Is the ACCC being verballed or has Sharri got it wrong?
According to the Liberal letterbox, Sharri Markson, “The Turnbull government will underwrite multi-billion dollar investments to build new coal-fired power stations…The Daily Telegraph understands Mr Turnbull will announce his support for the ACCC recommendation at [today’s] party room meeting.”
Except the ACCC didn’t recommend that at all Sharri.
Here is what they actually said:
“The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses,” ACCC Chair Rod Sims said.
“There are many reasons Australia has the electricity affordability issues we are now facing. Wholesale and retail markets are too concentrated. Regulation and poorly designed policy have added significant costs to electricity bills. Retailers’ marketing of discounts are inconsistent and confusing to consumers and have left many consumers on excessively high ‘standing’ offers.”
“While important steps have been taken recently, restoring electricity affordability will require wide ranging and comprehensive action. We believe our changes can and will, if adopted, have a powerful and tangible impact on electricity affordability for all Australians; this will reduce economic inequality and enhance our national welfare.”
“Three further points need to be made. First, our recommendations require some difficult decisions as sound economic reform usually does. Second, despite poor decisions over at least the past decade creating the current electricity affordability problem, it now falls to current Commonwealth and state governments to make the difficult decisions to fix it. Third, we must move away from narrowly focussed debates; addressing affordability requires change across a broad front,” Mr Sims said.
The ACCC’s recommendations include:
- Abolishing the current retail ‘standing’ offers (which are not the same between retailers), and replacing them with a new ‘default’ offer consistent across all retailers, set at a price determined by the Australian Energy Regulator (AER).
- Requiring retailers to reference any discounts to the new ‘default’ offer pricing determined by the AER, making it easier for consumers to genuinely compare offers. Conditional discounts, such as pay-on-time discounts, must not be included in any headline discount claim.
- A mandatory code for comparator websites be introduced so that offers are recommended based on customer benefit, not commissions paid.
- Voluntary write downs of network overinvestment, including by the NSW, Queensland and Tasmanian governments (or equivalent rebates). This could save consumers in NSW, Queensland and Tasmania at least $100 per year.
- Premium solar feed-in-tariff schemes should be funded by state governments and the small scale renewable energy scheme should be phased out, saving non-solar consumers $20-$90 per year.
- Government support to make bankable new investment by new players in generation capacity to help commercial and industrial customers and drive competition.
- Restructuring of Queensland generators into three separately owned portfolios to improve competition.
- Limiting companies with 20 per cent or more market share from acquiring more generation capacity.
- Improving the transparency of over-the-counter contract trading by requiring reporting of these trades to a central registry.
- Improving the AER’s powers to investigate and address problems in the market and increasing penalties for serious wrongdoing.
“The ACCC’s affordability measures for consumers also include improvements to state and territory concession schemes, and funding for organisations to assist vulnerable consumers to choose a low-priced electricity offer that suits their circumstances,” Mr Sims said.
“One of the most important recommendations is to move customers off excessively high ‘standing’ offers to a new standard ‘default’ offer to be independently set by the Australian Energy Regulator.”
Moving average residential customers who are still on the range of current ‘standing’ offers to the new ‘default’ offer could result in savings of $500 to $750 per annum (25-35 per cent). Similarly, small and medium businesses could save $1450-$2250 (30-35 per cent) per year by moving to a standard ‘default’ offer. Currently over 20 per cent of small businesses are on high ‘standing’ offers.
“Too many consumers and small business customers have given up trying to understand offers and switch in a confusing retail electricity market. Big changes are required to make it easier for consumers and businesses to understand market offers and improve competition,” Mr Sims said.
Australia has committed, through international treaties, to reduce its carbon emissions. The electricity sector has, understandably, been a key focus for these efforts given the historically carbon-intensive nature of electricity generation. However, various policy failures here have hurt consumers.
As the Finkel review identified, there has been a failure to facilitate an orderly transition from carbon-intensive generation technologies to cleaner ones. This is highlighted by the relatively sudden decisions by the owners of the Northern and Hazelwood power stations to close those plants. The short notice of closure of these plants did not enable the market to respond to expected shortfalls in capacity with adequate and timely investment.
While many incumbents have pointed to the lack of an enduring and stable climate change policy as a cause of investment uncertainty and under-investment, at the same time, they have had little incentive to invest in new capacity when they are reaping the benefits of higher spot and futures prices.
The National Energy Guarantee seeks to more clearly link the introduction of lower emissions generation sources to the ability to call on generators to produce energy when it is most needed. To the extent that this policy can encourage investment in capacity from a diverse range of sources, diluting market concentration and promoting competition to supply retailers, the policy should assist in delivering electricity affordability.
It’s hard to find a recommendation to build new coal-fired power stations in any of that.
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“Never let facts get in the way of a good story.”
Nor political rhetoric, propaganda, misdirection, deflection…
Sharri’s statements are either ignorance or wilful misrepresentation. One would have to suspect the latter.
But what a mess the NEM is! The much vaunted benefits of privatisation, namely competition and transparency, have not eventuated. In fact, prices have escalated and are hurting consumers as well as businesses. Emissions have come down far too slowly.
We’d have to be sceptical that the proposed reforms will be more than tinkering at the edges.
This is very odd :
If Sharri Markson has repeatedly set the national news agenda, then we must seriously reflect on the quality of journalism in this country.
Andrew Hastie has joined Tony Abbott in rejecting the NEG. The people of Canning need to remove this anachronism. Meanwhile, Steve Ciobo told Sky News this morning that if Australia abandons Paris, then it can also kiss any chance of an EU trade deal, post-Brexit, goodbye.
Then, in the Senate, Kristina Kenneally is going for the jugular over the GBRF.
“Yesterday, we learnt that the government’s top environment bureaucrat has decided refer this grant to the Audit Office. And well he should – well he should – it shows that the government’s own environment department does not have confidence in the government’s decision to award $444mil dollars of public money to a private foundation. But what did we learn today? Revelations in the media that the Great Barrier Reef Foundation, within days of getting this nearly half a billion dollars of public money, took their mining and banking mates from their Chairman’s Panel on a three-day luxury holiday to Hamilton Island.”
Still no word on new coal-fired power stations from anyone except Sharri.
“Coalition party room update: Abbott, Hastie, Pasin expressing opposition thus far. Possible Kevin Andrews will also be a naysayer #NEG “
By far the biggest problem with power pricing is State Governments privatising power plants to help balance their books resulting in profiteering. In Tasmania the Hydro is Government owned to which the state receives an annual divided from our provider.We were lucky that the much mooted sale of the thermal power plant at Bell Bay did not happen.
Just to emphasise, the ACCC said:
Voluntary write downs of network overinvestment could save consumers in NSW, Queensland and Tasmania at least $100 per year.
Moving average residential customers who are still on the range of current ‘standing’ offers to the new ‘default’ offer could result in savings of $500 to $750 per annum (25-35 per cent). Similarly, small and medium businesses could save $1450-$2250 (30-35 per cent) per year by moving to a standard ‘default’ offer.
These options to lower prices could be done immediately at no cost to consumers and with no political argument over energy plans. Why the hell would we fund new coal-fired power stations that the industry won’t touch without significant subsidy from us?
The PM just said at a press conference, when asked about new coal, that they were keen to follow recommendation 4 and then mumbled a bit about it being technology neutral. This is what it actually says….
The Australian Government should operate a program under which it will enter into low fixed-price (for example, $45–50/MWh) energy offtake agreements for the later years (say 6–15) of appropriate new generation projects which meet certain criteria. In doing so, project developers will be able to secure debt finance for projects where they do not have sufficient offtake commitments from
C&I customers for later years of projects. This will encourage new entry, promote competition and enable C&I customers to access low-cost new generation.
The program should operate for at least a four-year period, with support provided for qualifying projects. To qualify, a project proposal must:
* have at least three customers who have committed to acquire energy from the project for at least the first five years of operation
* not involve any existing retail or wholesale market participant with a significant market share (say a share of 10 per cent or more in any NEM region)
* be of sufficient capacity to serve the needs of a number of large customers
* be capable of providing a firm product so that it can meet the needs of C&I customers.
Spot on again Terrence. Some are good at digging up the dirt. And the fact she gets $25’000 for the schtick is pretty sad.
Though apparently she is donated the cash to a homeless shelter. So good on her for that.
refers to Sharri Markson’s “scoop” on the Joyce affair.
Her ‘credentials’ are of the same ilk as the paper tht she works for.
The IA link is interesting as, not only did Sharri not break the Joyce/Campion story first, she appears to have withheld the story from the New England electorate in the by-election held on 2 December 2017. Markson and other media intentionally held off on the story until the seat, critical to the Government’s hold on the lower house of Federal Parliament, had been secured by Joyce.
Ross Jones of Independent Australia wrote this on 19 November when visiting Tamworth to chase up on rumuours that were all around Canberra and the electorate, two weeks before the by-election :
if Sharri Markson knew this and withheld it to assist Barnaby getting back into office, as appears to be the case, should she be receiving an award for breaking the story or should that go to Independent Australia and is there anything in the journalist’s code that deals with reporters who withhold news items for political purposes ?
This will explain how Markson gets an award for anything other than Murdoch career enhancement:
I wonder if the Malware Government have seized upon this clause for Sharri to crow about?
“Government support to make bankable new investment by new players in generation capacity to help commercial and industrial customers and drive competition.”
Could be a godsend to the Adani project!
Keep in mind what we got with a technology neutral/ agnostic policy when it came to NBN.
David, they are talking about recommendation 4…it’s been mentioned a few times today.
See my comment at 1:20 pm
Delta Energy have expressed interest and Clive Palmer was at parliament house today too.
From last year….
“The so-called “clean coal” power generator being promoted by the Coalition has been revealed to be a 2009 proposal from businessman Clive Palmer that would be used to help provide electricity to Galilee coal mines planned by Palmer himself, Gina Rinehart, and Indian group Adani.
Waratah Coal, the company owned by Palmer’s Mineralogy, confirmed to the ABC on Tuesday that it had made an application to the Clean Energy Finance Corporation last Friday to finance a proposed 900MW coal generator that proposes to use an unproven technology, carbon capture and storage.”
Markson is just a robot.
Murdoch programs her, out comes the clatter-clatter of a mechanical process.
POWER PRICING BY THE HALF HOUR??
Yesterday, I had reason to discuss electricity pricing with my retailer POWER POINT.
[It was a 30 minute haggle over 0.5 units of power usage on the hot water circuit that is NOT used because I have solar hot water. The computer said that I had to have the roundup figure rather than the correct round down figure]. AHHHHH!!!!!
I was advised that my meters needed replacement so that I could read my usage every 30 minutes.
This stupid excuse is POWER POINT attempting to get me to “request” replacement at their cost.
The proposed new meters would have the capability of charging for power at the 30 minute instant rate at which the power companies are required to purchase power from the grid.
Naturally as power demand fluctuates during the day, power costs fluctuate in response, rather than the present system of a single unit tariff for all parts of the day.
Here we have the foundations for the next great power cost rise, so that the power retailers can pass on the fluctuating diurnal price to customers … and maximise profits.
The same thing happened about 40 years ago when NECC “upgraded” the meters to pulse supply so that during low load times, the generated power could be directed into heating hot water systems outside the usual 10PM to 6AM period.