Sunday 17 June 2012

Rubbery electricity price rise claims from the NSW Government in June 2012


It seems NSW government ministers and their media advisers have no shame when it comes to the electricity price rise facts and figures they present to journalists, who in their turn do not always bother to check the accuracy of these claims.

As anyone can see, carbon price costs are adding between 7.9% and 9.4% to retail electricity prices from 1 July 2012 to 30 June 2013 depending on which power company is your supplier.

This is what the NSW Independent Pricing and Regulatory Tribunal clearly stated on 13 June 2012:

     · The final decision allows for an average price increase of 18% across NSW (including inflation), primarily as a result of rising network (poles and wires) costs and the introduction of the carbon price. Our final decision is higher than the 16% price increases indicated in the draft decision in April reflecting updated estimates of costs of generating electricity.

The average price increases will vary for customers of the 3 regulated electricity retailers as follows:
 20.6% for EnergyAustralia customers, which translates to an extra $7.00 per week ($364 per annum) on an average residential customer bill, and $9.07 per week ($472 per annum) on average for its small business customers
 11.8% for Integral Energy customers, which translates to an extra $4.00 per week ($208 per annum) on an average residential customer bill, and $5.19 per week ($270 per annum) on average for its small business customers
 19.7% for Country Energy customers, which translates to an extra $8.21 per week ($427 per annum) on an average residential customer bill, and $10.67 per week ($555 per annum) on average for its small business customers.

· The average price increase of 18.1% is higher than the 16.4% that was indicated in our draft report, reflecting updated analysis and inputs, including an updated estimate of inflation. Retailers submitted that there would be less vigorous marketing to customers as a result of declining margins in NSW under our draft report. They argued for larger price increases…



The NSW Minister for Energy and Resources Chris Hartcher in a media release that same day spun these figures:

Families and businesses across NSW are going to be devastated by the latest round of price rises, expected to add between $208 and $427 to the average household power bill.
80% of the price rises for Western Sydney households will be caused by the carbon tax. Price rises for Endeavour Energy customers will add $208 to the average bill, of which $166 will be because of Labor's carbon tax.*

The Daily Examiner online one day later:

POWER bill pain in NSW can be directly attributed to the Federal Government's carbon tax, says the state's Energy Minister Chris Hartcher.
As of July 1, families can expect to pay between $400 to $700 more a year on gas and electricity.
The Independent Pricing and Regulatory Tribunal predicts the average bill will rise about 18.1%, largely due to the carbon tax.

It should be noted that, because power supply infrastructure is not fully privatised in New South Wales, a significant proportion of the full retail and business price rise is directly attributable to the management style of the O'Farrell Coalition Government.

* Endeavour Energy is a statutory State owned corporation, established under the Energy Services Corporations Act 1995 (NSW) and the State Owned Corporations Act 1989 (NSW).

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