Flicking the switch on a power price whinge

COAG's latest energy communique coincides with reports showing a spike in cost-of-energy complaints in Australia. But a comparative view from Europe may leave these gripes flat.

For a country that coined the phrase "whinging pom,” we are notorious whingers and never more so than about essential services (water, gas, telecoms, electricity) and public services generally.

I suggest we need to get a sense of perspective – while readily acknowledging that essential service affordability is a big headache for a minority of us.

Brisbane’s Courier-Mail in the past week has called electricity bill increases "one of the most painful cost of living pressure points for Queenslanders” before going on in the same editorial to concede that the $11 billion worth of network capital outlays of the past eight years were necessary because of the "blackout prone and under-funded network” of the early 2000s.

The veritable flood of reports and reviews about energy issues that has marked November – I think they add up to about 2,000 pages in all – has helped to revive the media coverage of power bill problems after Julia Gillard decided in August, again quoting the Courier-Mail, to "turn power prices in to pure politics (by) laying the blame squarely at the feet of the now mainly conservative state governments (because) she desperately needs to convince voters the new carbon tax (is) not the main reason for higher bills.”

Just how hard it is going to be for Gillard to deliver on her implied promise to cut power pain in her gunnery of August is demonstrated by the new communique from the Council of Australian Governments’ energy ministers committee.

The Standing Council on Energy & Resources spent Friday wrestling with what to recommend to Gillard and other first ministers for the December 7 COAG meeting.

The energy ministers, while providing no details, say that they aim to "reinforce the focus of the market on serving the long-term interests of consumers.”

Out in voter-land, spurred on by Gillard and the tabloids, consumers are waiting for an answer to the question "When will power bills fall?”

Martin Ferguson, who chairs SCER, told an energy forum last week that we can expect them to "stabilise from mid-2013” as the need eases for network infrastructure refurbishment.

"Unfortunately,” he said, "there is no quick fix.”

Ferguson also said the ministers are seeking to ensure that "consumers are not paying more for electricity than is necessary.”

The point here is that the next financial year is the last in the present Australian Energy Regulator network charges determination package. It runs from 2009 to 2014.

The Australian Energy Regulator, in whatever form the politicians decide to re-jig it, needs to get on with the job of determinations for 2014 to 2019, but it requires new riding instructions in the form of rule changes.

Apart from whatever axemanship Tony Abbott can bring to bear on the carbon price, bills are not going to fall. The next AER determinations are intended to keep price rises much lower.

Of course, this gives added edge to the most popular media play on energy of the past fortnight: "Electricity bill complaints on the rise,” as ABC news had headlined on its website.

New reports from the energy ombudsmen in both Victoria and New South Wales have highlighted substantial rises in complaints to them during the past financial year.

New South Wales ombudsman Clare Petre says most of the more than 18,000 power-related complaints she fielded in 2011-12 were about affordability.

"People are disputing their bills, unable to pay them, facing disconnection or already disconnected and subject to debt collection or credit default listings.”

That these folk are in pain and need help is beyond dispute.

That there are many thousands more families who have not been driven to the ombudsman for assistance but are under the power pump is also without question.

But number of complaints to the ombudsmen – about 100,000 across eastern Australia for all forms of energy – needs to be set against the number of residential account holders: some eight million.

Even if you take in to account those for whom power bills are more than a nuisance, perhaps a million households, this still leaves seven-eighths of us paying up without breaking in to a sweat.

And most of the latter can save hundreds of dollars by being more pro-active about swapping suppliers and looking at how we use electrons.

All of which raises the question: just how badly off are we down here?

Recent data out of Europe tells us the Brits for example are pleased that the number of homes in fuel poverty has slid back a bit in 12 months to "only” 4.75 million.

Spain, with 24 per cent unemployment, reports four million households unable to pay their electricity bills – and the figures are more than two years out of date.

The French say they have 3.8 million fuel-poor homes.

Wealthy Germany, say its charities, is keeping fuel poverty a "hidden issue,” but they point to lower-income households having to spend between 14 and 17 per cent of disposable income on energy in an environment where the national and state governments load on costs to subsidise renewable energy.

Italy’s National Institute of Statistics says 11.5 per cent of households could not afford to adequately heat their homes back in 2010.

Average Italian wages are among the lowest in Europe. Average Italian energy bills are among the highest in the European Union.

Poland’s authorities shrug and say they haven’t a clue – there’s a lack of data – but the regulators reckon 40 per cent of Polish households spend at least 10 per cent of disposable income on energy.

On a population comparison, it is possible that the European situation is rather worse than here – not forgetting, of course, the billion or so elsewhere for whom a power supply is beyond reach.

By comparison, the average power bill for Australian households is 2.6 per cent of disposable income, with those doing it tough for various reasons outlaying 5 per cent and more.

It would be interesting to have a whinge-o-meter to compare the volume of local complaints – as measured by media noise – with that in Europe.

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