops in the upper Hunter.

The Case: Represented by EDO NSW, Groundswell Gloucester was joined to proceedings that will determine the fate of the Rocky Hill Coal project, a greenfield open-cut coal mine less than 5km from Gloucester township.

Representation: Matt Floro, solicitor for EDO NSW, has carriage of this matter for Groundswell Gloucester and our Principal Solicitor, Elaine Johnson, is the solicitor on record. We are grateful to barrister Robert White for his assistance in this matter.

Experts: Emeritus Professor Will Steffen will for the first time give evidence in an Australian court that no new fossil fuel developments can be approved if we are to avoid overspending our carbon budget. Professor Steffen is a Climate Councillor on the Climate Council of Australia, Member of the ACT Government’s Climate Change Council, and was previously a Climate Commissioner on the Australian Government’s Climate Commission.

Energy analyst Tim Buckley will explain the financial mechanisms and market changes that are driving investments away from coal and creating a risk that Rocky Hill will become a stranded asset. Tim Buckley is Director of Energy Finance Studies, Australasia, Institute of Energy Economics and Financial Analysis.

60 community objectors include farmers, doctors, Traditional Owners and young people. This is also the first time in an Australian court that young people will talk about the impact of climate change and the impact of the mine on their communities, and future generations.

Timeline:

2016 - Community celebrations after AGL withdraws its application to drill 330 coal seam gas extraction wells in the area.

December 2017 - celebrations continue when the Planning Assessment Commission (PAC) refuses consent to the Rocky Hill Coal Project proposed by Gloucester Resources Limited (GRL). The PAC found that the mine was not in the public interest because of its proximity to the town of Gloucester, significant visual impact and direct contravention of the area’s zoning plans.

The PAC also refuses consent to a Modification of the consent for the nearby Stratford mine - operated by a related company of Yancoal Australia Limited - that proposed the receipt, processing and railing of coal from the Project.  The PAC found that the Modification would have no critical purpose or utility outside the Project.

Planning Minister grants both mining companies the right to appeal the refusal of consent to the Land and Environment Court.

February 2018 - Our client, Groundswell Gloucester, seeks to be joined to the proceedings.

April 2018 - following a full-day hearing, the Land and Environment Court orders that Groundswell Gloucester be joined to the proceedings brought by GRL.
In relation to the climate change ground, on joining Groundswell Gloucester, the Court noted that:
“GRL submits that the raising of the climate issue as proposed in a domestic Court if the Intervener were joined would not serve the purpose of improving this particular planning decision; and, instead, would be a “side show and a distraction”. I do not agree.”

Our client has been permitted by the Court to present expert evidence on climate change and the social impacts of this new mine. The Court will hear anthropological evidence about the social impact of mining on the community.

This is the first time an Australian court will hear expert evidence about the urgent need to stay within the global carbon budget in the context of a proposed new coal mine.

Key dates: 
13-14 August 2018
Opening submissions at the Land and Environment Court, Macquarie Street, Sydney
15 August 2018
Site visit (parties only) Gloucester
16-17 August 2018
Hearings in Gloucester (community objectors)
20-24 & 27-31 August 2018
Submissions and expert witnesses at the Land and Environment Court, Macquarie Street, Sydney

Background

This is the first hearing of its kind since the historic Paris Agreement in which a superior jurisdiction Australian court will hear expert testimony about climate change, the carbon budget and the impacts of the burning of fossil fuels.

For years EDO NSW has supported the Gloucester community, providing legal and scientific advice. This contributed to a recommendation from the Department of Planning and Environment (DPE) in 2016 to the Planning Assessment Commission (PAC) to refuse GRL’s greenfield mine application, known as the Rocky Hill Coal Project (the Project) and the associated Stratford modification.

In December 2017, the Planning Assessment Commission (PAC) refused consent to the Project and the modification, finding they were not in the public interest because of proximity to the town of Gloucester, significant visual impact and the area’s zoning under planning laws.

In deciding how the Project and modification would be assessed, the NSW Minister for Planning granted unusual merit appeal rights to GRL and Yancoal who are now joined together in aggressively challenging the refusal in the Land and Environment Court.

Both coal companies have recruited their own legal and scientific teams. However Groundswell Gloucester was not told about the merit appeal until February, two months after GRL filed the case.

EDO NSW case page: www.edonsw.org.au/groundswell 

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Concerned citizens can donate to the Environmental Defence Fund here.

William Fraser Anning - an ugly aspect of far-right politics in Australia

The Sydney Morning Herald, Fraser Anning

William Fraser Anning then a member of Pauline Hanson’s One Nation Party was declared elected to the Australian Senate on 10 November 2017, as a replacement for the recently disqualified dual citizen Malcolm Ieuan Roberts.

Less than seven months later he had joined Katter’s Australian Party.

In the 2016 general election Anning had received a grand total of 19 votes (59 if transferred votes are counted) out of a possible 2.72 million Queensland ballots cast. The Queensland electorate had firmly rejected him.

Hansard shows that at 17:06pm on Wednesday 14 August 2018, nine months after taking up his seat, Anning made his formal First Speech on the floor of the Senate.

This is how The Sydney Morning Herald reported this speech on 14 August 2018:

Queensland senator Fraser Anning has praised the White Australia Policy and called for a plebiscite as "the final solution to the immigration problem" in the most inflammatory maiden speech to an Australian Parliament since One Nation leader Pauline Hanson's in 1996.

The Katter's Australian Party senator, formerly of One Nation, used his first speech to the Senate on Tuesday to lament the demise of "our predominantly European identity" of the 1950s and '60s.

The Guardian’s opinion piece on 15 August 2018 pointed out the dangers before us:

Fraser Anning is in the parliament by accident. Having fluked his way into the Senate chamber because One Nation needed a replacement for Malcolm Roberts, he now wants your attention, and judging by his performance in the Senate on Tuesday night, he doesn’t care what lines he crosses to get it.

What we are witnessing in national politics is the latest manifestation of Australia’s cultural cringe. Far right political operatives, and the media voices prepared to give them succour, are importing the nationalist debates that have sprung up in the shadow of the global financial crisis – the biggest economic dislocation since the great depression.

We are building our own tinder box, bit by bit.

Debates about race, and sovereignty, and immigration have caught fire elsewhere because of deep resentments felt by the losers of globalisation. Australia didn’t suffer the biting effects of the global financial crisis, and the prolonged economic downturn that followed it. By comparison to the visceral experiences elsewhere, in this country we experienced a chilly, stiff breeze.

Notwithstanding these facts, we are importing the outrage consciousness that exists elsewhere, validating it, willingly projecting an alternate reality onto our own domestic circumstances as a grotesque form of entertainment.

We are building our own tinder box, bit by bit.

This would be pathetic. Almost laughable. Except in terms of race and politics, we are now in the most explosive period we’ve been in since John Howard sailed into choppy waters with his feelings on Asian immigration in the 1980s.

There is nothing to laugh about. Right now, there are all the ingredients of a perfect storm.

The first ingredient is a fractured bunch of far-right leaning political voices in mortal competition with one another for votes. The last 24 hours has been a public competition between Anning, and his new running mate Bob Katter, and One Nation, for attention. Anning and Katter apparently want to establish a new beach head, charting territory where Pauline won’t follow. Just let that happy thought settle on you for a minute or two.

The second ingredient is a polity profoundly disaffected by the repeated failings and default narcissism of Australia’s major party politics, frustrated by their congested cities and low wages growth and by governments who spent more time fighting their fractured internals than navigating the future. The third is a disrupted media landscape where conflict – the louder and more notorious the better – is hard currency.

Fraser Anning used his first speech to parliament to spin his own obscurity into notoriety: to try on a troll suit in full public view.

The Monthly spoke of  Anning as "unrepresentative", "accidental swill" on 15 August 2018:

Fraser Anning’s execrable first speech in the Senate yesterday, proposing a “final solution” on Muslim immigration, marks a new low for Australian politics, but assuredly not for long. Things are likely to get worse before they get better, as a bunch of illegitimate right-wing nobodies in the Senate compete for race-hate shock value in the lead-up to the next election. The combination of a double dissolution in 2016 and the citizenship crisis has burdened us with the least representative Senate in living memory. The crossbench is populated by senators who won on the donkey vote, defected, were elected on a countback or were hand-picked mid-term and are yet to face the people. Most face electoral oblivion in 2019. We are used to hearing of “unrepresentative swill” in the Senate, where one vote, one value has never applied, but a record number of our current senators literally don’t deserve to be there. Call them accidental swill.

Anning’s speech, in which he called for a return to the White Australia policy, did not come out of the blue. We have been building up to this steadily. From Pauline Hanson’s return to parliament, to Tony Abbott’s dog-whistling on immigration policy, to Peter Dutton’s attacks on “African gangs”, to Andrew Bolt’s comments about Chinese, Cambodian, Indian and Jewish communities“changing our culture”, to Sky News airing an interview with neo-Nazi Blair Cottrell, the trend is clear: we are sliding ever-faster down a slippery slope towards an ugly, divisive race-card election.

Although his formal first speech was somewhat tardy, according to They Vote For You Anning has been busy voting strongly in support of:

Adani's proposed Carmichael coal mine

Changing the wording of section 18C of the Racial Discrimination Act

Decreasing ABC and SBS funding

Getting rid of Sunday and public holiday penalty rates

Increasing investment in the coal industry

Live animal export

Making more water from Murray-Darling Basin available to use

Offshore processing of asylum seekers

Privatising government assets

Privatising the ABC

Putting welfare payments onto restricted debit cards

Reducing the corporate tax rate

Regional processing of asylum seekers

Speeding things along in Parliament (procedural)

Civil celebrants having the right to refuse to marry same-sex couples

On 14 August 2018 lawyer Richard McGilvray, an adviser to Senator Anning, resigned his position in protest.

Posting on Linkedin that: "I do not condone SenatorAnning's speech. His reference to 'the Final Solution' was not something I had seen, heard of, or discussed prior to his remarks last night and as a consequence, within hours of Senator Anning's speech, I resigned my position effective immediately. I'd like to thank many of you for your messages of support and encouragement this morning."

It is understood that the adviser who drafted Anning's First Speech was Richard Howard, who was formerly a staffer for One Nation's Malcolm Roberts and Liberal Democrat David Leyonhjelm.

As is to be expected Anning's speech has been fact checked and found to contain numerous errors.

To date, Senator Anning has not issued an apology for elements of that speech.

Great Barrier Reef: $487.63 million to do little more than sit by the bedside of a dying reef system?

The Sydney Morning Herald, 7 August 2018:

The Great Barrier Reef Foundation has had some good fortune that few environmental NGOs could count on. The $444 million it was granted by the government earlier this year dwarfs its previous budgets by a large multiple. Having worked in two small environmental charities of a similar operating budget and staffing to the pre-windfall foundation, I can confirm getting so much money without even applying for it is far beyond anyone’s wildest dreams.

Still, the biggest questions about the GBRF windfall don’t relate to its good luck in an opaque government decision, or even its connections to the fossil fuel industry. 

These are entirely valid concerns, but they risk eclipsing the bigger significance of the government’s move.

What we also need to ask is: what does the foundation do? What are its outputs, its activities? And why would the federal government be so keen to direct such a huge chunk of funding to those activities?

At best, the government’s massive funding dump is a long-shot attempt to save a few bits of the reef from inevitable degradation. At worst, it’s a distraction from that fate – and a diversion from addressing its causes.

The foundation has standard governance structures, and the support of credible, dedicated scientists. But what it does it essentially triage.

It’s now clear the government understands that even in the best climate scenario, the Great Barrier Reef will not survive in its recent form. The Department of Environment and Energy acknowledged this just last month. Even the Queensland tourism industry has publicly come to terms with the certainty that the reef will continue to suffer from climate change.

Scientists have been telling us since the 1980s that even modest climate change is a threat to coral reefs. Corals are so sensitive to changes in temperature that even in the best case warming scenario – achieving the 1.5 C stretch goal of the Paris Agreement - it’s now estimated that only 10 per cent of the world’s reefs will survive in their current form. At 2C, none are expected to escape “severe degradation and annihilation”.

The foundation delivers projects focused on “resilience, restoration and innovation”. That means doing its best to protect and restore the reef. It notes climate change is the biggest threat, but it does not address greenhouse gas emissions, at either a local or systemic level.

Its activities are similar to those we’ve seen from several other reef-focused initiatives and programs in recent years: breeding resilient corals, establishing small refuges, developing monitoring tools, and supporting species such as turtles and dugongs.

Projects like these have been allocated hundreds of millions of dollars of federal government funding through various programs over the years, including water quality and run-off management along with contentious projects to removing Crown of Thorns starfish, and more radical measures such as underwater fans to drive cooler water from the depths. The foundation, for its part, reported recently on testing of a polymer “sun shield”, noting that the technology would only scale to smaller, “high value or high risk” parts of the reef.

A good case can be made that these experiments are pragmatic. Even if emissions stop tomorrow, locked-in warming will continue to ravage the reef for the next few decades.

The foundation counts respected research institutions among its partners, and scientists such as Professor Ove Hoegh-Guldberg of the University of Queensland are on its scientific advisory board. For Hoegh-Guldberg, who sounded the alarm on the threat of climate for coral reefs in 1999, the foundation provides an important opportunity to educate corporations on the dire state of the Great Barrier Reef and climate in general. Again, its scientific review processes have not been questioned.

However, it’s important to remember that there's no guarantee these “resilience” activities will succeed against a backdrop of waters reaching temperatures deadly to coral. Whether portions of a complex marine ecosystem can be preserved, and in what form, is still very much unknown. Professor Terry Hughes, a contender for world leading coral reef expert, is dubious; in a Nature paper he found that water quality and fishing pressure – two key ways of improving resilience - made little difference in the face of devastating warm surges.

BACKGROUND

WEDNESDAY, 8 AUGUST 2018, Great Barrier Reef Foundation: waiting for the inevitable crash

Medicare Australia State of Play 2016-2018

The Australian Minister for Health and Liberal MP for Flinders Greg Hunt tweeted this on 16 August 2018:

Here are the facts on Medicare:
✅Today’s Medicare data shows a record bulk-billing rate of 86.1%
✅This is 4% higher than anything Labor could achieve
✅Almost 9 out of 10 trips to the GP are free
✅Funding for Medicare this year alone is $5.5 billion higher than Labor put in

— Greg Hunt (@GregHuntMP) August 16, 2018

So what is all this self-congratulatory chest-beating about?

According to the Department of Human Services in 2016–17 a total of 24.9 million people were enrolled in Medicare.

In 2017-18 Medicare recorded a total 419,852,601 Schedule Items on which Medicare benefits were paid.

This figure represents on average 1,672,091 items per 100,000 people.

According to Heath Minister Hunt the Medicare bulk billing rate in 2017-18 stood at 86.1 per cent of the total number of Medicare benefits claimed, leaving 13.9 per cent of Medicare benefits to be claimed by the patient.

Based on 2016-17 figures this would indicate in excess of 13.3 million of these Medicare benefits were claimed online by the patient.

Medicare also recorded 3,318,396 payments of Schedule Item 3 General Practitioner Attendances To Which No Other Item Applies, which is a medical service for which there is a 100% Medicare benefit.

That’s an average 13,216 items per 100,000 males and females between 0-4 years and 85 years or over.

However, none of these statistics reveal the number of GP or specialist doctor medical practices which charge patients an upfront amount above the scheduled Medicare benefit amount.

According to the Royal Australian College of General Practitioners (RACGP) the real percentage of patients who had all their GP visits bulk billed during 2016–17 was an est. 66 per cent.

Which meant that an estimated 34 per cent of GP patients in that financial year paid an upfront cost that might not have been able to be fully claim from Medicare.

The Australian Medical Association (NSW) in a 2018 statement suggests that these patients are likely to be paying an average of $48.69 in out-of-pocket fees.

The Australian Institute of Health and Welfare states in its Health Services Series Number 80  that in 2016-17 there were 7.8 million attendances at public hospital emergency departments and “at the conclusion of clinical care in the emergency department, 61% of presentations reported an episode end status of Departed without being admitted or referred”, which indicates that this percentage may contain an unspecified number of individuals who attended a public hospital emergency department because a bulk billing GP was not practicing in their local area and they were not able to readily afford an upfront fee or additional out-of-pocket expenses.

ABC News reported* on 17 August 2018 that:

> 1.3 million people delay seeing a doctor because of the cost;
> 1 in 2 Australian patients faced out-of-pocket costs for non-hospital Medicare services, with the median cost sitting at $142 per person;
> almost 35 per cent of out-of-pocket expenses were spent on specialist services, while almost 25 per cent went to GP gap payments; and
> a further 12 per cent was spent on diagnostic imaging services, like radiology.

Greg Hunt's tweet has definitely avoided facing the Medicare elephant in the room. 

* Based on MyHealthyCommunities: Patients' out-of-pocket spending on Medicare services 2016–17 released August 2018.

Clarence River Estuary communities need to remain both alert and alarmed as NSW Berejiklian Government seeks to expand exposure to international cruise ship industry

In July 2018 the NSW Berejiklian Coalition Government released the document “NSW Cruise Development Plan” to the delight of the international cruise ship industry.

This plan confirms that Berejiklian ministry - sitting in offices over 670kms south of the small towns of Yamba and Iluka on the banks of the Clarence River estuary - is still pursuing the idea that the Port of Yamba is a potential official cruise ship destination.

The state government also obviously expects that Clarence Valley local government will both accommodate the needs of the plan and contribute to the cost of meeting this aim if it is progressed.

To further the Berejiklian Government’s aim to make as many small ports or undeveloped harbours/inlets capable of use by cruise ships the NSW Cruise Development Plan states that:

A regulatory framework that fosters the competitiveness of ports, encourages the expansion of the tourism sector, minimises environmental impacts, protects the community, and supports jobs growth is required for the NSW cruise industry.

National regulatory barriers currently inhibit the cruise industry, including the small expedition and luxury cruise market’s, access to NSW coastal ports.

Differences in regulatory requirements between states also restricts the freedom of cruise liners to set national itineraries that take advantage of regional ports.

The NSW Government will continue to lead discussions with the other States, Territories and the Commonwealth on removing regulatory barriers that limit cruise ship growth potential.

Action: The NSW Government will investigate opportunities to remove regulatory barriers to entry for emerging cruise markets, including the expedition cruise market, and will seek an inter-jurisdictional policy position with other governments. [my yellow highlighting]

What the Liberal-Nationals government in faraway Sydney considers as “regulatory barriers” may not be what the people of the Lower Clarence River consider as impediments which should be removed.

These regulations cover all aspects of port safety, marine pilotage and marine pollution as well as port boundaries, riverbed disturbance, moorings, traffic control, service charges, licencing and penalties for breaching regulations.

They are in place for good reason and any weakening of these regulations has the potential to affect the environmental sustainability of an ancient, healthy and highly productive estuary system which is the largest in south-east Australia and, whose waters are covered by Yaegl Native Title.

Facts estuary communities may need to continually press upon a state government wrapped up as it is in a cosy relationship with the international cruise ship industry.

The first unintended consequence of Malcolm Turnbull's perverse $487M grant to the small Great Barrier Reef Foundation surfaces

The Sydney Morning Herald, 15 August 2018:

The Turnbull government's claim its $444 million grant to the Great Barrier Reef Foundation would spur private donations has been disputed by a leading coral scientist who says funding for his own venture has dried up in the wake of the cash splash.

Charlie Veron, a marine biologist dubbed "the godfather of coral" for discovering more than one-fifth the world's coral species, said US donors to his Corals of the World website dropped plans to donate $60,000 once they saw "the Australian government was going to pour a fortune" into reef projects.

"My source of funding has completely stopped," Dr Veron said.

Dr Veron said his website, a decade in the making, would be crucial for any future recovery work on the reef, such as the $100 million reef restoration and adaptation program that will now be under the foundation's stewardship.

Dr Veron said he met last week the foundation head, Anna Marsden, who said she "didn't have any money that could go" to his project despite it needing $200,000, or one-quarter of 1 per cent of the government's largesse, to survive.

"The whole thing is just a mystery to me," he said. "It's a drop in the bucket if ever there was one."....

A foundation spokeswoman said Dr Veron had been one of "a number of organisations [that] have expressed an interest" in seeking funds.

"At a recent meeting, we advised Dr Veron that a process was being established to consider proposals under the Reef Trust Partnership," she said. "We will consider proposals for funding once the governance and advisory framework is established and a process for applications has been approved."

Fairfax Media approached Josh Frydenberg, the environment and energy minister, for comment.

"Perverse outcomes are going to be part of a process that wasn't thought through," Tony Burke, Labor's environment spokesman, said. "The due diligence [into the Foundation before the grant was made] was a joke."

Mr Burke said it was possible that less private funding would available for reef projects than before as a result of "decision making with almost no formal process".

The foundation spokeswoman said that the non-profit will continue to make the raising of private funds "a focus and responsibility, so we can amplify the impact of the government’s investment".....

Dr Veron said donors to his site had poured in $2.5 million to build the most complete record of corals that would be critical for efforts to restore reefs in the future. For instance, it has identified and made available information of eight coral species that appear to be able to resist bleaching.

Once more a Coalition federal government is promising savings on household electricity bills

“Throughout the 1980s, '90s, and most of the 2000s, electricity prices tracked fairly closely to general consumer price trends. In the past decade, however, electricity has shot off the charts. Since 2008 power prices have risen 117 per cent, more than four times the average price increase across sectors.” [ABC News, 18 July  2018]

All three major NSW political parties - Liberal, Nationals and Labor - along with their federal counterparts drank the Kool-Aid when it came to the alleged desirability of privatising state assets in the electricity and gas sectors of energy supply.

Here is a brief outline of the how and why...... 

DECEMBER 2010

THE NSW [Keneally Labor] government has sold a giant slab of the state's electricity assets for $5.3 billion, completing a late-night deal with power generators that the opposition says secures only half of what the assets are worth and experts say will mean higher electricity bills…..

"The completion of this first tranche of the energy reform process meets the government's objectives – we have exited electricity retailing, we have created a competitive market structure approved by the ACCC and we have received a strong financial return for the taxpayers of NSW,” he [NSW Treasurer] said…..

Earlier, the shadow treasurer, Mike Baird, said: "Whatever they finally announce, it is clear from the ongoing speculation that the receipts will be at the lower end of the $5 billion to $7 billion range, which is about half what these assets are worth – and that is before you take off the $2.3 billion in inducements for the new coalmine needed to get the deal away.

'The end result is billions of dollars lost forever."

A UBS analyst, David Leitch, said: "NSW households are in for higher electricity tariffs and more people at their front door, trying to get them to change electricity supplier."

NOVEMBER 2013

After a three-year campaign to scrap the carbon tax, Prime Minister Tony Abbott has wasted no time in preparing legislation for its final destruction. He's demanding that the Senate pass it by Christmas….

"When this bill is passed, this Government estimates that power prices will go down by 9 per cent, gas prices will go down by 7 per cent, and that means that the average power bill will be $200 a year lower and the average gas bill will be $70 a year lower," Mr Abbott said on October 15.

JUNE 2014

In May 2014, the NSW [Baird Coaltion] Government signed up to the Council of Australian Governments (COAG) National Partnership Agreement on Asset Recycling (the Asset Recycling Initiative). Under the Initiative, the Commonwealth provides incentive payments equal to 15 per cent of the sale or lease proceeds that are reinvested in new infrastructure….

As of 12 May 2017, two government assets have been privatised in 2017. The most recent privatisation is the 99-year lease of a 50.4% share of Endeavour Energy. On 11 May 2017, the NSW [Berejiklian Coalition] Government announced that a consortium led by Macquarie Group's infrastructure arm had been successful in securing the tender for a price of $7.6 billion. Along with Ausgrid and Transgrid, the lease of Endeavour Energy represents the final of the three “poles and wires” sales – a key policy of the Liberal/National government in the 2015 State election. Announcing the sale, NSW Treasury stated:

The NSW Government will retain a 49.6 per cent interest in Endeavour Energy and will have ongoing influence over operations as lessor, licensor and as safety and reliability regulator.

June 2017

Two decades ago Australia embarked on an experiment with the privatising, corporatising and marketization of the electricity sector. The proponents at the time assured the nation that everything would be better…..

Electricity is now management heavy with a blow out in the number of managers relative to other workers. In addition electricity now employs an army of sales and marketing and other workers who do not actually make electricity. In addition the reforms seemed to encourage profit gauging on the part of companies in the industry who are able to inflate the asset base used in calculating the permitted return on assets. More than half the asset base appears to be ‘goodwill’ and retained earnings. There is a weird circular process in which high rates of return are capitalised in ‘goodwill’ and other fictitious or notional items while high profits guarantee high retained earnings which also feed into the asset base. In that way the unproductive capital base is allowed to increase and we are charged for capital that has no real function in producing electricity….

A host of factors have been blamed for the increase in electricity prices relative to other prices but we would point out that the main departure from the rest of the price index happened post privatisation and corporatisation.

JULY 2017

POWER prices are set to rocket after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states.

Origin, EnergyAustralia and AGL have all announced price increases for electricity and gas starting from July 1….

In NSW, residential EnergyAustralia customers will see electricity prices increase by up to 19.6 per cent. Origin Energy customers will get a 16.1 per cent rise.

DECEMBER 2017

Key [Australian Energy Market Commission] findings for New South Wales.

The key supply chain cost components examined in the report include wholesale electricity purchase costs, regulated network costs and environmental policy costs.

Annual electricity prices for the representative consumer on a market offer in New South Wales:

* increased by 10.2 per cent from 2016-17 to 2017-18 due to higher wholesale electricity costs, driven by the retirement of Northern and Hazelwood generators and increasing gas prices

* are expected to decrease by an annual average of 6.6 per cent in 2018-19 and 2019-20. The expected decreases are largely attributable to decreases in wholesale electricity costs driven by expected new generation (approximately 4,100 MW across the NEM) and the return to service of the Swanbank E generator (385 MW in Queensland). In addition, in NSW, regulated network costs are uncertain in the two years to June 2020 due to the AER being required to remake revenue determinations for the NSW distribution network providers for the 2014-19 regulatory control period.

JANUARY 2018

Electricity prices have jumped by six times the rate of the average pay rise, new figures reveal, as family wallets are increasingly squeezed by essential services such as education, utilities and fuel….

The most significant price rises were electricity, up 12.4 per cent, fuel up 10.4 per cent, domestic holiday travel up 6.3 per cent and fruit up 9.3 per cent. 

Across New South Wales, we found theaverage annual electricity bill to be just over $1,667. However, we found that bill-payers aged in their 40s reported the highest average bills in NSW at $1,911.76. Those aged 70 or over reported the lowest average bills at $1,466.40.

JULY 2018

Late last year, the government released independent modelling forecasting the average annual household bill would be $400 a year lower from 2020 onwards, based on 2017 prices.

This was comprised of $120 due to the [national energy] guarantee and $280 due to new investment in renewable energy that was already planned, mainly because of the Renewable Energy Target, which will run to 2030….

The ESB [Energy Security Board**] proposal increases the annual average saving to $550 on 2018 prices, of which $150 is due to the guarantee and $400 due to renewable energy.

AUGUST 2018

The Turnbull Government says the NEG* will save the average Australian household $550 a year on their power bill.

After reading the National Energy Guarantee Consultation Paper as well as the 1 August 2018 Final Detailed Design and listening to statements made by the Turnbull Government, I personally find it hard to believe this change in federal government policy will significantly limit the rate of increases to household energy costs over time when this is based on an assumption that the market will respond by lowering prices across the Australian wholesale and retail sectors of energy supply.

Talk of money 'saved' by households is illusory as It will certainly see no reduction in the actual amounts listed on 2019-20 household electricity and gas bills once this guarantee comes into effect.

*KPMG Economics, November 2017, NEG and Electricity Pricing

Network charges represent on average about half of the electricity supply chain costs, with generation and retail costs (combined into the ‘competitive market’ category) accounting for 42%, and environment policies adding the remaining 8%, based on the latest AEMC Electricity Price Trend report.

The make up of the total average retail cost is shown in Chart 6 which reveals the single largest component of the price of electricity is distribution costs, which represented about 40% of the average cost of electricity. Over the AEMC forecast period to 2018/19, these costs are still expected to represent by far the largest component of the electricity cost stack, albeit fractionally lower in a couple of years’ time.

The next largest component is the wholesale price of electricity, which in 2015/16 represented about 28%. Under the AEMC Base Case scenario – which includes the retirement of the brown coal fired Hazelwood Power station in Victoria – this cost component had been anticipated to rise steadily over the forecast period to represent about 30% of the cost of electricity by 2018/19.

As shown in Chart 7 below, these three jurisdictions experienced higher than anticipated wholesale electricity costs in the order of between 30% and 80% when compared to original forecasts for FY2016/17. When considered on a weighted average basis, using the same methodology applied by the AEMC to estimate the values for the National Summary, wholesale electricity costs have therefore been about 17% to 20% higher than anticipated.

This increase in wholesale electricity costs pushed the bundled cost of electricity to rise by about 5% higher than anticipated by the AEMC, and shifted the relative importance of wholesale prices in the cost stack from about 28% to 31%.

** Energy.gov.au, A Better Energy Future for Australia

Formed out of the Independent Review into the Future Security of the National Electricity Market (the Finkel Review), the Energy Security Board comprises an independent chair and deputy chair along with the expert heads of the Australian Energy Market Commission (AEMC), the Australian Energy Regulator (AER) and the Australian Energy Market Operator (AEMO).

The current Board membership is Chair Dr Kerry Schott AO,  Deputy Chair Clare Savage, Australian Energy Market Commission Chair John Pierce, Australian Energy Market Operator Chief Executive Audrey Zibelman, and the Chair of the Australian Energy Regulator Paula Conboy.