Efficient Ways to Cut Energy Costs

Australians will have to pay up to an extra $1000 over the next three years for power, with about a third directly attributable to the proposed CPRS. But Queensland Mines and Energy Minister Stephen Robertson has raised serious questions over whether electricity prices should rise and also points to energy efficiency measures to reduce costs to the consumer.

Andrew Fraser in The Australian (16 December 2009):

AUSTRALIANS will have to pay up to an extra $1000 over the next three years for power, with about a third of the extra cost directly attributable to the Carbon Pollution Reduction Scheme.

The NSW regulator yesterday issued a draft ruling allowing the state’s three electricity companies to raise their charges over the next three years, and it is the first such ruling where the cost of a CPRS can be exactly determined.

The federal government has estimated that an ETS would add $1100 a year to the average family’s bills, with gas, fuel and groceries set to rise along with electricity.

Power prices in Australia are set by each state within a national framework, and the Australian Energy Regulator recently issued guidelines for South Australia and Queensland, with those for Victoria due to be released in the new year.

But these rulings allow only for increased charges for network costs and not a CPRS, making yesterday’s ruling by the NSW Independent Pricing and Regulatory Tribunal the first on what it sees as the potential cost to consumers of a CPRS.

While NSW is the first state to make such a call, its figures would be a guide for other state regulatory bodies when they issue their rulings for possible rises.

Under the NSW body’s draft ruling issued yesterday, the three main energy companies would be able to start charging for a CPRS from the middle of next year, even though the scheme was not due to start until the middle of 2011.

Notes issued with the ruling show that customers of Energy Australia would pay an extra $288 over three years for a CPRS, while those with Integral Energy would pay an extra $314, and those with Country Energy an extra $302.

This represents a rise in cost between now and 2012-13 of 23 per cent for Energy Australia, 25 per cent for Integral Energy, and 21 per cent for Country Energy.

In the case of all three distributors, the cost of a CPRS is about half the overall increase recommended by the independent regulator, with most of the extra cost to consumers coming from the need to replace ageing infrastructure.

The overall costs allowed by the NSW pricing tribunal would see rises over three years of $554, or 44 per cent, for customers of Integral Energy, $727, or 58 per cent, for those of Energy Australia, and $893, or 62 per cent, for those signed to Country Energy.

Tony Abbott seized on the last figure as evidence of how the CPRS would hit ordinary consumers.

He claimed that “those massive increases are due in significant measure to Mr Rudd’s emissions tax”. “There is a real problem here. Mr Rudd is trying to tell us that there is a painless way to tackle climate change,” the Opposition Leader said. “There isn’t. And we have learnt today from the NSW authorities that Mr Rudd’s emissions tax is likely to impact massively on Australian families.”

But the federal government planned to allow full or partial compensation for electricity consumers who earned less than $160,000.

The NSW opposition said the planned increases showed the extent that basic infrastructure such as powerlines had been allowed to run down under the Labor government.

Source: www.theaustralian.com.au

Mines and Energy Minister Stephen Robertson has today raised serious questions over the Queensland Competition Authority (QCA) draft determination on electricity price increases, to apply from 1 July 2010.

“I am concerned about the assumptions being used within the QCA draft determination,” Mr Robertson said.

“The QCA draft determination gives a significantly higher price rise than Government and members of the public would consider reasonable,” he said.

“I have directed my Department and Treasury to carry out a rigorous analysis of the QCA’s methodology.

“For instance, I fail to understand how New South Wales’ independent tribunal has this week assumed a zero per cent increase in the cost of energy, while the QCA today assumes it is rising at 10.7 per cent, and passed on a significant increase as a result,” Mr Robertson said.

The QCA today released a draft decision on the Benchmark Retail Cost Index (BRCI), recommending the maximum price of electricity should rise by 13.8 per cent from 1 July, for twelve months. The BRCI is used to adjust regulated electricity prices each year.

“I am concerned about the impact this will have on low-income earners and pensioners, which is why we will be closely scrutinising this draft decision. I will also be looking at the financial assistance programs available for people who are doing it tough.”

The Queensland Government knows some electricity consumers will find it hard to meet the price increase and provides help through:

•    a $3 million hardship scheme, with up to $720/year for households struggling to pay their electricity bills

•    the pensioner’s and senior’s electricity rebate, increased 15 per cent to $190.85 a year

•    $100 solar hot water systems for pensioners ($500 for non-pensioners) available through the Queensland Solar Hot Water program

•    The Low-Carbon Diet, promoting energy-efficient lifestyles through community groups

•    The ClimateSmart Home Service, giving energy efficiency advice to more than 120,000 home-owners.

“The QCA decision means households with an electricity bill of about $350 a quarter using approximately 8,130 kilowatt hours of electricity a year will pay an extra $194 on their bill in 2010-11, ” Mr Robertson said.

“Smaller households with power bills of $150 a quarter would face an increase of around $80 per year.

“If our analysis shows the QCA’s price rises are not supported by facts, or if there are ways to lessen the increases, we will raise this with the QCA in the months ahead.”

Mr Robertson said the QCA’s final price decision would be announced by 31 May and come into effect on 1 July 2010.

“The Queensland Government will make a strong submission in response to this draft determination. I urge Queenslanders to provide feedback during the public consultation, which runs until February next year,” he said.

Mr Robertson said although electricity prices were rising across Australia, until now Queenslanders had enjoyed below average charges.

An annual comparison of residential electricity bills in July this year showed that despite the price rises of recent years, Queenslanders had the third cheapest electricity in the country.

Source: www.mysunshinecoast.com.au