Skip to content Skip to main navigation

News

Skilled legal advice with
accessible & personal attention

Energy price hikes to send thousands of Canberrans to the wall

By Glynis Quinlan 8 June 2017 27

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?


Please login to post your comments, or connect with
27 Responses to
Energy price hikes to send thousands of Canberrans to the wall
Filter
Showing only Website comments
Order
Newest to Oldest
Oldest to Newst
LocalUser 1:08 am 30 Jun 17

wildturkeycanoe said :

Sorry for the triple post, but I just realised I underestimated the daily usage charge and with next year’s increase to $1.092 per day connection fee, you will need nearly a 4kW system to break even just exporting 100% to the grid. Of course using power at home during the day will increase your savings but who is using 4kW of connected load during the day for anything? Our home’s usage is around 30kWh per day which averages to about 1.25kW or 1250watts of load continuously. I’m sure hot water and cooking accounts for most of this, which isn’t being used when the sun is shining. So, direct solar is not going to make any difference at all and a battery to store it is necessary to make any impact on the bill.

How many years till you break even though, add a lot more years too if you decide to add up-front battery storage costs to your final $$ costs (plus batterys don’t last forever).

It’s going to a be a long, long time till you’re in the black again.

wildturkeycanoe 10:33 am 24 Jun 17

Sorry for the triple post, but I just realised I underestimated the daily usage charge and with next year’s increase to $1.092 per day connection fee, you will need nearly a 4kW system to break even just exporting 100% to the grid. Of course using power at home during the day will increase your savings but who is using 4kW of connected load during the day for anything? Our home’s usage is around 30kWh per day which averages to about 1.25kW or 1250watts of load continuously. I’m sure hot water and cooking accounts for most of this, which isn’t being used when the sun is shining. So, direct solar is not going to make any difference at all and a battery to store it is necessary to make any impact on the bill.

wildturkeycanoe 9:59 am 24 Jun 17

The $240 per year for connection works out to be around $6000 over the 25 year lifetime of the system, without adding the annual increases. If you installed a battery system, you could avoid paying those fees altogether. Going off-grid is looking so much more appealing.
We have quite a large power consumption figure, for a family of 5 that is expected. We are using less than the average for that size household, only because of the heating requirements mainly [two split systems and an oil heater]. Solar boosted hot water helps but usually showers happen as the sun is going down so reheating happens on electricity instead of the power of the sun. This too can be avoided with a battery system to store that sunlight for when we use it.
contd…
With some power conservation efforts and hopefully some big money coming in soon, I intend to go completely off-grid in the coming year or so. They can take their overpriced power and sell it to the chumps that still believe coal is the way of the future. I know this is out of reach for most people and I have sympathy for you all, but I need to do something to future proof my home from the ACT government and their persistently growing taxes.

wildturkeycanoe 9:59 am 24 Jun 17

I have been looking at the possibility of installing solar on our house to avoid these huge price hikes. The biggest con is the connection fee and tariff on exporting. To export back to the grid, you need to be connected obviously. To be connected you must pay the connection fee, which is around $240 a year. For a solar system to export enough to pay for this fee, it needs to produce 8.6kWh a day at the current buy back rate of 7.5 cents per kilowatt hour. that means it must be just over 2kW in size. So putting a 2kW solar system on your house is doing nothing more than giving the electricity supplier power at third the cost they sell it, as well as covering the cost of being connected. You will make absolutely no money whatsoever and you’ve just spent thousands on a solar panel and associated equipment. Of course if you are using the solar during daylight hours, you are avoiding paying 16c/kWh, instead getting it for free, but still paying 2.7cents an hour to be connected to the grid during that time. So, in effect you are saving 13.3c/kWh. That is if you are using it during the day, which most people won’t because they are at work. What an absolute joke.

A Nonny Mouse 1:40 pm 23 Jun 17

chewy14 said :

…What exactly are you referring to with this mythical taxation on certain types of generation? There isn’t any which is actually part of the problem….

Indeed. The playing field is far from level. Since Abbott, a coal plant can dispose of its waste into the atmosphere at no cost to the operator but at a cost to the rest of us. A carbon price in one form or another would level things up appropriately. However, luckily, it seems the cost of renewables has got cheap enough now that nobody would invest in new coal, even with the playing field tipped in that direction.
If anyone is to blame for higher wholesale electricity prices (only part of the equation) it is the LNP who created uncertainty and ultimately reduced the renewable energy target they promised to leave alone. That created an investment strike. Nobody would maintain their fossil fuel plant because one day we might actually institute policies to address climate change. On the other hand nobody would invest in renewables because of the obvious antagonism of the LNP. So, a shortfall in generation and prices go up.
If the government wanted to do something useful they could put work into upgrading interconnections to have the capacity to take more renewables from distributed locations. Then there would be more investment in renewables, more generation in total, greater reliability from distributed sources. Another higher capacity interconnect with Tasmania and a lot more wind generation there would combine with hydro to give a surplus of dispatchable power to feed into Victoria.

chewy14 7:01 pm 21 Jun 17

tim_c said :

chewy14 said :

tim_c said :

The only reason gas prices have any relevance to electricity prices is because we’re switching off our reliable based-load generators and trying to rely on uneconomical and unreliable sources. This means that we need gas powered plants (which can be fired up relatively quickly) to supply base-load power to supplement (or substitute when the wind isn’t blowing at the right speed (ie. not too fast, not too slow), or the sun isn’t shining).

Who exactly is this “we” that is switching off baseless generators?

The vast majority of generation capacity has been privatised, so once again, not a government decision but rather a decision made by private companies because they can’t justify the investment upkeep of older plants (nor the building of new ones) due to the policy uncertainty I keep mentioning.

We, as in Australia.

They might be privately owned, but if they are now uneconomical it’s only because of an artificially unlevelled playing field – taxing certain types of electricity generation at exorbitant rates (so that they become unprofitable) just to fund subsidies to bring otherwise-uneconomical generation methods into profitability. It’s all a lot like trying to pick yourself up by your own bootstraps.

What exactly are you referring to with this mythical taxation on certain types of generation? There isn’t any which is actually part of the problem.

Whether you like it or not, the government has signed up to climate change related emissions targets yet haven’t actually specified how they’re going to be achieved.

Once again (and for the last time because this is boring), the reason why energy prices have risen so high is because of lack of policy direction causing private companies to not invest in generation capacity because of the risk caused by it.

Nothing to do with a tax that doesn’t exist.
Nothing to do with incentives for renewables.

It’s not hard to understand but perhaps it is sufficiently hard for easily led voters, which might be another issue….

John Moulis 5:11 pm 21 Jun 17

Maya123 said :

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.

I don’t know about today’s kids being mollycoddled more than previous generations. We were “mollycoddled” a bit too. When we moved to Canberra in 1970 we had an oil heater and electric blankets. When Mum was changing my brother’s sheets she noticed that part of the electric blanket was burnt where the wires went to the regulator. All the electric blankets were taken off the beds and thrown into the bin.

Related Articles

CBR Tweets

Sign up to our newsletter

Top
Copyright © 2018 Region Group Pty Ltd. All rights reserved.
the-riotact.com | aboutregional.com.au | b2bmagazine.com.au | thisiscanberra.com

Search across the site