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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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Leone
Leone from NSW commented:

The best thing we ever did was install solar hot water. Even in four day power failure we still had hot water. 

Wendy
Wendy from NSW commented:

Enjoying burning the wood from the latest storm in our fireplace. Wonderful heat and such a luxury! 

Debra
Debra from SA commented:

The problem is we are held to ransom, we have to have electricity we have to pay or get cut off. You can organise a payment plan but even that is at a cost. 

IAN
IAN from NSW commented:

SUCCESSIVE STATE GOVERNMENTS HAVE USED THE PROFITS FROM POWER STATIONS AND NOT BUILT ANY NEW INFOASTRUCTURE. I HAVE BEEN IN MY PRESENT JOB FOR 30 YEARS AND THE ONLY KNOWN UPGRADE IS THE ILLAWARRA GAS TURBINES. I LIKE MANY OTHERS SUBSIDISED THE FIRST WAVE OF HOUSING SOLA PANELS WITH GOVERNMENT REBATES. IF SEEMS DODGY IT PROBABLY IS. 

Someone
Someone from NSW commented:

And here is what a friend just wrote to me when I mentioned the "energy rip-off" in Australia: "None of our politicians have ever discussed long-term energy security and pricing affordability, ever. They are all one-trick ponies without a care for how their policies affect Australians. At the end of the day the politics of both sides have the same outcome for Australians - persistently less value at significant and ongoing cost increases to consumers. That's the Australian way of doing business. Sell everything at bargain basement prices to overseas clients and price-gouge your own people, that is considered good economic policy." 

Someone
Someone from NSW commented:

But Warren will tell you it's the fault of Unions, the fascist! 

Someone
Someone from NSW commented:

Australian households are paying far more than people in comparable countries in electricity network charges, with huge discrepancies across different states, a new report has found. Electricity network service providers in Queensland have the highest charges in Australia, while Victoria is the lowest cost jurisdiction in the National Energy Market. The new report, commissioned by Uniting Care Australia, shows the highest network charges in Australia's National Energy Market are four times more than the lowest charges, and double the highest prices charged in Britain. It also shows that Australia's network service providers are increasing their fixed charges more quickly than their variable charges, while there is a big discrepancy in the level of fixed charges across the country - ranging from zero to more than $500 a year for an average household. 

Roy
Roy from NSW commented:

The AER has made very poor decisions in the past by allowing huge network price increases. These price rises were allowed when the network maximum demand was decreasing which should have resulted in minimal, if any, annual price increases. Network prices should now decrease as unnecessary network upgrades should now be completed resulting in lower network losses. 

Warren
Warren from NSW replied to Roy:

A breath of fresh air in the debate at last. 100% right in your statement Roy. There are many other problems with inflated wages, Union influence. If it get too hard to transition the existing 'structures', best sell it and start again - like Telstra all over again. 

Someone
Someone from NSW replied to Warren:

The Australian Energy Regulator (AER) has fixed a five-year pricing determination, same with the number of jobs the Reverend negotiated with Baird, the guarantee is only for FIVE years, what happen after the FIVE years, I let you imagine... With your "union influence" , you are the clown from the far right of politics you have been throughout this thread (and others), now, please tell me: what is the union influence in an increase of ten fold the current CPI of your Health Insurance Premium? Or is it simply "greed", purely protection of the massive wages the management of those electricity networks & insurance companies pay themselves (see link) dictating their moves? 

Someone
Someone from NSW commented:

Here is the reminder of why we pay so much for our electricity, and you will realize that the Unions have very little to do in the "rip-off scheme": (Data sources: Annual reports, IBISWorld) Executive pay: Networks NSW $4.4 m Vic Power Networks $8.0 m Employees NSW 12,745 Annual Revenue: Networks NSW $6.9 bn Vic Power Networks $1.43 bn Employees Vic 2,012 The senior management salary bill would be expected to grow from its current $4.4 million a year to something much greater than the Victorian company's $8 million, given the much larger revenues and employee numbers. If the salaries matched their Victorian counter-parts in proportion to the revenue of the companies, the remuneration of ten senior executives would grow to $39 million a year, a nine-fold growth. However, it is likely that salaries would only increase in the first instance a factor of two or three. 

Someone
Someone from NSW commented:

We are being fleeced by Power Companies (and it's even worth with gas since McFarlane was negligent and did not put aside reserves for our domestic consumption, forcing us to pay "export" prices for our gas) please, understand it, a lot of business is taken away from them but the government in cohut with those power monopolies make sure they still find a way to make a buck, when we should all get our electricity from RENEWABLE SOURCES, you dummies! 

Someone
Someone from NSW commented:

Yes, your budget for gas is now going to have to increase dramatically, thanks to Ian Macfarlane who refuses to put a domestic reserve aside for our domestic use (selling all we possess at inflated prices to the rest of the world) and insists on having our farmers (in NSW, in particular) go the American way, he wants them to sacrifice their land and water tables to extract the gas underneath by the dangerous methods as now revealed in the USA, fracking the rock, etc... . This government wants you to pay the same price as the price the North Asia region is going to pay for their unlimited and guaranteed supply of our gas. You wanted the Libs, you have got them and they are going to make you pay, they will make sure that the big end of town gets richer and the rest of you (a very very large majority) gets a lot lot poorer. 

Roy
Roy from NSW commented:

It has been known for years that NSW's natural gas supply from SA would dwindle to nothing. It was planned that a pipeline would be built between NSW and Qld to provide a reliable NG supply to NSW. Qld has sold out to a higher bidder leaving NSW to likely seek basin NG from NT. Australia needs to allocate reserves for its own use before exports. Once we had the 3rd cheapest energy supplies in the world, providing jobs and value adding to our exports. Now we just export iron ore, coal and NG. What an opportunity missed. 

Someone
Someone from NSW replied to Roy:

So true! Incompetent Abbott's minister McFarlane was already to blame in 2013 ... The Greens were seriously worried, then, but now that he has not put aside any reservations, neither for the country nor for NSW, WE WILL SOON BE IN VERY BIG TROUBLE, IN NSW! You voted for the COALITION, you have now got them and you WILL PAY A HEFTY PRICE FOR IT! In 2013, already: http://jeremybuckingham.org/?s=reservation 

Alain
Alain from NSW commented:

-@Anon- There are currently so many disturbing events initiated by the Abbott government it’s difficult to triage, however, surely one of the more alarming is the decision to imprison for up to two years doctors, nurses and teachers who disclose adverse conditions at asylum seeker detention centres on Manus and Nauru. The NEW Australia (as seen on the board of the Anglican Church, Gosford, NSW): "55 million dollars to send 4 refugees to Cambodia" Which "Budget emergency" ??? Could even be our next best professor of medicine they sent to Cambodia as recently proven with Prof. Munjed Al Muderis, the idiots!!! ... and, nevertheless, an analysis of aggregated polling data over the past 12 months indicates that the government has recorded incremental improvements in its standing since the leadership spill in February! Are you serious? 

Someone
Someone from NSW commented:

From the "TASMANIANTIMES.COM": To answer our question: yes, the Abbott Government at least has strong fascist tendencies. That is what hard line neoliberalism does. It is itself a form of neofascism. The good news for us Australians, as John Oliver’s little doco points out, is that Abbott and his mates are being so kack-handed about it they’ll self-destruct, to peals of international laughter. 

Someone
Someone from NSW commented:

Since the accusation is quite grave (notwithstanding its truthfulness) here is the rationale behind it (one only of several "rationales"...) : http://www.tasmaniantimes.com/index.php/article/is-the-abbott-government-fascist 

Someone
Someone from NSW commented:

Some who are "hijacking" our lives and those of our dogs and our stock with 'it' are the incompetent and nasty Libs and Nationals: did you read in your paper today the state of disaster the Walgett/Bourke region is in ? Here it is: http://www.smh.com.au/nsw/drought-takes-toll-as-farmers-sell-much-loved-working-dogs-20150607-ghi4gt.html 

Someone
Someone from NSW commented:

and they want to PROTECT US, the Libs, the Nationals! They have sealed the borders! They are sending "refugees" away with NO RETURN ticket! Thay are building JAILS! They are purchasing (with a LOT OF YOUR MONEY...) billions and billions worth of war planes, submarines (ALL lemon of war machines, already! A waste of YOUR money!) BUT... they will our farmers, their dogs and stock, YES, die 'cause a four year drought which THEY CANNOT ADMIT IS ANOTHER BY-PRODUCT OF THEIR COAL BURNING POWER STATIONS, IS DIRECTLY RELATED TO... "CLIMATE CHANGE": two words "CLIMATE CHANGE" and "DROUGHT" NOT IN THEIR VOCABULARY, the fascists running the show at the moment in Australia ! 

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