You may have recently received an envelope from Energy Australia stating in bold writing, “This isn’t a bill”. If you had opened it, which most people probably didn’t, you would have read that it was a letter informing you of a decreased price on your electricity per unit as a result of the repealed Carbon Tax. Not less than a month ago you will have received another letter informing you of a mistake in the previous letter sent at the end of June.
Within the last 3 months, account holders will have received at least five different letters (costing $7.7 million in postage). This is only one small example of the inefficiencies rampant throughout the electricity sector, and part of the cultural shift the industry will need to make from a state owned sector to a privately owned sector.
Electricity connectivity might seem as confusing as a bunch of tangled chords, as it works through a mix of private and public operators. State-owned distribution networks Ausgrid, Endeavour Energy and Essential transmit electricity generated from a variety of sources through similarly state-owned “poles and wires” so then retailers (like AGL, Energy Australia and Origin Energy) can pick it up and package it for us to use.
Greater privatisation of the sector has been recommended by the Productivity Commission as a way of improving efficiencies, increasing competition and reducing prices. The sale of NSW state owned Energy Australia to Hong Kong based CLP holdings in 2012 for $2.2 billion one step towards privatisation.
The Baird government is planning more. The proposal to lease 49% of its “poles and wires” to the value of $10 billion will be put on the table after the 2015 election. The proceeds will be used to fund roads, transport and other infrastructure.
Since 2009, electricity networks have spent $45 billion, not million, on upgrading our “deteriorating” networks. The fact is, demand for electricity is actually falling.
The networks had exaggerated their claims and produced inaccurate data to back-up the higher spending. Under recent pressure the networks have cancelled $400 million dollars worth of projects because it was proven their claims were false.
With the CSIRO predicting a one third of the Inner West will be off the grid within 20 years, it makes sense for the “poles and wires” be sold when they still hold some value, and the deregulation of the market might be the only way to reform our energy addiction.
The repeal of the carbon tax will mean a 9% reduction, but no doubt the network companies will think of a way to eat that back up. So don’t bother opening up the letter.
• Words: Cindy Mullen