Radical plan to cut power bills

Would you be happy to pay 700 per cent more for your power on hot days? That’s the radical plan being recommended in response to a reform paper published by the Grattan Institute.

The paper published today argues that electricity prices are not only too high but unfair, with some people paying more than they should. Although the Grattan Institute paper does not say how this should happen, it does suggest that households should pay for the “maximum load they put on the network” and not the total energy used. Such a system could also have saved the $7.8 billion of network investment over the last five years, which power companies simply recouped by charging higher prices.

Grattan energy program director, Tony Wood, one of the authors of the paper, told News Corp that by adopting a pricing structure used in France, peak demand could be curbed. The French system categorises the days into ‘red’, ‘white’ and ‘blue’, with ‘blue’ being the cheapest, ‘white’ costing double and ‘red’ a whopping nine times the price. The next day’s classification is announced as part of the evening weather forecast, and people can modify their power usage accordingly. This has seen bills drop by over 10 per cent, with consumption falling by 45 per cent on ‘red’ days, compared to ‘blue’ days.

Do you think this would curb power bills? Or would electricity companies simply find a way to charge more?

Read more at News.com.au 

Written by Debbie McTaggart