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News Power Cuts or Power Bill Cuts – Does it really come down to a choice?
Power Cuts or Power Bill Cuts – Does it really come down to a choice?

Power Cuts or Power Bill Cuts – Does it really come down to a choice?

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Last updated by Chris Zinn on

Who do you believe – the energy regulator charged with putting the long-term interests of consumers first? Or the NSW ‘poles and wires’ companies which actually deliver the stuff? 

That’s essentially the argument behind a high stakes legal stoush which will determine the size of planned 5-12% reductions to your next electricity bills.

And it’s especially important for older Australians who generally face higher bills. They are at home more, spend a higher proportion of their income on electricity; and are hit harder by climbing supply charges.

But those big savings promised to consumers are now under threat as the poles and wires companies and the NSW state government which owns them launch legal appeals against planned price cuts due on July 1.

So the FiftyUp Club is going to launch an appeal of its own: from today we’re asking you, the members, to send us your views on the legal battle, and tell us how higher electricity costs have impacted on your wallet and way of life.

Click Here to have your say by answering a few questions and commenting in our FiftyUp Forum

Read on to see what’s at stake, send in your comments and ideas and we’ll package them up for the tribunal hearing the case to ensure your voice is heard.

THE FULL STORY

The Australian Energy Regulator (AER) has fixed a five-year pricing determination which cut the amounts the NSW state-owned poles and wires businesses could charge us by some $6 billion to 2019.

It adds up to big savings for the consumer of between $100 and $300 a year depending where you live. It is aimed to bring the costs of delivery to NSW households in line with those levied by the privately-owned networks in SA and Victoria. Presently they can be twice as much.

We’re told those networks are more efficient and employ less workers, delivering lower costs to consumers. Falling demand for electricity means there’s also less need to build expensive ‘gold plated’ networks.

It was the massive investment and poorly controlled spending in the high-tech and high-cost ‘poles and wires’, including pylons and transformers, which saw many bills blow out by more than 70% in the past five years.

Network costs can add up to almost 60% of some people’s energy bills especially if they live in the higher cost of service rural areas.

But the NSW government and their poles and wires companies have lodged appeals to the Australian Competition Tribunal, claiming the cuts to their revenue mean they can’t operate safely or reliably.

They are backed by the trade unions as 2,200 jobs are at stake. The network companies say they have already shaved more than $3 billion and 3000 jobs from their capital and operating programs.

They also claim the cuts mean they can’t manage vegetation growth in rural areas, which, as the 2009 Victorian bushfires demonstrated, can carry serious risks.

Their arguments may sound convincing but have drawn fire from numerous quarters.

The ALP says the AER’s decision is fair and the NSW Government only wants to increase the waning value of the networks – a large part of which are up for a $13 billion long-term lease.

Groups representing consumers, welfare and business have also attacked the appeal and the Public Interest Advocacy Centre has brought its own legal challenge arguing for even bigger spending cuts on the networks.

To have your say, help us put together a submission to the Competition Tribunal.  Spend a few minutes answering the snap poll above on how power prices have affected your life, and leave a comment in our forum below.

We will report back soon on the next steps and make sure the voice of FiftyUps is heard.

From Christopher Zinn & The FiftyUp Club Team

Useful Links:

Daily Telegraph, 21 May, 2105, "Networks NSW will appeal energy regulators decision to cut the price of power bills for consumers": www.dailytelegraph.com.au/news/nsw/networks-nsw-will-appeal-energy-regulators-decision-to-cut-the-price-of-power-bills-for-consumers/story-fni0cx12-1227363388780

Sydney Morning Herald, 21 May 2015, "Electricity price cuts, privatisation plans under threat as power networks set up fight with regulator": www.smh.com.au/business/electricity-price-cuts-privatisation-plans-under-threat-as-power-networks-set-up-fight-with-regulator-20150521-gh6meh.html

The Australian, 21 May, 2015, "NSW power networks to fight cuts in court": http://www.theaustralian.com.au/business/nsw-power-networks-to-fight-cuts-in-court/story-e6frg8zx-1227364313737

 

 

 

Originally posted on .

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Power Cuts or Power Bill Cuts – Does it really come down to a choice?

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Christine
Christine from SA commented:

Come to South Australia!!!! The home of the most expensive electricity!!! Our star government has a lot to answer for!!! It seems to think that the state population is its cash cow, so willingly allows power suppliers to charge residents exorbitant amounts for electricity!!!!! 

Alain
Alain from NSW replied to Christine:

You voted for governments who sell the infrastructure to private operators, but still, you whinge! You are "dead meat" with the Libs and Nationals, please, believe me and some are experiencing their ultra-liberal ideologies (in Sth Austr, Vic...) or will soon (NSW) ... The ONLY way we will get cheap electricity is with The Greens and their "as much as possible renewables", but no one seem to be able to adapt to that change, a bit like when the first steam train at the beginning of last century, were so scary with their speed of 10 miles/hour ! My grand father told me they thought they would all die 'cause of those new fast machines !... We are too conservative in Australia, we only trust the Liberals or the Labor party, time for a change or you will pay for your electricity, your gas, your water, etc... and for what is not even quantifiable like your freedom, that of your kids, grand kids, etc... 

Barry
Barry from NSW replied to Alain:

Greens? But at what cost? All their proposals require a large subsidy from us, the taxpayers. 

Someone
Someone from NSW replied to Barry:

you must be joking! How much does the Budget of your obnoxious Libs costs the poorest (99% of us) in the land??? 

Barry
Barry from NSW commented:

Typical response from someone who can't accept the facts. Are you linked to Anonymous " loosely associated international network of activist and hacktivist entities." ? 

Alain
Alain from NSW replied to Barry:

Is it the following that worries you? Are you s*** scared 'cause you can't adapt to an ecological change, you are too old for this 'earth friendly' approach to anything? Care more about your own self than the rest of "'em" Cape Bridgewater wind farm: The Cape Bridgewater wind farm is the second stage of Pacific Hydro’s four-stage Portland Wind Energy Project (PWEP) in southwest Victoria. Completed in 2008, the 58MW Cape Bridgewater wind farm comprises 29 wind generators producing enough energy to meet the annual needs of 35,000 households, with an average electricity generation of 200GWh per year. Operations at Cape Bridgewater abate an estimated 195,000 tonnes of greenhouse gas emissions each year. During construction, the wind farm provided a significant boost to the local economy by creating many direct and indirect jobs for local contractors and also several permanent jobs once operations began. Re-vegetation programs around the wind farm site are helping to promote native flora with over 74,500m2 of land already direct seeded with pasture grasses and 3,000m2 with native grasses which in turn is helping to protect local biodiversity while improving the habitat for native fauna. 

Alain
Alain from NSW replied to Alain:

And unless you would be shareholder in a coal fired power station (!) why would you complain about such projects as the ones the rest of the planet is embrassing (China is at the forefront of the technology) deriving 50% of its power in some instances (Germany and some European countries) ? What is wrong with that other Vixtorian one (unless, again, you have a vested interest, shares, etc... in COAL..): Yambuk wind farm The Yambuk wind farm is the first stage of Pacific Hydro’s four-stage Portland Wind Energy Project (PWEP) in southwest Victoria. Located next to our Codrington wind farm, near Port Fairy, the site was chosen for its ideal wind conditions – it’s average annual wind speed of 30km/h is perfect for producing clean, non-polluting electricity. Completed in 2007, the 30MW Yambuk wind farm comprises 20 wind generators which produce enough energy to meet the annual needs of 35,000 homes per annum, with an average electricity generation of 100GWh per year. Its operations abate an estimated 100,000 tonnes of greenhouse gas emissions each year, the equivalent of 30,000 cars being taken off the roads. Valued at A$50 million, the Yambuk project directly injected A$20 million into the local economy and supported a building and maintenance crew of 60 people at the peak of its construction. When construction of the project commenced, it also marked the opening of a nearby blade factory by Danish wind turbine maker Vestas. Pacific Hydro’s Sustainable Communities Fund is providing support for local organisations working to make a positive difference in the community for the life of the project. Tourism in the region is now flourishing with the wind farm attracting about 50,000 visitors annually. Wind farm tours are available year-round. 

Alain
Alain from NSW replied to Alain:

or this other one: Codrington wind farm The Codrington wind farm was Pacific Hydro’s first wind development and Australia’s first commercial wind farm. Located near Port Fairy in southwest Victoria, the Codrington site was close to perfect with strong prevailing winds blowing off the Southern Ocean. When it was officially opened by the Victorian Premier Steve Bracks in July 2001 it was also the largest wind farm in Australia, with 14 turbines and an installed capacity of 18.2MW. The wind farm now generates enough electricity each year to supply the equivalent of 10,000 Victorian homes and each year avoids the emission of 49,000 tonnes of greenhouse gas emissions – the equivalent to taking more than 17,000 cars off the roads. More than A$9 million was injected into the regional economy during construction and development and over 30 jobs were created with local companies contracted to install roads, foundations, towers, transformers and cabling. Tourism in the region is now flourishing with the wind farm attracting about 50,000 visitors annually. Wind farm tours are available year-round. 

Alain
Alain from NSW replied to Alain:

Is THIS the problem: "Global renewable energy investors Acciona Energy and TerraForm Power are believed to be among the parties preparing to enter the contest to buy Pacific Hydro ahead of the sales process for the IFM-controlled global clean power provider that may fetch as much as $3 billion. It comes as IFM considers a breakup of the company to capitalise on strong interest from local superannuation funds for its Australian infrastructure assets as well as those from Europe. Pacific Hydro has 20 wind, hydro and geothermal power projects in Australia, Brazil and Chile and is up for sale through advisers Bank of America Merrill Lynch and Credit Suisse. Almost half of Pacific Hydro’s assets are said to be in South America, a region where power prices are soaring in some parts on the back of supply restraints. It is a market that is becoming increasingly attractive to Euro­pean funds, which find only limited opportunities in their own region and are unable to gain access to the US market." .../... The Australian May2015 

Alain
Alain from NSW replied to Alain:

The whole Aussie Farm is "for sale" !!! 

Alain
Alain from NSW replied to Barry:

THE FACTS? Here they are, "the facts": if all the Galilee Basin mines are developed to their maximum potential, 705 million tonnes of CO2 will be released each year - nearly double Australia's current annual emissions, but the prices of thermal coal having dropped in recent years - from a high of nearly $US142 per tonne in early 2011, to about $US62 now, some commodities analysts (and Dr Hewson, ex Libs leader) have estimated that if the prices did not pick up in the second half of 2015, this project of the biggest coal mine in the world should be abandoned. Numerous banks, including Barclays, Morgan Stanley and Goldman Sachs, three French banks, etc... have declared they would not finance that project. 

Barry
Barry from NSW replied to Alain:

My comment was that the taxpayer is paying to subsidise the 'green' power industry! At this time it is not self sufficient. Is this right? 

Alain
Alain from NSW replied to Barry:

Not only it is not self-sufficient, it is almost non existent... 

Warren
Warren from NSW replied to Barry:

100% right Barry. Windmills and the Union controlled Pacific Hydro (and others) have been sucking off the Labor/Green RET schemes for 6 years, some $25b allocated to date. This is a substantial component of our energy bills. Solar rebates also part of this cost. It's no wonder Pacific Hydro provided a loss this of approx. $0.6billion as Libs have slowed down the 'drip feed' to these unprofitable operations. 

shale
shale from QLD commented:

There is too much greed involved in almost everything .Power, fuel, food prices bank fees etc.It starts at the top of the chain,CEO's down.Exhorbitant salarys,bonuses and so on.When it gets to the bottom there's not a hell of a lot left for workers, pensioners alike.this all has to be paid for so increase prices and the Consumer pays for it all. Nothing will ever be as cheap (and it's not) as it is today so we have to suck it up and get on with it. Tony 

Ariel
Ariel from NSW commented:

Is redenergy really cheaper? form NSW 2428 - with essential energy now via click. I'm too dumb to understand cos all have different discounts and different jargon... 

Someone
Someone from NSW replied to Ariel:

You've better hire a lawyer if you want to understand the jargon in any contract these days... I promise you one thing: for as long as you pay what they want you to pay, you are -almost- safe... Another reason to keep UTILITIES, HEALTHCARE, EDUCATION in the hands of the country, the States, in OUR HANDS, you i***** ! VOTE for the GREENS, or continue getting being totally ABUSED... 

Doug
Doug from NSW commented:

Having paid excessive power supply prices since marrying in 1962 and seeing Union exploitation of their position of influence and power within the Labor Party over successive governments too timid to restrain demands for higher wages, benefits , privileged retirement agreements and an unbalanced labour force in terms of number of employees to cover for inefficient practices I believe that older consumers should enjoy respite from ever escalating prices. Those that will now be confronting the benefits of a rationalized system of pricing whether new- comers or our children, should be willing to embrace some concessions for the retired. 

Chris
Chris from NSW commented:

Guess there's no point in worrying about electricity prices, you can't control them and overall governments do what they want and we all accept there decisions with a small protest. 

Christopher
Christopher from QLD commented:

I live in Brisbane. This discussion doesn't really apply to me. Once again it looks like you are just another organisation that thinks the borders of NSW are the borders of the country 

diane
diane from NSW commented:

Wait till the cut back in jobs gone and are treated like Telstra. Then you might respect the electricity that is there and when it goes out you ring 24/7 for someone to come and fix even in the middle of the night. Live and ask someone who is employed in that industry and then you have the right to complain. 

John
John from NSW commented:

Solar power question in survey does not allow for renters who have no control over solar installation. 

Someone
Someone from NSW commented:

I really have no faith in governments and (so-called) price regulators... 

sheila and Tom
sheila and Tom from NSW commented:

Used not to worry about electricity bills but now ............ 

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