Abbott's power bill jolt

While electricity prices will rise due to the carbon tax, its contribution to higher bills will be much smaller than other factors – but the average household of voters will only see the bottom line.

No doubt even in far-away South Korea the prime minister remains focussed on the awful numbers (for Labor) emerging from Saturday’s polling massacre in Queensland.

However, she and her colleagues and advisers at home might also care to look at another set of numbers because they bode no good for federal Labor when its day of the long knives dawns late in 2013.

One of the notable features of the Newspoll exit poll of voting Queenslanders is that 69 per cent put the cost of living as one of their top grievances followed by 63 per cent choosing delivery of state services.

In this context, a set of numbers that should give Julia Gillard pause is provided by the Australian Energy Market Commission, key regulatory adviser to the federal, state and territory governments on electricity and gas issues.

In a report prepared for Council of Australian Governments energy ministers last year, AEMC had a stab at predicting residential electricity prices for 2012-13 and 2013-14.

Australia-wide, it said, householders could expect to pay 30.75 cents per kilowatt hour in 2013-14, up more than 37 per cent from 2010-11.

Where the rubber hits the voting road for Labor in these projections is in three states – Queensland, New South Wales and Victoria – containing 87 per cent of households and voters.

On the AEMC numbers, Queensland residential prices will be 29.28c per kWh in 2013-14, up from 20.69c in 2010-11, while Victorians will be paying 30.32c (up 32.6 per cent) and, worst of all perhaps because it can be argued that Gillard is prime minister thanks to NSW voters not hammering her as hard in 2010 as they did Kristina Keneally in 2011, NSW power users will be paying 32.24c, up 41.7 per cent from 2010-11.

Tony Abbott may be relied upon to make much of the impact of the carbon price on these costs, and it is a contributor – but not a large one.

The AEMC’s projections indicate that, across Australia, household prices in 2013-14 will be 1.74c per kWh higher than they would be without the carbon charge.

Nationwide, that is 1.74c out of a total rise of 6.6c.

When one looks at the power price stack as envisaged by the AEMC, other environmental schemes, including the renewable electricity target and solar feed-in tariffs and so forth, will be contributing 1.91c to the 30.75c total national charge in 2013-14.

In NSW, where the price rises will be highest, the impact of green schemes (other than the carbon tax) will be only 1.57c per kWh.

The four largest impacts on NSW prices, travelling along the supply chain, will be 11.16c per kWh for wholesale energy (what the power stations get in the competitive market plus the carbon price), 2.35c for high voltage transmission, 14.19c for delivery along the distribution networks and 3.12c for retail charges.

Your average householder, of course, does not sit at the kitchen table staring at the new power bill and focussing on price stacks.

He or she sees only the bottom line in black type.

On these numbers, for a NSW home using 8,000 kilowatt hours a year, and many do, especially in the outlying areas of Sydney where the weather is hot and humid for four months of the year and pretty cold for at least another three months, the annual cost of electricity will be around $2,580 – plus the GST. It was around $1,820 in 2010-11.

Many of these suburbs are the areas where voters stuck to Labor federally in 2010 and where they turned viciously against it in the 2011 state election.

Barry O’Farrell did not also make himself minister for Western Sydney when he took on the premiership without good reason.

Campbell Newman claims that freezing the standard tariff in Queensland will save his constituency about $120 a year. On the AEMC arithmetic, Gillard’s carbon price will add $154.

The federal government will be quick to point out that it is offering various forms of compensation for the carbon price, but it remains to be seen how far householders factor this in when looking at a power bill that is much higher than it used to be, with Abbott yipping in their ears that it is all Gillard’s fault – and she lied to them about doing it before the last federal election.

Something else the prime minister may care to bear in mind is that, if she sticks to her assertion that federal parliament will run full term, she will be going to the polls around the time the latest power bill for winter is arriving. This is the one that always hurts the most because of high electricity and gas use if the weather has been cold, exacerbated by it being the first one to carry the new, increased tariffs – they take effect on 1 July each year.

The seer told old Julius Caesar to bewares the Ides of March. For Julia Caesar the new version next year might be beware the Ides of September (or thereabouts).

Keith Orchison, director of consultancy Coolibah Pty Ltd and editor of Powering Australia yearbook, was chief executive of two national energy associations from 1980 to 2003. He was made a Member of the Order of Australia for services to the energy industry in 2004.

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