The tricky business of electricity tariffs

By Keith Orchison

The overall electricity scene is a huge, tangled web of issues that fly over the heads of most Australians: stranded generation and network kit in an environment of sliding demand reacting to soaring prices; the RET wrangle; the solar set’s fight to retain what subsidies have given them; privatisation pros and cons; the costs and benefits of abatement programs (the central theme of the Warburton panel report); and a lot more.

When Anna Bligh’s Labor government wanted to make political waves with a big, generous solar power promotional scheme, the answer to ‘who pays? ’ was simple: smear the “solar bonus” bills across all Queensland consumers who don’t take up PVs.

In the current RET row, boosters are very eager to play the line that the cost of supporting wind and solar power represents a really small burden on households (about 4 per cent of the annual cost), while not engaging with the fact that the weight falls more heavily on miners and manufacturers — who are big polluters or key employers depending on your ideological bent -and especially so on those who are competing in global marketplaces.

Behind this lies the rule-makers’ belief that, if the network tariff system (which is 50 per cent of end-user bills) can be rejigged so that prices reflect how much it costs to use appliances at various times, consumers will make ‘more informed’ decisions about consumption.

This eventually left the West Australian taxpayers to bear a multi-billion dollar burden and the Coalition Barnett government to wear the political odium of shoving power bills up 80 per cent in the past five years.

In Queensland, for example, politics dictate that the government-owned businesses collectively need to deliver at least $600 million a year in dividends to enable consumers in the state’s huge rural and regional areas to pay no more for power than those in the populous south-east corner.

Read more here: Business Spectator

    

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