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Power to the people? Perhaps not.

By Terence Mills

There is something very strange going on with power pricing in Australia, particularly so in the states where privatisation of distribution and generation has occurred. Whilst the federal government have no ongoing energy policy for Australia you have probably noticed Turnbull laying in to the power chiefs, demanding that they turn up at meetings in Canberra where he lets them know in no uncertain terms that he, on our behalf, is not happy and he calls on them to let their customers know when they are coming off specially discounted deals. This much heralded concession evidently means that the big distributors will write a letter to their customers: big deal!

Then he demands that the head of AGL come to Canberra and he tears strips off him and says that he can’t close the Liddell power station in 2022 despite AGL having given the government over five years notice. Now he has AGL on a ninety day deadline to come up with an energy policy beyond 2022.

All very strange stuff coming from a government who are absolutely committed to avoiding having an energy policy largely because they would then have to take ownership of the problem, something they desperately don’t want to do as they see much greater mileage in blaming Labor for all their problems. Indeed, it seems that a major plank of the coalition’s re-election campaign for 2019 is based on calling people names, particularly Blackout Bill Shorten and having at least a couple of power blackouts over the summer, ideally in the Labor states of South Australia and Victoria.

Reading the Weekend Australian today – it’s an old habit I have dating back to 1964 – Caroline Overington has an article about the crushing pressure particularly on pensioners of energy bills. She mentions Turnbull’s suggestion that we all phone our power companies and demand a better deal and that’s exactly what she did evidently. She called Origin and instantly got a 30 per cent discount. Well, good on her you may say but if she was being overcharged to the extent of 30 per cent then surely there is a case for the ACCC to step in and prosecute these guys: this is money gouging and demands that government regulate pricing for what is an essential commodity.

Rather than a coordinated energy policy sensibly allocating a future role for a mix of LNG, Solar, Wind, coal, pumped hydro and the like we seem to have a Prime Minister running around the country announcing a feasibility study for Snowy 2.0 which should be published (or not published if it comes up with the wrong numbers) by the end of the year. Then, of course, there will need to be funding for the project which presumably will come from the existing stakeholders. The commonwealth is a minority shareholder in the Snowy Hydro, with a 13% stake. New South Wales and Victoria have 58% and 29% stakes respectively. So, unless Turnbull takes on the total cost on behalf of the Commonwealth or buys out the states, there will have to be some serious talking with the other stakeholders once the feasibility study is done and costings worked out.

Then we find Turnbull in Townsville telling the LNP faithful that he will fund a coal-fired power station in North Queensland using clean coal technology that has yet to be developed and funding it from the North Australian Infrastructure Facility even though it doesn’t meet NAIF criteria.

Surely we deserve better policy formulation than this random finger in the dam approach? The CEO of Alinta Gas summed up the prevailing situation on energy policy in Australia when he likened it to: playing a game of football with invisible goalposts: we don’t know what it is we are shooting for.

Where I live in Queensland electricity generation and distribution are still in public hands and despite the Abbott asset recycling scheme which had been embraced by the Newman LNP government the people of Queensland were not impressed and quickly despatched Newman and his henchmen after just one term. Looking at my most recent electricity bill from my monopoly publicly owned electricity distributor there are no special offers, no discount periods not even a free set of steak knives. Just a straight forward bill telling me what I have used, what I am being charged per kilowatt hour consumed, divided between two essential tariffs. The main tariff is for continuous power charged at 25.890 cents per kwh and the off-peak tariff used for pool pumps and in our case over night water heating charged at 20.482 cents per kwh plus GST in both cases. So, whilst we have the energy distribution companies in those states that have privatised this essential service playing silly buggers with opaque pricing, slick marketing and plans that are designed to confuse and mislead consumers, in Queensland we still have a straight forward and transparent pricing system.

I have no idea how my power charges in Queensland compare with those in other parts of Australia – although I would be interested in feedback from AIMN readers – but I do take comfort from the fact that as a voter I still have some control over the supply and pricing of this essential service and the ballot box is after all a blunt and persuasive taskmaster that always helps focus the attention of politicians.


13 comments

  1. Vixstar

    Hmmmm can’t wait wait till malfuntion turnbull, faux news Murdoch and onion eater Abbott die then we can all piss on their graves causing a river of yellow that we can hydro power all of Australia freeeeeeeee

  2. John Holmes

    While we are at it, how come gas from WA is sold cheaper in India than we can buy it in Australia. I guess our export royalties need to be adjusted to bring the prices into line. The FOB price for overseas customers should be the price to Australians. Other wise we are just giving our non renewable resources way for NO benefit to the citizens of this country.

  3. John Boyd

    ‘Other wise we are just giving our non renewable resources way for NO benefit to the citizens of this country’. That is what we have been doing for decades.

  4. Florence nee Fedup

    According to Simms, NPC, gas companies are still selling spot market at far lower than Australian prices? Why?

  5. Andrew J. Smith

    Not sure how Australia’s retail electricity prices compare with the rest of the world?

    I understand that e.g. Hungary it’s about 7-8c per Kwh which in real terms would equate to about 20c per Kwh, but with a far more significant usage outside of summer. An issue for household energy usage in Australia is the size of houses, running extras such as pools etc. tendency for open plan design which may preclude energy conservation?

    Not unlike the SSM debate whereby mainstream media keep voters largely unaware of SSM elsewhere so they have no context or anchor versus dog whistling and alarmism.

  6. Joseph Carli

    “Hello , Origin Energy..This is Caroline Overingham from The Australian, and I am doing an article on energy suppliers and I want to ask if I can get you to drop my energy cost down a few percentage points so I can report that “Our Man” Malcolm was not fibbing when he said we should all ask…so how about it?..”

    “Whay certainly, mam!…how about we say 30%…and tell Rupert I’ll take 5 to 1 on the back nine next Saturday!”

  7. helvityni

    JC, so pleased you got her surname wrong, never mind she is an award winning Oz journalist…??? Really ?

  8. Andrew J. Smith

    I never knew and was surprised that Overington held such a senior position vs being an occasional columnist, after watching and listening to her efforts or input to discussion on The Drum. I assumed she was simply doing maybe a ‘spouse’s job’ with a nice title but clerical assistant duties? I suppose ‘journalists’ are now like politicians, ie. they are owned and must keep to the top down script or intentions, versus acting with personal and occupational ethics.

  9. iggy648

    Here in Tassie (Aurora) mine averaged out at 29.5 cents per kwh. Light and power is higher than hot water rate, and there is a charge per day as well as a charge per kwh.
    My thoughts on why prices are increasing so fast?
    Every time a customer puts solar panels on their roof and goes completely (with batteries) or partially off grid, this is a loss of revenue for a power company. The power company has to make up for this loss of revenue by increasing prices to the rest of their customers. As prices go up, more of their customers will see installing solar as a good economical decision. As more people make that decision, the cost of power to the rest of the customers has to go up. As the price goes up, etc. The only way power companies can escape the vicious cycle is to invest in renewables themselves. I think that’s what AGL is (or was) intending to do. I can’t see the Australian Gas Light Company going back to coal based electricity generation, any more than they’ll be going back to lighting lamps with gas.

  10. Terry2

    According to Simms, NPC, gas companies are still selling spot market at far lower than Australian prices? Why?

    Florence

    Sad to say but their strategy seems to be to keep the domestic Australian price artificially high : if they released more gas on to the domestic market I guess the price would fall.

    Time for government to regulate.

  11. Stephen

    W.A still has the old system of State owned at 24.0673 cents per kWh on my last account. The previous Liberal Government floated various schemes at different times to offload it for a quick hit to cover poor spending practices in other areas with all the claimed magical benefits. Never managed to get enough public acceptance to try and pull it off. They made it an issue at the last election promising to do it if re-elected and ended up with a record setting loss in seats, you need to dive deep into the history books to find a bigger turnaround. This may have been one of a number of things but it was one of the main ones.

  12. Barry Thompson.

    I just averaged out our daily cost over 12 months at $4.23. That provides light and power for my wife and I with no children at home.
    We run A split system air con for cooling and heating as required, a large fridge; large freezer; solar boosted hot water; exhaust fans; ceiling fans; stove and hotplates; TV;DVD; PVR; stereo; washing machine; dryer; dishwasher; radio; computer and various other small appliances.
    We live in South East Queensland. That daily cost would not buy 4 cans of beer.
    As far as I am concerned, when you look at the convenience electricity provides, it is not an unreasonable cost.

  13. Zoltan Balint

    Dear John Holmes, price of WA gas to India is a negotiated contract price between India and the company selling it. Australians pay world parity pricing which is the spot market price and on average is near the top price in the world – NO NEGOTIATION no contract no guarantee of supply. Organised by Mr. Howard and Mr. Costello. You know the best treasurer and the best Prime … minister this country ever had.

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