This matter has NOTHING TO DO with any ( ... so called) carbon "tax" - which will flow on as an estimated, one off, 4% loading
The MASSIVE increases Gillard refers to DIDN'T begin in July, 2012
They have been GOING ON FOR A DECADE
The electricity industry suffers the conundrum of the lawyer - the more work it creates, the more it gets paid.
Even with the best of intentions, it is a daunting temptation for them to prolong the workload, just to keep the financial returns ticking over.
Coal prices, the carbon tax and the need for network upgrades are all minor villains in the piece being played out now in the public sphere. The chief culprit in the unfolding drama of Australia's spiralling power bills is a fatal flaw in the industry's structure.That is, the power companies earn a regulated return on their asset base. Their revenue is calculated based on the value of their poles and wires. So the more money they spend, the more money they make. And the more money they make, the higher their dividend to state governments.
So when the Prime Minister, Julia Gillard, muscled her Minister for Energy and Resources, Martin Ferguson, out of the running to deliver a keynote address to the Energy Policy Institute at lunchtime yesterday, she knew she was on to a sure thing.
The blame for rising prices is apportioned quite unequivocally by the Independent Pricing and Regulatory Tribunal, even down to the last percentage point. Rising transmission and distribution costs are the chief culprits. And the chief beneficiaries of the big spending on network upgrades - the poles and the wires - are the power companies and the states.
A line item in the last NSW budget showed a rise of $250 million in dividends from the state's electricity transmission and distribution businesses. This 41 per cent increase in payments to Macquarie Street - up from $639 million to $901 million in only a year - comes at a time when power bills are poised to rise another 18 per cent.
Blaming the states though - like
blaming the carbon tax - is too simplistic and political a ploy. This is the National Electricity Market after all, presided over by the Australian Energy Regulator. It is easy to argue that the states, or, in Victoria's case, the shareholders of the transmission and distribution companies, benefit from ''gold-plating'', or excessive spending on networks.
But the states alone are not to blame either. The chairman of the AER, Andrew Reeves, has made it clear the regulator needs greater powers to police the industry.