Hospitals and health care facilities are the latest victims of power bill shock caused by Australia’s rising electricity costs.
The cost of electricity has almost doubled for some health facilities, and they, like many Australian households, are already struggling to balance their budgets.
Many regional hospitals may have to cut costs or shut down some operations and services just to pay their power bills.
These increased costs are the result of a new 24-month electricity contract which took effect last month. According to Health Purchasing Victoria, in Victoria alone, health services are now facing an estimated $44 million rise in power bills, leaving many health services wondering how they will absorb the soaring costs.
One regional hospital reports a power bill rising from $4000 to $7000 last month, while another regional health service’s monthly electricity costs rose from $8400 to over $15,000. Nationals MP, Emma Kealy, told Parliament last week that the Wimmera Health Care Group in Horsham expected power prices to increase by $500,000 this financial year.
Hospitals are scrambling to find ways to cover these extra costs without undermining patients’ safety. These strategies include installing renewable energy facilities and improving sustainable practises.
The health sector joins Australian households in figuring out how to deal with sharply rising electricity costs.
Aussie households stretched thin by slow wage growth, increased cost of living and high debt levels have responded by reducing the amount of power they use. This may include switching off heating and using less lighting.
But there are only so many lights you can switch off and only so many ways one can reduce power use. The next step is to stop buying food, clothing and limit spending on health and household goods.
And, as much as these reductions may be inconvenient and, sometimes, harmful to health, our hospitals can’t respond in a similar way.
Public hospitals and health-care facilities already operate on slim budgets and when they are hit with an almost 50 per cent increase in power costs, they simply have no way to cover it, apart from asking for more government funding.
And private facilities have to pass on these costs to the consumer.
Eventually, hospitals, as with households, will have to cut spending on ‘discretionary’ items, which may include meals, linen and rehabilitation services. These services may need to come at an extra cost to patients, many of whom will be trying to cover their own power bills.
According to consumer watchdog CHOICE’s Consumer Pulse survey, over 80 per cent of Australians are concerned about household electricity prices and the cost of private health insurance.
Given the anxiety electricity prices cause in most households and the new threat to our health system, the Government needs to tackle this problem – and do it quickly.
The first step is investigating the sector, which the Government directed the ACCC to do earlier this year. The ACCC preliminary report is due by the end of September 2017, with a final report to be released at the end of June 2018.
So, what is the answer? Do the states need to ‘take the power back’?
There is an argument that de-regulating the electricity sector creates competition and forces prices down. This has not happened. But is re-regulation going to make things any better?
Re-regulation has its merits, but it may come at the cost of innovation, which is necessary if we are to rapidly embrace renewables.
Maybe a base regulated price for low to middle income earning households is the answer. Along with an option to take up a premium product. Or having one rate for poorer households and a higher rate for those that earn more.
Or is Malcolm Turnbull’s snowy hydro 2.0 pet project the answer? Sure, it will provide power to 500,000 extra households, but at what cost? Will it reduce the price of power, or merely cover population expansion in NSW and Victoria? And how long will it take to complete?
Renewable energy is surely the best answer long term, but there needs to be significant investment in the meantime, which will also have an impact on our hip pockets. But it is one that will ease the strain on power bills in the future.
The Renewable Energy Index released this week by Green Energy Markets revealed that the renewables sector will generate enough power to run 70 per cent of Australian homes once wind and solar projects currently under construction are completed. This means it will meet the Government’s 20 per cent renewable energy target by the end of 2018 – over one year earlier than predicted.
According to Green Energy Markets analyst Tristan Edis, renewables, in particular wind and solar, are a “significant source of power” and responsible for a “construction jobs and investment boom”.
Could the sceptics then lay their criticism of renewables aside and get on board with the obvious benefits? Or are they happy to rely on fossil fuels instead of investing in a cleaner, less expensive future?
Right now, it may not help the thousands of Australians who are currently on hardship programs to help pay their power bills, but at least renewables may give them, and the rest of us, something to look forward to.
What do you think is the answer to our soaring power prices? How much has your power bill increased in recent months? Have you installed solar panels and/or batteries? Are you having to cut back spending in other areas to pay your power bill?