Sunday, June 16, 2013

Queensland electricity prices to soar by 22%, who's to blame?

Many of you will have heard that electricity prices in QLD are skyrocketing by 22% this year. For the average household this is predicted to increase bills by $268 a year, while "the average electricity bill for a family of four will increase by $343 a year".
But why? 

If you listen to Campbell Newman or the energy minister Mark McArdle you might be forgiven for thinking that this increase was due to carbon pricing or renewable energy. With McArdle complaining that "Ninety-two thousand homes don't pay any power bills at all in Queensland" - well yes Mark, that's because they produce their own electricity. 

However with the help of this article and Queensland Competition Authority price determination I've made this little graph of where the price rises are coming from:

As you can see, less than 20% of price rises are due to carbon pricing or paying people for the solar power they produce. Much greater is the price rise due to the end of the Newman government's electricity tarrif freeze, which only lasted for 12 months. This policy might have sounded great during the last state election, but there's no free lunches in this world, and we are paying for it now.

"Other*" is the biggest category, breaking this down is hard, but it includes increased network prices (ie: the poles and wires), increases in the costs of generating power and then some mind-blowing stuff like electricity companies being allowed to increase prices because power demand has been dropping and they have been making less money than they want to.

So it seems that the government is very concerned about the 20% of the price rises due to polluters no longer being able to pollute for free and for actually having to pay households who are producing clean energy from their solar panels. Instead they seem rather unconcerned (or want to shift our attention from) what is actually causing 80% of the price rises. This is like the captain of the titanic blaming the water on drinks that were spilled when the ship hit the iceberg rather than the gaping hole in the ship.

From all this I draw two conclusions:

1. All that kerfuffle from certain politicians that the (basically one off) 9% rise in power prices from the carbon price was going to ruin us all was self serving nonsense. A year later we are facing over double that rise for different reasons and the idea this will ruin us all has been conveniently forgotten.

2. We as a community are going to have to start demanding explanations for what's causing 80% of our power prices rises and then demand useful ideas for what to do about it, or we'll continue to see politicians scapegoating renewable energy and a continuation of massive price rises.

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