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Energy price hikes to send thousands of Canberrans to the wall

By Glynis Quinlan - 8 June 2017 23

Energy price hikes

Massive increases in the cost of electricity and gas for Canberrans to come into effect next month are likely to push thousands of households that have just been coping into financial distress according to the ACT Council of Social Service.

ActewAGL price increases from July 1 will mean that the average Canberra household using both electricity and gas will have to fork out an extra $580 a year or $11.15 per week.

This comes on top of average rate hikes of seven per cent announced in Tuesday’s 2017-18 ACT Budget.

The increases are going to drive more people into financial distress and affect their ability to keep food on the table and to participate socially in their community, according to ACT Council of Social Service Director, Susan Helyar.

“We know that this will put the 28,000 households that are already in extreme financial distress further behind in meeting the gap between their income and their cost of living,” Ms Helyar said.

She said it would also be enough to push households which have just been coping into hardship, estimating that it would increase the number of Canberrans in financial distress to 40,000.

Ms Helyar said that people in this situation will have no choice but to cut back on the basics such as food, health care, keeping a car on the road and providing activities outside of school for their children.

ACT electricity prices will increase by 18.95 per cent from July 1, meaning an increase of $6.40 per week or $333 a year for the typical Canberra household.

ACT natural gas prices will increase by 17.3 per cent from July 1, meaning an increase of $4.75 per week or $247 a year for average Canberra homes.

ActewAGL CEO Michael Costello has acknowledged that the gas and electricity price rises are “unprecedented” and said they are the result of 10 years of uncertainty in national energy policy.

Mr Costello said that most of the 18.95 per cent increase in electricity prices has been caused by the doubling of wholesale price electricity prices over the past year.

“Like electricity, the wholesale gas price has approximately doubled in the past 12 months; in this case because Australia now exports about 10-times the amount of gas we use domestically, cutting local supply,” Mr Costello said.

“Again, this is the result of national policy not taking account of the impact on the local market of the massive gas export licences granted.”

Mr Costello said that ActewAGL understands the price rises may cause significant hardship and for this reason they have started a quarter of a million dollar Energy Support Fund to work with customers to help keep them “connected this winter”.

“Our main message to the community is if you’re struggling to make ends meet, don’t go without energy, please contact us as there are things we can do to help,” Mr Costello said.

“We’ve met with community groups that provide frontline services and are acting on their helpful advice and the ideas we discussed.

“We’ll be working with these groups to identify as early as possible people who may be struggling and to direct support where it’s needed most.”

The Energy Support Fund will be rolled out from 1 July, with initiatives to include:

  • energy vouchers for distribution through community groups who provide emergency relief services
  • a Solar Grants Program for eligible community organisations, helping to cut the energy bills of groups that provide vital community support
  • a dedicated Bill Help Hotline, providing ActewAGL customers with support options and information on rebates and concessions
  • strengthening the Staying Connected program and providing eligible customers with personalised support to help them get back on track with their bills

Ms Helya has welcomed the establishment of the fund and the proactive measures to keep people connected to energy.

How are you going to cope with energy price hikes? Will you have to miss out on any essentials? Do you think our standard of living is going backwards given that costs keep going up while wages have stayed the same?

What’s Your opinion?


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23 Responses to
Energy price hikes to send thousands of Canberrans to the wall
1
Lucy Baker 12:47 pm
08 Jun 17
#

I think I saw a “What’s in the budget for older Canberrans” list with just one item: reduced caravan registration fees. I don’t think that little slap in the face will go down well with the news that these “older Canberrans” on fixed incomes are being slugged 20% utility and 7% rates increases along with everyone else. It isn’t as though my elderly neighbour can shelf-pack at Woollies to earn a bit extra and cover these increases. I doubt whether she will be able to install solar any time, either.

2
Zultan 1:41 pm
08 Jun 17
#

As a younger Canberran, who doesn’t own a caravan, I also feel like I am being slapped in the face.

3
Glynis Quinlan 1:59 pm
08 Jun 17
#

Good points Lucy. This must be so tough on the elderly and healthwise they can hardly afford to go without heating.

4
dungfungus 2:58 pm
08 Jun 17
#

Lucy Baker said :

I think I saw a “What’s in the budget for older Canberrans” list with just one item: reduced caravan registration fees. I don’t think that little slap in the face will go down well with the news that these “older Canberrans” on fixed incomes are being slugged 20% utility and 7% rates increases along with everyone else. It isn’t as though my elderly neighbour can shelf-pack at Woollies to earn a bit extra and cover these increases. I doubt whether she will be able to install solar any time, either.

There are still a lot of Canberrans with solar systems that are getting a feed-in rate of 0.47c per Kw. Everyone one else is subsidising them.

5
dungfungus 3:01 pm
08 Jun 17
#

This price increase will flow through to everything else, especially supermarkets. Already, the price of some dairy foods requiring refrigeration has risen 15%.

There are some institutions that don’t pay for electricity now so they will not be affected.

6
Barron 8:06 pm
08 Jun 17
#

Right at a time when the Government has frozen rebates for rates, water and electricity for next year. This is a miserable and despicable decision by the government when every dollar will be important to pensioners and as far as I know there is no formula for rises in these now fixed rebates.
Its similar to what has been done with car registration. Pensioners still get free car registration but the government still collects $62.90 in supplementary charges from everyone that has to register a vehicle. These will rise sharpy each year but the government will portray themselves as Santa’s not Scrooges.

7
chewy14 11:16 pm
08 Jun 17
#

Barron said :

Right at a time when the Government has frozen rebates for rates, water and electricity for next year. This is a miserable and despicable decision by the government when every dollar will be important to pensioners and as far as I know there is no formula for rises in these now fixed rebates.
Its similar to what has been done with car registration. Pensioners still get free car registration but the government still collects $62.90 in supplementary charges from everyone that has to register a vehicle. These will rise sharpy each year but the government will portray themselves as Santa’s not Scrooges.

This isn’t a decision by the government, not caused by any of their decisions. It’s solely a reflection of the national energy market and the inability of the federal government to make coherent policy that would allow efficient investment in generation capacity.

8
tim_c 9:59 am
09 Jun 17
#

chewy14 said :

Barron said :

Right at a time when the Government has frozen rebates for rates, water and electricity for next year. This is a miserable and despicable decision by the government when every dollar will be important to pensioners and as far as I know there is no formula for rises in these now fixed rebates.
Its similar to what has been done with car registration. Pensioners still get free car registration but the government still collects $62.90 in supplementary charges from everyone that has to register a vehicle. These will rise sharpy each year but the government will portray themselves as Santa’s not Scrooges.

This isn’t a decision by the government, not caused by any of their decisions. It’s solely a reflection of the national energy market and the inability of the federal government to make coherent policy that would allow efficient investment in generation capacity.

More likely, it’s the result of decisions by governments at all levels to pursue electricity generation by more expensive (and less reliable) methods than we have historically been able to rely on.

Ultimately, all of those subsidies propping up uneconomical methods and the additional taxes burdening the methods that were previously economical have to be paid by someone. Businesses must recover increased costs, usually by increasing their charges, and this is eventually passed on all the way down the consumer (who has no one left to pass them on to).

9
chewy14 10:59 am
09 Jun 17
#

tim_c said :

chewy14 said :

Barron said :

Right at a time when the Government has frozen rebates for rates, water and electricity for next year. This is a miserable and despicable decision by the government when every dollar will be important to pensioners and as far as I know there is no formula for rises in these now fixed rebates.
Its similar to what has been done with car registration. Pensioners still get free car registration but the government still collects $62.90 in supplementary charges from everyone that has to register a vehicle. These will rise sharpy each year but the government will portray themselves as Santa’s not Scrooges.

This isn’t a decision by the government, not caused by any of their decisions. It’s solely a reflection of the national energy market and the inability of the federal government to make coherent policy that would allow efficient investment in generation capacity.

More likely, it’s the result of decisions by governments at all levels to pursue electricity generation by more expensive (and less reliable) methods than we have historically been able to rely on.

Ultimately, all of those subsidies propping up uneconomical methods and the additional taxes burdening the methods that were previously economical have to be paid by someone. Businesses must recover increased costs, usually by increasing their charges, and this is eventually passed on all the way down the consumer (who has no one left to pass them on to).

No, this is incorrect, it has almost nothing to do with subsidies or the choice of generation capacity, it is almost exclusively related to policy (or lack of) and poor management of the national electricity market.

We are charging overseas buyers less for our own gas than we can get it here due to the federal government not ensuring local supply is guaranteed and met first.

Lack of coherent policy has prevented companies from investing in electricity generation capacity, causing prices to skyrocket during peaks.

If they actually had a price in place for carbon, or an energy intensity scheme, the investment risk would be lowered considerably.

10
dungfungus 12:32 pm
09 Jun 17
#

And now this:
https://www.mortgagebusiness.com.au/breaking-news/11181-anz-hikes-rates-by-30-basis-points?utm_source=MB&utm_campaign=MBNewsflash09_06_2017&utm_medium=email

No doubt, all other lenders will follow while the government and the RBA will keep denying anything is wrong.

11
A Nonny Mouse 5:56 pm
15 Jun 17
#

chewy14 said :

…it is almost exclusively related to policy (or lack of) and poor management of the national electricity market.

We are charging overseas buyers less for our own gas than we can get it here due to the federal government not ensuring local supply is guaranteed and met first.

Lack of coherent policy has prevented companies from investing in electricity generation capacity, causing prices to skyrocket during peaks.

If they actually had a price in place for carbon, or an energy intensity scheme, the investment risk would be lowered considerably.

Agreed and remember the ACT still has the cheapest electricity in the country.

12
A Nonny Mouse 6:11 pm
15 Jun 17
#

Taking out the line for the gross solar feed-in tariff our bill in total for a year would about $970 without solar PV. This is for a household with three adults. My bill says we are using about a third of an average 3-person household and less than a one person household. We got solar hot water years ago and have gas heating and we considered energy efficiency when choosing appliances but we are not spartan. We have all the usual stuff – TV, fridge, toaster, washing machine, stereo, electric blankets, lights etc. I wonder how these other households are managing to use so much electricity.
Even if the electricity to run our electric cars was included (on a separate bill – long story, another time) we would still be using less than the ‘average’.
I have even done the sums to work out what would be added if we did the same amount of heating with plain electric resistance heaters (and a cooktop) as we do with gas. Still we would be below average for a three person household.
There must be a lot of basic cheap simple obvious energy efficiency things people are not doing.

13
dungfungus 10:36 pm
15 Jun 17
#

A Nonny Mouse said :

Taking out the line for the gross solar feed-in tariff our bill in total for a year would about $970 without solar PV. This is for a household with three adults. My bill says we are using about a third of an average 3-person household and less than a one person household. We got solar hot water years ago and have gas heating and we considered energy efficiency when choosing appliances but we are not spartan. We have all the usual stuff – TV, fridge, toaster, washing machine, stereo, electric blankets, lights etc. I wonder how these other households are managing to use so much electricity.
Even if the electricity to run our electric cars was included (on a separate bill – long story, another time) we would still be using less than the ‘average’.
I have even done the sums to work out what would be added if we did the same amount of heating with plain electric resistance heaters (and a cooktop) as we do with gas. Still we would be below average for a three person household.
There must be a lot of basic cheap simple obvious energy efficiency things people are not doing.

Putting in LED lighting makes a huge difference.

14
wildturkeycanoe 9:52 am
16 Jun 17
#

A Nonny Mouse said :

There must be a lot of basic cheap simple obvious energy efficiency things people are not doing.

Perhaps things like not having children [who are great at leaving lights and heaters on], eating out regularly to avoid using cooking energy, buying modern energy efficient homes [because they either rent or can’t finance a new mortgage in a newer house]. To make the kind of savings needed to offset these increases, people would have to spend considerably more than what they’d save. It doesn’t make financial sense.
Another issue is this. As people use less power, the load on the grid reduces. That means less revenue while running costs are still much the same. So by forcing us to use less, the suppliers are left with a hole in their wallet which is easiest to fill by charging us more again. It is a cascading failure that will price the coal power industry out of the market, assisted by home solar PV setups.
In our own situation, another $1000 quarterly bill has put the budget into stress at a time when there is no way to increase income or reduce consumption. It is winter after all and being cold only invites health issues to arise, that further hit the budget bottom line. You can’t pay bills if you are home sick with the flu from constantly freezing your butt off.

15
Maya123 11:52 am
16 Jun 17
#

wildturkeycanoe said :

A Nonny Mouse said :

There must be a lot of basic cheap simple obvious energy efficiency things people are not doing.

Perhaps things like not having children [who are great at leaving lights and heaters on], eating out regularly to avoid using cooking energy, buying modern energy efficient homes [because they either rent or can’t finance a new mortgage in a newer house]. To make the kind of savings needed to offset these increases, people would have to spend considerably more than what they’d save. It doesn’t make financial sense.
Another issue is this. As people use less power, the load on the grid reduces. That means less revenue while running costs are still much the same. So by forcing us to use less, the suppliers are left with a hole in their wallet which is easiest to fill by charging us more again. It is a cascading failure that will price the coal power industry out of the market, assisted by home solar PV setups.
In our own situation, another $1000 quarterly bill has put the budget into stress at a time when there is no way to increase income or reduce consumption. It is winter after all and being cold only invites health issues to arise, that further hit the budget bottom line. You can’t pay bills if you are home sick with the flu from constantly freezing your butt off.

This illustrates how attitudes have changed. As a child, (in my case, illustrating the coldest house, it was an uninsulated fibro house in Cooma), one room was heated only, although we had hot water bottles to take to bed. We didn’t get more colds than children do today. But today children are considered weaker little things and need mollycoddling, so hence $1000 quarter bills are considered ‘normal’ by some. Or perhaps families could share one heated room; usually the lounge room, as was done by past generations. Why are today’s families so special they need to heat the whole house?
In my first house as an adult, also an (almost) uninsulated fibro house, commonly only the small living area (one room) was heated to about 15C. We used blankets across our laps when watching TV and wore jumpers. Three people shared this, while the bedrooms were rarely heated. But we had electric blankets/hot water bottles, adequate bed covers and I wore bed socks and a woolly hat to bed. None of us got sick more because of this living arrangement.

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