Tasmanian Times

Economy

The high cost of power

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The Tasmanian Greens today welcomed the release of the Draft Report of the Independent Assessment of the Tasmanian Electricity Supply Industry Panel, saying it is the first time such a comprehensive assessment of the State’s energy sector has been conducted.

Greens Energy spokesperson Kim Booth MP said that this Draft Report vindicates the Greens’ argument that a strategic review of the State’s long-term energy strategy was essential for Tasmanian electricity customers to be able to achieve a sustainable low price for energy while ensuring viable energy supplies into the future.

Mr Booth also said that this important concrete body of work is the first step in a series which was made possible by the Greens’ initiative negotiated with Labor and passed by the State Parliament last year.

“Although this is only a Draft Report at this stage it is very clear that the Tamar Valley Power Station (AETV) has been a very high-cost electricity producer, for which unfortunately the mum and dad electricity consumer is paying through the nose,” Mr Booth said.

“The Independent Panel has identified many issues, problems and strengths within the state’s electricity sector. One thing the Draft Report emphasises is that until whilst ever Hydro’s wholesale monopoly exists, there is no possibility of a proper competitive retail market in Tasmania, and thus power prices wil remain high.”

“The Independent Panel have also pulled together interesting information regarding the positive and negative inter-relationships between the state’s power entities, how they operate in the markets and how that impacts on both non-contestable customers and a long-term energy strategy for the state.”

“In particular, the Independent Panel has presented three proposed Reform Paths forward upon which they are seeking public comments. Their preferred draft position for option 2, for example, canvasses Hydro Tasmania focussing on generation and dispatch with the volatile and risky re-selling operations handled by a number of independent power trading entities.”

“Another key area for discussion presented in the Draft Report is the governance issues in regard to the structures, and clearly there will be some hard decisions needed to be made by government in the future to address these.”

“Following the release of this Draft Report and associated documentation today, the Panel will be holding another round of public hearing and submission in February to prepare for the final report expected in March next year, and the Greens urge the public and stakeholders to engage with this important opportunity and process,” Mr Booth said.

Download: Terms of Reference as negotiated by the Greens and passed by the State Parliament, 2010.
Dec15_Energy_Review_Amended_Final_ToR_K_Booth_ATTACH.pdf

Electricity Supply Industry Expert Panel website: http://www.electricity.tas.gov.au/

Use the TT News Dropdown Menu (top Nav Bar) for the breaking news/comment on this issue.

Matthew Groom MP
Shadow Minister for Energy

Thursday December 15, 2011

Electricity Panel supports Liberal push for full retail contestability

We warmly welcome today’s draft report from the Electricity Supply Industry Expert Panel which provides yet further support for the Liberals’ push for full retail contestability in the Tasmanian electricity market.

As the Tasmanian Liberals have long been saying and as the Panel has today made clear, the introduction of full retail contestability is in the best interests Tasmanian power consumers.

The Panel has also confirmed that there is no impediment to immediately moving to open up the market to competition and that retailers are keen to participate.

The Panel has identified some reform options to provide greater price transparency in the wholesale market and maximise outcomes. We will give careful consideration to the options but we remain committed to our policy of implementing full retail contestability as efficiently and effectively as possible.

What the Panel has also made clear is that under the current retail price determination households and small businesses are paying between 5% and 10% more for their power they the need to be*.

The Government must now support the Tasmanian Liberals push to remove this unfair cost burden on households and small businesses already drowning under the weight of power price pressure. What we now know is that not only are Tasmanian power bills amongst the highest in the country – they are also paying more for their power bills than they should be.

The Government now has nowhere to hide on this issue – it now has no choice but to back the Tasmanian Liberals’ push for the introduction of full retail contestability as soon as possible.

*For a typical Tasmanian household bill this equates to up to $240 per year based on an assessment undertaken by the Tasmanian Economic Regulator as set out on its website.

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9 Comments

9 Comments

  1. Garry Stannus

    December 16, 2011 at 1:31 pm

    and Peter Fagan (at #7) makes a fair point … technocracy led us down the Hydromania path. Can we trust our experts?

  2. Simon Warriner

    December 15, 2011 at 11:56 pm

    Thank you for your enlightening analysis Shaun. Unfortunately the lack of coherent plot seems to be typical of the Tasmanian governments operations across all sectors. I guess that is what happens when nepotism rules and incompetence is rewarded.

  3. PB

    December 15, 2011 at 11:52 pm

    I always welcome Shaun’s postings on TT which talk far more sense than anything our abject “leaders” ever come up with.

  4. Peter Fagan

    December 15, 2011 at 11:47 pm

    #6 Shaun thanks for that detailed and informative post.

    I agree with you about the lack of substantive benefits arising from retail contestability. My experience as a retail consumer in NSW is that the customer just gets hassled by cold-calling salespersons to churn through the various retailers, all of whom offer virtually the same product. One is induced by something really lame like a “$50 off the next bill deal” to change from one retailer to the next. The product remains the same. Nothing any of the retailers offer makes electricity cheaper, fairer, greener, more efficient or more reliable. It is complete nonsense.

    The electricity industry is vital but problematic. You comment:

    “…key decisions are being made by non-technical people who simply who do not understand the consequences. That plus the separation of generation, transmission / distribution and retail directly results in reduced co-operation between the different areas and consequent efforts by one to increase costs for another.”

    I am sure that is all true. But remember our history – when decisions were made by technical people who understood the consequences and there was integration of generation, transmission / distribution and retail resulting in total co-operation between the different areas, Tasmania had … Allan Knight and Russel Ashton and their Hydro Electric Commission … which those with long memories know didn’t work very well either, to say the least.

    How to find a balance? That is the question.

  5. Bennetts

    December 15, 2011 at 6:58 pm

    So the Liberals Energy Minister Matt Groom says:

    “The Panel has also confirmed that there is no impediment to immediately moving to open up the market to competition and that retailers are keen to participate.”

    but the Panel actually says:

    “Mr Pierce said that the main barrier to effective retail competition is a lack of choice at the wholesale level.

    “So long as Hydro Tasmania remains the dominant wholesaler, major national retailers will not enter the Tasmanian market and choice for households and small businesses will be stymied. Unlocking greater retail competition in Tasmania, and with it, effective customer choice, hinges on this issue being addressed”, he said.”
    http://www.electricity.tas.gov.au/news/expert_panel_releases_draft_report

    Has Groom even read the panel’s report?

    Why is raising false hope over retail contestability?

    And why isn’t anyone in the media willing to highlight this obvious contradiction between what Mr Groom says the Panel said, and what the Panel actually said.

    This guy is probably going to be the next Energy Minister, and here he is telling outright lies about the findings of the Expert Energy Panel.

    Media, where art thou?

  6. William Boeder

    December 15, 2011 at 4:46 pm

    Each of the GBEs that might manage to create profits after all their mates are taken care of, do those profits go into general revenue or are they siphoned off to subsidise lesser managed, or even poorly managed other State GBEs?

    I understand that this State government dump a lot of their own created debt upon the GBEs, so somehow this State government do not appear as incompetent as they truly are.

    Tote Tasmania for example, what a ship of fools this has proven itself to be, the whole crew need to be cast offshore from Tasmania?
    Macquarie Island comes quickly to my mind, maybe these hounds could busy themselves by cleaning up the feral rodents that seem to proliferate in that environment?
    Something has to be done to discipline the board and management of this woefully directed and managed GBE?

    Then of course we have the perennial loser of Forestry Tasmania, this is another of those ships containing a great number of unqualified captains and some dodgy executive directors, all of ’em paid quite handsomely thank you very much?

    There are bound to be areas of Aurora that can still be better stream-lined, though it would be necessary to do this on a weekend when there are none of the know-it-all directors swanning around the place?
    I firmly believe that if we were to locate and then possess an active intelligent un-cronied new set of directors, to serve on each of these GBE executive boards we would not be the basket case we appear to be in the eyes of the rest of Australia?

    The next target should be the Tasports GBE, with the methodology and practices honed during his time at Forestry Tasmania, the current big-wheel Evan Rolley, might have a few loose or untied rope-ends about this sailors roosting perch…

  7. Pilko

    December 15, 2011 at 1:10 pm

    Well done to the Greens for getting this panel off the ground. Sadly i think the report along with its reccomendations are destined for the too hard basket.

  8. Bennetts

    December 15, 2011 at 11:49 am

    What does the Liberal’s Matt Groom have to say about this?

    Could we see his media release on this as well please Mr Editor?

    Ed: TT runs what it receives, or tries to (sometimes we run outa time). Rarely get anything from state Libs. They appear to be above TT?

  9. socratesdancing

    December 15, 2011 at 9:05 am

    Call me cynical, but is it just me that thinks these findings could have been gathered by stopping and asking someone in the street? Even the bloody Government buys its power from interstate. I wonder what ‘stating the bleedin’ obvious’ cost us?
    AND even then, this report is just bounced back for feedback (In particular, the Independent Panel has presented three proposed Reform Paths forward upon which they are seeking public comments.).
    Is there anything in this state that’s not run like the public service?

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