1st July – Let’s push the power price up

By Ross McInnes, QDO Vice-President

With the becoming of a new financial year brings with it that unpleasant yearly ritual of of the jolt we all experience from our increased to electricity bills.

When I look at our old accounts from December 2008, the off peak rate was 7.1c/kwh. From next week that will rise from 23c to 25.48c/kwh, which is a rise of 10.8 per cent this year and 358 per cent in just over 8 ½ years.

The most bizarre part of this increase means that the off peak power is now 4 per cent more expensive than the domestic rate. There is no way that energy retailers can seriously maintain power supplied to irrigation users between 9pm and 7am more expensive than domestic consumption during peak load periods. It now raises the unfortunate reality that the cherry picking that has resulted in the doubling of irrigator’s tariff increase compared to domestic tariffs has been politically motivated rather than cost reflective.

Prior to this year the reason for the increases has been to pay for the gold plating of the electricity network which was valued at a rate of return at least twice the best investment rate available. This year however, the daily charges have gone done by about 5 per cent, but the reason given for this increase has been the generation costs. The generation costs make up less than one third of the retail cost, so we are led to believe that these costs alone have contributed to the overall increase.

At present there is no transparency in electricity generation cost. Advocates for renewables continue to quote cheaper costs, yet we not yet seen a situation where increases in renewable regeneration have resulted in reduction in electricity charges for consumers.

Worst of all, there appears to be no desire from any state government around Australia to reduce electricity prices, because the dividends flowing into treasury coffers continues to prop up State budgets. It’s a good thing we still have our sense of humour, because we need it.