PM push to cut power bills

Julia Gillard will meet with state premiers on Friday 7 December at the Council of Australian Governments in Canberra and top of the agenda will be getting sign off for reforms which could cut household power bills by $250 per year.

One of the main drivers of high power prices is the overinvestment by power companies into infrastructure. Currently, there is actually an incentive for power companies to spend more and recover the cost from consumers. Power companies have invested $11 billion to cover the peak usage for just four days of the year; this is the type of investment gouging the Government is looking to stop.

The Australian Energy Regulator will be granted a funding boost to provide consumers with more information about charges, which will enable them to have more of a say on how they use their energy.  A consumer challenge panel will be introduced to allow energy users to be at the centre of the decisions making process on power pricing. And businesses, which use most of their power during peak periods, will be rewarded for moderating this practice.

State premiers will be asked to implement pricing which reflects the actual costs involved, introduce smart meters and deregulate retail pricing to allow competition and choice where they exist.

Speaking on Channel Ten yesterday, Ms Gillard said, “We can make a difference. The Productivity Commission has said that this adds up to a difference of around $250 for a family.”

In response to the Prime Minister’s announcement, consumer-advocacy group One Big Switch agreed the plan was a “valuable start” but that consumers shouldn’t expect to see savings straight away.


Opinion: Simply not enough

Any proposals to help families with increasing household costs, especially power bills should be welcomed, but will savings of $250 a year really make any difference to already stretched budgets? When spread over a year, this amounts to $20.83 per month; hardly worth celebrating, is it?

These savings may not even come to fruition as the Prime Minister still has to get state premiers to agree to the reforms, which rely heavily on consumers changing the way they use power in their homes. Ask anyone living on a budget and the answer will be the same; they’re already doing this. Power bills have been on the rise for years and consumers have become increasingly savvy about when they use their power.  They are mindful when they turn on heating and cooling, of switching off lights and televisions when not in use and using power-hungry appliances during off-peak periods. When you look at your power bill, the vast majority of charges are for distribution and no amount of watching what you use will reduce these costs.

Living in Victoria, I already have a smart meter and can take advantage of deregulated retail pricing, but such measures make very little impact on the amount I pay each quarter in electricity.

Any move to reduce power bills is a step in the right direction, but in this instance, I think the Government really does have to try a little harder.

Do you think the measures will reduce your power bills? Would $20.83 per month make much of a difference to your household budget?

Written by Debbie McTaggart