November 10, 2012

Back to candles and kerosine

Remember the ALP promise to go to war on grocery prices, even though government has no say in the price of Vegemite or frozen peas? 

Remember the ALP promise to go to war on petrol prices, even though every price inquiry has resulted in a finding that, shrug, petrol prices are what they are?

Now a new one, but more perverse.  (Is that possible?  Yes, yes it is.)

The Gillard government is going to do for electricity pricing what they did for grocery and petrol prices, only worse.

Having introduced a carbon emissions tax - and beforehand not noticing that electricity prices have been going through the roof for years, yet consumer usage has been dropping, and dropping, in a useless bid to out-drop the price increases - the Gillard government has suddenly become aware of what the rest of already know. 

Their solution?  Market deregulation and smart meters.

In Victoria, we started paying for the fully-paid-for-by-the-government smart meters a couple of years ago, meaning:  before we even got the meters, and we are paying twice.  We also got meters that aren't smart at all, since there's no ability to see the meter unless you wonder around outside.

The Auditor's report on Victorian smart meters found that, contrary to the claims that ushered in this wonderful technology, there was no benefit, real or imagined, to consumers

Of course, smart meters do mean that power companies can sack every worker who used to drive around doing the old-fashioned meter read.  They're not needed anymore.  For this, and for the meter that isn't smart, we pay more. 

As for "deregulation":  Victoria sold off power to the private sector long ago, and the prices have never stopped rising.  Yes, all power companies have to submit price increases to a regulator who approves or denies, rarely the later, but sometimes there is a bit of argy-bargy over just how high the price should go, which offers some sort of break on the private sector. 

Imagine, then, with a fully-deregulated private sector, the gloves off, the naked greed running rampant up the polls!

Year on year on year, I've used less and less electricity during each quarter.  Yet, my most recent winter quarterly bill was a splutter-worthy $100 more than for the same period last year.  That extra was the most recent power increase, approved by the government regulator, on top of every increase during the last five years, and on top of the smart meter charge, of which I've been paying for more than a year and will be paying for years to come (I got my "smart" meter a couple of months ago, coinciding nicely with the whopping latest usage price increase).


Are the people in this Labor government lunatics?  Do they understand anything about what is going on in the utilities sector?  Have they looked at pricing in the States that have already sold utilities to the private sector?  The States that are already rolling-out smart meters?  Do they understand power pricing?  The margins?  Simple economics - supply and demand?  Which in the utilities industry means the less the consumer uses, the more they put up the prices so as to maintain their margins?  The water industry is exactly the same - the regulator grants increases to price to make up for lost profits when consumers insist on being responsible citizens by curbing their water usage,  just as the government insists they do.

Kar-rist!  Kar-rist!  Kar-rist!  

This new big announcement from the Gillard government melts my poor little brain cells.  
The Gillard government will unveil an all-out assault on power bills, recommending the deregulation of prices for households and small business and "time of use" pricing to prevent wasteful investments in poles and wires that are used for only a few hours a year. 

The major shake-up which would do away with retail price controls set by state-based regulators and allow energy retailers across the nation to set their own charges will be hammered out by Julia Gillard and state leaders at next month's meeting of the Council of Australian Governments.

It could involve a roll-out of smart meters, which would allow consumers to avoid high tariffs during peak periods such as hot spells in summer.

Releasing the final energy white paper today, Resources and Energy Minister Martin Ferguson will also reject policies of reserving gas for local industry and declare that Australia must cut the costs on resources projects if a $230 billion pipeline of works is to be delivered.

And he will warn that if Australia is to secure the second $230bn pipeline of investment "we must reduce the costs of production in Australia", including cutting red tape and streamlining best-practice environmental approvals for major projects.

He will argue that realising the potential of the future will require "significant levels of investment in domestic infrastructure and further development of our resource base".

The paper will also reveal that Australia's domestic oil refinery capacity will plunge by 28 per cent between this year and 2014 because of the planned closure of Shell's Clyde and Caltex's Kurnell refineries in NSW, and that making greater use of "clean" energy could require more than $200bn in new electricity generation capacity by 2050.

Mr Ferguson will use the launch of the paper to declare that soaring energy prices are hurting households and businesses and are not sustainable, and will urge the states to resist populism and dump price controls set by state-based regulators.

"The willingness of other state governments to take on these hard reforms will be essential," he says in a speech to be delivered today, obtained by The Australian. "It will take political courage where others have failed."
 Oh bullshit!  Utter, utter bullshit.  

The only thing (not) keeping a check on prices in Victoria is the government regulator.  Take away the regulator and it really will be back to candles, kerosine and an esky to keep the milk and butter from going sour.

Labor takes aim at power bills


  1. Well said, Caz.
    Smart meters will also allow the supplier to shut off your supply if the system is overloaded.
    My mum is in Sydney and they have power prices which reflect the peak times.
    I think it's 6am to 10am is peak, 10am - 2pm is shoulder, 2pm - 8pm (or 10) is peak again, and 8 (or 10pm) to 6am is off-peak.
    Prices are very dear in the peak and shoulder periods.
    The ALP wanted to introduce this in Qld to "change the way we use power". Ridiculous.
    If you have a family, work, have kids, you must make food and bathe the kids etc at the peak times. It's fine to say, "Stay up after 10pm to do your laundry, use the dryer when you go to bed..." But who can do that when they work? Using the dryer when you sleep is not safe.

  2. Ah yes, the good old logical of "change the way we use power", by charging for when we use use most power.

    Now I'm no economist Kae (although I confess to having studied economics, but gave it away after two years), but I'm pretty sure I'm already charged more, I believe, when I use most power:

    - when I turn everything off, I'm already charged less
    - when I'm not at home, for example, I pay almost nothing (except those odd times when I'm not home for days on end, but oddly have higher power bills)
    - when I'm asleep, barely any charge at all
    - when I'm home and turn lots of stuff on, I'm charged a motza

    See, they've had that very system of charging since forever. It still hasn't changed the way the capitalist world and clocks compel us to run our lives, including sleep, work and play.

    It's just a shifty way of increasing prices and margins for private utilities companies. Not a damned thing us can do to decrease our peak usage. Well, I suppose in winter we could turn the heating on during the day, when we're not home, hey?


  3. Anonymous8:59 AM

    Yours truly has never been a student of anything, except homo sapien stupidity (that comes with the territory) but one thing iJustin has learned over the years is: in most cases one can usually swap "smart" (the adjective) with "smart" (the verb) to get a general idea of what smart can actually do to one.

    Verb: (of a wound or part of the body) Cause a sharp, stinging pain: "the wound was smarting".


  4. iJustin is being awfully smart for a Sunday morning.

    And yes, it does "smart", and will, in due course for the rest of the country.

    As Kae notes, one of the smarting aspects of smart meters is that on high usage days power companies can shut down entire suburbs, which they call a "brown out", but is actually a black out. They won't shut down businesses, of course, only consumers.

  5. In Qld currently we only have two domestic rates, ordinary and off-peak. The only way you get off-peak is with your electric hot water system . The previous labor government decreed that people wouldn't be able to buy electric hot water systems any more after, I think, July last year. You would have had to buy a solar system with its draw backs and high priced electric heating booster on cloudy days, or you could get heat pumps or similar.

    These two rates used to be what was in Sydney for domestic power.

    The problem with charging a fortune for power (or petrol) to try to "change how we use" them is that the use of power and petrol are pretty inelastic, which means that you must use petrol to commute, or you must use power when you use it as there is no alternative time for you to use the power - a bit like when you're at work all day and sleeping at night.

    These people are idiots.

    For years they've urged us to decrease our power usage so now we pay much more because of decreased demand in off-peak time. They, the powers that be (or should that be the power that is?), also make us pay a shitload more for power than we need to because we're subsidising the people with solar power who put energy back in the grid, we're paying for the installation of the solar (government rebate), we're paying for idiotic schemes like that moron Flannery's hot rocks crap, offshore wave generator experimets, ugly, ugly wind generators...

    We. Are. Paying.

    And we're subsidising the "green" "renewables" by our high power bills to make these alternatives look financially viable because they'll be cheaper than coal fired power.

    Listening to Amanda Vanstone today on Bolt she said that not too many private people were putting money into alternate energy - which should tell us it's a dead end.

  6. The "renewables" will never be cheaper: never ever. It's all about energy density, and none of the "green" alternative sources can ever have the energy density of good old oil or coal or nuclear power.

    Governments are also pretty woeful at picking winners, that's why they're "government" not "for profit private sector business". Yet governments, via a bunch of public servants, sit around picking solutions. That's not how the best of capitalism works.

    They keep doing it. They won't stop. One definition of insanity.

    And yes, we keep paying.