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So why are Greenchoice customers paying a carbon tax?

By johnboy 10 August 2012 71

The SMH has an intriguing story on complaints to the Australian Competition and Consumer Commission by Canberra Greenchoice customers who are being hit with a carbon tax despite paying through the nose for years for supposedly carbon free electricity:

ActewAGL retail general manager Ayesha Razzaq said the utility was aware the ACCC was watching companies and “we are certain that we are not misrepresenting the impact of the carbon pricing to our customers”.

“ActewAGL understands that this is confusing for many customers and paying the carbon price for a green energy product goes against the grain of common sense. But this isn’t a straight forward matter, and ActewAGL certainly does not benefit from this scheme,” she said.

“In a nutshell, green power is a voluntary government-accredited program that enables customers to purchase renewable energy for their homes, when they actually make that voluntary purchase of green power, they are supporting the product of electricity from renewable sources over and above mandatory government targets that are set by the government. So you cannot separate the electrons; the energy doesn’t directly feed into your home, it is added into the electricity grid … on the customer’s behalf.”


UPDATE 10/08/12 14:51: Thanks to Erg0 for pointing out that the ActewAGL website is still claiming they’re buying carbon free electricity to balance the use of their Greenchoice customers:

greenchoice

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71 Responses to
So why are Greenchoice customers paying a carbon tax?
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HiddenDragon 1:21 pm 22 Aug 12

The glossy-as-ever ActewAGL ‘Essentials’ mini-mag which arrived with the bills today, reports that “The final section of the pipeline for the Murrumbidgee to Googong Water Transfer has been laid and all major construction work is nearing compleation (sic)”. This will doubtless be of great interest to all our local anglers, compleat and otherwise.

Deref 5:44 pm 15 Aug 12

devils_advocate said :

It’s surprising and scary how many people think that, by signing up to greenchoice or whatever, the electricity that comes out of their socket is actually different. It’s ridiculous.

It’s surprising how many people – wait – I suspect there’s only one – who don’t understand the principle that when you pay the extra premium, they buy “green” power on your behalf and charge you accordingly.

How stupid would you have to be to imagine that anyone thinks you’re getting different electrons?

Jethro 4:50 pm 15 Aug 12

chewy14 said :

But that’s the whole point. You aren’t paying for Green Energy to be delivered to your house. You are paying a premium for them to purchase some Green energy elsewhere above what is mandated, which should help the renewable energy industry. The electricity you’re personally using will not be Green and so gets the Carbon tax.
Is there anywhere in your contract where they say that you have the rights to that purchased Green energy? If not, then I don’t know how people could complain? Perhaps ACTEWAGL need to make sure people understand what they’re purchasing better.

But isn’t the ‘whole point’ of the carbon tax to level the playing field and make greener options more competitive? If ACTEW chose not to pass on the tax costs to Greenchoice customers the price difference between renewable energy and carbon-based energy would be reduced, more people would sign up to Greenchoice and the amount of renewable energy entering the grid would increase.

If electricity companies choose to spread the costs they incur from the carbon tax across all their customers they are taking away the financial motivation to convert to green energy options that the carbon tax was supposed to create.

As we have already seen on this thread, many Greenchoice customers are cancelling this option. Others who thought about switching to Greenchoice in response to the carbon tax have decided not to. IT seems as though this decision by ACTEW may actually lead to less renewable energy being purchased for the ACT grid.

It is entirely up to ACTEW which customers they pass the carbon tax costs on to. It is inequitable to pass it on the very customers who are paying extra to reduce ACTEW’s carbon tax bill, and it goes against the very reasoning behind the carbon tax legislation.

davo101 4:28 pm 15 Aug 12

chewy14 said :

You are paying a premium for them to purchase some Green energy elsewhere above what is mandated, which should help the renewable energy industry.

Yes, by why did the premium stay exactly the same despite the introduction of a carbon price? Green power used to be 7.5c more expensive than regular but it’s now 9.6c. More importantly why is ACTEW’s green power so expensive? Origin charges a 3c premium, TRUenergy 4c, and Energy Australia 5.5c.

chewy14 4:09 pm 15 Aug 12

davo101 said :

chewy14 said :

I really am struggling to see what the problem with this is other than people not reading what the contracts that they’ve actually signed up for.

The problem is simple maths. On the 1st July 1 kWh of non-green electricity went up 3.025c (on my plan) while at the same time 1 kWh of green power went up by 3.025c. The non-green power now includes a 2.1c carbon tax component so why did green power go up by exactly the same amount down to the thousandth of a cent? Some might say coincidence, I would suggest gouging.

But that’s the whole point. You aren’t paying for Green Energy to be delivered to your house. You are paying a premium for them to purchase some Green energy elsewhere above what is mandated, which should help the renewable energy industry. The electricity you’re personally using will not be Green and so gets the Carbon tax.
Is there anywhere in your contract where they say that you have the rights to that purchased Green energy? If not, then I don’t know how people could complain? Perhaps ACTEWAGL need to make sure people understand what they’re purchasing better.

Jethro 4:01 pm 15 Aug 12

devils_advocate said :

It’s surprising and scary how many people think that, by signing up to greenchoice or whatever, the electricity that comes out of their socket is actually different. It’s ridiculous.

Please point to where anyone has said this. People are aware that they aren’t literally getting the energy from a windmill. However, by purchasing the greenchoice option they are ensuring that the percentage of ACTEW’s energy they use is mirrored by a corresponding increase in ACTEW’s use of renewable energy, therefore reducing ACTEW’s carbon footprint by that same amount.

If no-one was using Greenchoice, ACTEW would be receiving a higher carbon tax bill. The reduction in tax they receive should be enjoyed by the people who paid the extra amount to reduce that tax bill.

davo101 3:51 pm 15 Aug 12

chewy14 said :

I really am struggling to see what the problem with this is other than people not reading what the contracts that they’ve actually signed up for.

The problem is simple maths. On the 1st July 1 kWh of non-green electricity went up 3.025c (on my plan) while at the same time 1 kWh of green power went up by 3.025c. The non-green power now includes a 2.1c carbon tax component so why did green power go up by exactly the same amount down to the thousandth of a cent? Some might say coincidence, I would suggest gouging.

Grail 12:42 pm 15 Aug 12

If you buy Greenchoice, you are paying ACTEW to source non-carbon-polluting power. Thus ACTEW saves paying carbon tax on that portion of their total energy bill.

So why are Greenchoice customers paying carbon price on all their electricity, when they have helped ACTEW reduce their tax burden?

Prorating the savings would be the least they could do. Reducing carbon price charged to Greenchoice customers based on the total Greenchoice “take” would be equitable, don’t you think? I am sure ACTEW doesn’t want Greenchoice to be seen as a scam covering Mr Costello’s enormous salary and perks.

chewy14 11:32 am 15 Aug 12

devils_advocate said :

It’s surprising and scary how many people think that, by signing up to greenchoice or whatever, the electricity that comes out of their socket is actually different. It’s ridiculous.

But still, charging the carbon tax on it is even more ridiculous. If you are notionally paying for renewable energy generation, then you should be entitled to consume that notional amount without paying carbon tax, even acknowledging that the electrical charge itself is fungible.

Scammers.

I don’t get this. I simply thought that Greenchoice meant that they would purchase an amount of green energy above what they were mandated to. Not that you had any rights or entitlements with relation to that energy.

Seeing as the energy coming out of your socket in Canberra is obviously not green energy, you have to pay the Carbon tax on it. I really am struggling to see what the problem with this is other than people not reading what the contracts that they’ve actually signed up for.

devils_advocate 11:22 am 15 Aug 12

Deref said :

I heard the CEO of ACTEW on the radio the other day defending this. I’m an old far and I’ve heard a lot of obfuscation in my day, but this bloke is a master. He sounded as if he was barely controlling his anger at the temerity of us idiots to dare suggest that there was anything untoward about this. When asked direct questions about it he dodged and weaved as well as any politician I’ve ever heard.

I tried to call ACTEW to cancel my greenchoice option but, because it’s part of my bundle, they had to put me through to a different section. After waiting 20 minutes, constantly being told how important my call was, I gave up. I filled in their online form this morning.

It’s surprising and scary how many people think that, by signing up to greenchoice or whatever, the electricity that comes out of their socket is actually different. It’s ridiculous.

But still, charging the carbon tax on it is even more ridiculous. If you are notionally paying for renewable energy generation, then you should be entitled to consume that notional amount without paying carbon tax, even acknowledging that the electrical charge itself is fungible.

Scammers.

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