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Got an extra $244 for leccy next financial year?

By johnboy 5 April 2012 40

electricity

The Independent Competition and Regulatory Commission has made Zed Seselja’s day by announcing that the price on carbon is sending your power bills shooting up as of July 2012:

The Independent Competition and Regulatory Commission today released its draft report on retail prices for franchise electricity customers. The draft price direction in that report increases the price of electricity for franchise customers by 17.22% from 1 July 2012.

‘The rise in regulated retail tariffs is largely attributable to increases in the cost of wholesale electricity with a smaller contribution coming from network fees. It would appear that the increase in the cost of wholesale electricity is almost entirely attributable to the introduction of a price on carbon by the Australian Government,’ Senior Commissioner Gray said.

‘The Terms of Reference, received in September 2011, required the Commission to set a price direction for the period 1 July 2012 to 30 June 2014. Today the Commission is releasing a draft price direction for 2012-13 and foreshadowing that it will review the operation of the wholesale electricity market during 2012-13, once the price on carbon has taken effect, before preparing a price direction for 2013-14’ announced Senior Commissioner, Malcolm Gray.

The Commission estimates that under the new tariffs, electricity costs for a typical franchise customer will rise by around $244 a year, or around $4.70 a week. Preliminary analysis by the Commission suggests that about $3.65 a week of this is attributable to the introduction of a price on carbon.

The full report is also available.

UPDATE 05/04/12 13:05: Simon Corbell is trying to soften the blow pointing out that prices are still quite low in the ACT compared to other places.

“This proposed price increase is largely due to the impact of the carbon price on household bills, and it is important to note that the Commonwealth Government is providing monetary compensation to approximately 90% of household across Australia to deal with this cost of living pressure,” Mr Corbell said.

“Even after this price increase has been factored into a household bill, Canberrans are still forecast to have the
lowest electricity bills out of all states and territories, and remain, on average, around 32% below an equivalent household’s bill in New South Wales.

Meanwhile the Greens’ Shane Rattenbury is hedging his bets:

The ACT Greens today expressed concern at the proposed electricity price rises in the ACT, but noted they are well below compensation provided for in the carbon price package. The Greens also noted the 17% decrease in green energy costs.

“The Greens are concerned by these price increases, and that is why we have an alternative plan to bring in renewable energy and energy efficiency, so that we can ensure these price hikes brought on by the fossil fuel industry don’t keep happening in the future,” said Greens Energy spokesperson, Shane Rattenbury.

“It is worth noting that while the ICRC attributes a $3.65 per week increase in the price of electricity for the average household to the carbon price, the Clean Energy Future package provides $10.10 per week of compensation for the average household.

UPDATE 05/04/12 13:43: ActewAGL are weighing in on the conversation:

The ICRC’s draft decision projects an increase in the regulated price of electricity of 17.2 per cent from 1 July 2012. The ICRC’s preliminary analysis estimates that for a typical residential customer electricity costs will rise by around $4.70 a week.

ActewAGL General Manager Ayesha Razzaq said, “In this decision there is no increase in the retail margin to ActewAGL. The main reason for this price increase is due to the introduction of a price on carbon. In fact, of the 17.2 per cent increase, approximately 13 per cent, or $3.65 a week, is as a direct result of carbon. This is in line with the Federal Government’s forecast when the price on carbon was announced in July 2011.

“The other main contributor to the price increase is the ongoing need for investment in electricity infrastructure, including upgrading and expanding the electricity network as our city continues to grow.

“While we understand today’s draft pricing report, there are one or two aspects that we have concerns about. As such, ActewAGL will be raising some matters with the ICRC which will need to be considered,” Ms Razzaq said.

“We understand the cost of living pressure that Canberra residents are facing and our focus remains on assisting our customers to manage their energy costs.”

UPDATE 05/04/12 14:27: And here comes the Zed-bot ahead of schedule but otherwise highly predictable:

The Independent Competition and Regulatory Commission today revealed Canberrans will be slugged an extra $244 yearly for electricity, largely due to the Labor/Greens carbon tax, bringing the average Canberran’s bill to $1662.

“Katy Gallagher supports the carbon tax which has added this huge 17 per cent increase to Canberrans’ already stretched budgets,” ACT Opposition Leader Zed Seselja said today.

“Today’s hit comes her after government has already doubled rates in many suburbs, will add $225 to bills to pay for the solar feed-in tariff, and have tripled water bills, with more increases to come due to their inability to manage the Cotter Dam.

“If it weren’t for the Labor/Green’s massive carbon tax, Canberrans’ electricity bills would only have increased by $55. Instead, they’re being slugged with a $189 carbon tax component.

“The Canberra Liberals are very concerned about the Canberrans who will cop this massive cost of living hit from the Labor Government, and the businesses which are already doing it tough and will now be fleeced even further by the government.

“It’s clear that the policies of Labor and the Greens at both a federal and local level are placing massive cost burdens on Canberra families,” Mr Seselja concluded.

UPDATE 05/04/12 17:52: Member for Fraser Andrew Leigh has sent in his take on the household assistance to compensate the package:

Average weekly household spending will go up around $9.90, including $3.30 a week on the average electricity bill and $1.50 a week on the average gas bill. On average, households will receive $10.10 a week in assistance.

There are two ways that households will receive assistance: increases in pensions, allowances and family payments, and income tax cuts.

The assistance will mean:

— pensioners and self?funded retirees will get up to $338 extra per year if they are single and up to $510 per year for couples, combined

— families receiving Family Tax Benefit Part A will get up to an extra $110 per child

— eligible families will get up to an extra $69 in Family Tax Benefit Part B

— allowance recipients will get up to $218 extra per year for singles, $234 per year for single parents and $390 per year for couples combined

— taxpayers with annual income of under $80,000 will all get a tax cut, with most receiving at least $300 per year

These extra payments and tax cuts are permanent.


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40 Responses to
Got an extra $244 for leccy next financial year?
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HenryBG 6:42 pm 11 Apr 12

Mysteryman said :

dtc said :

Mysteryman said :

Poorly thought out policy costs the Australian public. Big surprise. This is what you get from voting for Wayne Swan and the muppets.

I love how Zed gets slagged for pointing out the obvious, but nobody slags the people actually responsible for this.

You do realize that the entire point of the carbon tax is to increase the cost of carbon producing items, including energy. Not sure how this becomes ‘poorly thought out policy’ when it’s doing exactly what it is meant to do.

This is why I said it’s poorly thought out.

http://www.smh.com.au/opinion/political-news/carbon-tax-is-unconstitutional-says-tax-expert-20120410-1wlqh.html

Well, if he’s a “tax expert” and he’s calling it a “carbon tax” then he’s clearly about as clever is Julia Gillard.

The word “tax” has a specific meaning, and our carbon price doesn’t actually fit that meaning, as any suburban accountant can tell you – let alone any genuine “tax expert”.

Currently, industries that produce large amounts of CO2 are externalising the cost of releasing that CO2, like dumping nuclear waste at sea, or dumping garbage over the vacant block next door.
A price has been applied to people dumping rubbish. It’s not unconstitutional.
A price will be applied to people dumping CO2. It’s not unconstitutional.

$244/year?
Isn’t that about 2 months’-worth of rubbish cable TV?
Or about 1 bland take-away coffee per week for the year?
Gee, how out-rage-ous…….

Mysteryman 5:01 pm 10 Apr 12

dtc said :

Mysteryman said :

Poorly thought out policy costs the Australian public. Big surprise. This is what you get from voting for Wayne Swan and the muppets.

I love how Zed gets slagged for pointing out the obvious, but nobody slags the people actually responsible for this.

You do realize that the entire point of the carbon tax is to increase the cost of carbon producing items, including energy. Not sure how this becomes ‘poorly thought out policy’ when it’s doing exactly what it is meant to do.

This is why I said it’s poorly thought out.

http://www.smh.com.au/opinion/political-news/carbon-tax-is-unconstitutional-says-tax-expert-20120410-1wlqh.html

vauxhall 9:11 pm 06 Apr 12

Diggety said :

vauxhall said :

Diggety said :

@ dvaey

This might help: http://www.euaa.com.au/wp-content/uploads/2012/04/FINAL-INTERNATIONAL-PRICE-COMPARISON-FOR-PUBLIC-RELEASE-19-MARCH-2012.pdf

That report is extremely inaccurate.

vauxhall, can you please elaborate on that claim?

I’ve looked at AEMC, BREE, ABARES and DRET’s. None of which directly seek to ascertain answers to questions EUAA ask.

Sorry, wrote the first message in a hurry so my point didn’t come across. The numbers they use aren’t necessarily inaccurate, they’re just extremely selective in the data they use to portray a particular scenario. Basically comparing apples with oranges.

Diggety 6:42 pm 06 Apr 12

Diggety said :

milkman said :

damien haas said :

244 dollars is about how much it costs me in firewood over winter.

firewood – the renewable energy resource!

I’m about to put a big fireplace in my house. Should be goooooood.

Have you already decided on which type? Considered one of these?

I know gasman was asking around to get a fuel buying group, no idea how that went though.

Whoops, first link didn’t work, here it is: http://en.wikipedia.org/wiki/Pellet_stove

Diggety 6:41 pm 06 Apr 12

milkman said :

damien haas said :

244 dollars is about how much it costs me in firewood over winter.

firewood – the renewable energy resource!

I’m about to put a big fireplace in my house. Should be goooooood.

Have you already decided on which type? Considered one of these?

I know gasman was asking around to get a fuel buying group, no idea how that went though.

Diggety 6:32 pm 06 Apr 12

vauxhall said :

Diggety said :

@ dvaey

This might help: http://www.euaa.com.au/wp-content/uploads/2012/04/FINAL-INTERNATIONAL-PRICE-COMPARISON-FOR-PUBLIC-RELEASE-19-MARCH-2012.pdf

That report is extremely inaccurate.

vauxhall, can you please elaborate on that claim?

I’ve looked at AEMC, BREE, ABARES and DRET’s. None of which directly seek to ascertain answers to questions EUAA ask.

milkman 6:19 pm 06 Apr 12

damien haas said :

244 dollars is about how much it costs me in firewood over winter.

firewood – the renewable energy resource!

I’m about to put a big fireplace in my house. Should be goooooood.

vauxhall 6:06 pm 06 Apr 12

Diggety said :

@ dvaey

This might help: http://www.euaa.com.au/wp-content/uploads/2012/04/FINAL-INTERNATIONAL-PRICE-COMPARISON-FOR-PUBLIC-RELEASE-19-MARCH-2012.pdf

That report is extremely inaccurate. Better off looking at AEMC or BREE figures.

dtc 5:07 pm 06 Apr 12

Mysteryman said :

Poorly thought out policy costs the Australian public. Big surprise. This is what you get from voting for Wayne Swan and the muppets.

I love how Zed gets slagged for pointing out the obvious, but nobody slags the people actually responsible for this.

You do realize that the entire point of the carbon tax is to increase the cost of carbon producing items, including energy. Not sure how this becomes ‘poorly thought out policy’ when it’s doing exactly what it is meant to do.

Johnno 12:59 pm 06 Apr 12

Zed-bot. That’s funny. I do have the extra $244. Just means $244 not being spent supporting Canberras slow melting retailers etc.

dvaey 10:15 am 06 Apr 12

Its all well and good to throw around numbers like ‘power will increase by 10%’ or ‘power will increase by $200’, but we dont pay fixed costs for electricity, so why not give us a proper breakdown?

Why not say the daily charge will increase to $x and the per kw charge will increase to $x? If the idea of this tax is to reduce consumption, then it should be applied 100% to the per kw charge, rather than trying to work out how to split the percentages to make the numbers look better for the press release.

They dont even define what an ‘average’ household is.. Is it a family with 2.3 kids? Is it a young couple with no kids? Is it a McMansion with 5 kids and a couple of extended family members staying?

planeguy 9:30 pm 05 Apr 12

So, have just gone back and looked at my utility bills over the years.

In the last 7 or so years, the prices for utilities appear to have increased by the following average annual rates:
– Electricity: Usage = +4%, Supply = +12%.
– Gas: Usage = +6%, Supply = +7%
– Water: Usage = +18%, Supply +10%

Now, assume that the 17% electricity rise is equally applied to usage and consumption charges, and the Electricty average figures will be: Usage = +5.5%, Supply = +12.5%.

Now, in the same period, inflation has averaged +3.0%, and the average wage growth (Adult Male Total Earning) = 4.8% .

So electricity has not massively blown out in previous years, but this will hurt a bit. The bigger story though is how much over inflation or wage growth have water (especially) and gas moved.

dpm 8:33 pm 05 Apr 12

Luckily, people who can afford solar panels will be less affected! Lucky buggers. Then again, those locked in to ~50c tariffs longterm will, at this rate, soon be losing money as the ‘retail price’ will be more than that! I think i’d rather be paid back the 1:1 ‘current’ (no pun intended) retail price (which would increase with price increases) for any excess electricity I put back into the grid!

I also assume that one day, once enough people have panels or take measures to use less power, ACTEW (like with people now using less water) will have to increase prices simply to keep revenue up. After all, that’s what its all about – money, not the environment! Basically, it doesn’t matter how good we are with water or electricity saving measures, we won’t ever be rewarded – our bills have to continually increase. Bit of a catch 22.

Anyway, I suppose another bonus for ACTEW is that some of the leccy increase can be used towards their dam blowout! Hahahaha!

Walker 7:55 pm 05 Apr 12

I mean look, if consumer can find a better option, all the better

Walker 7:54 pm 05 Apr 12

12 monkeys…

“Dr. Peters: I think, Dr. Railly, you have given your “alarmists” a bad name. Surely there is very real and very convincing data that the planet cannot survive the excesses of the human race: proliferation of atomic devices, uncontrolled breeding habits, the rape of the environment, the pollution of land, sea, and air. In this context, isn’t it obvious that “Chicken Little” represents the sane vision and that Homo Sapiens’ motto, “Let’s go shopping!” is the cry of the true lunatic?”

Sorry, just had to go there.

Where were we? Electricity, yeah… ahuh, tax that, sure… sure.

Jethro 7:43 pm 05 Apr 12

daddy said :

And by how much, in degrees Celsius, will this tax reduce the temperature of the globe?

I believe it’s more about preparing our economy for the inevitable shift to low carbon energy than somehow ‘saving the world’.

m_ratt 7:30 pm 05 Apr 12

The average household pays $1418/annum for electricity? Jesus!

My household pays <$600 (+ $500 for Gas for hotwater and stove), with 40% of that being the daily service fee to have a connection. That's with two fridge/freezers, regular use of clothes dryer, a couple of computers on almost constantly.

Even when we had electrical _everything_ our bill came in at under $950/annum.

Then again I have friends who have central aircon on 18deg all summer, and central heating on 21deg all winter, and pay $2500/annum on electricity……

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