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Saturday, 11 August 2012

Where power lies

An excellent post over at Andrew Elder’s Politically Homeless on Federal Opposition Leader Tony Abbott’s contribution to the energy debate this week.

It provides a link to the evcricket blog, which provides some very interesting facts about electricity generation - facts that seemed to elude Mr Abbott this week.

Energy policy, specifically electricity policy, is an interest of mine as it strikes me that much of what we view as civilisation is heavily dependent upon the ubiquitous 240 volt three pinned wall socket, yet few Australians are aware of how their energy is generated - apart from vague idea of power stations - let alone where the power for their house actually comes from. 

I became acutely aware of this issue when I became involved in the electricity privatisation "debate" in NSW from late 2007 onwards. Much of the verbiage in this process was absolute garbage peddled by discredited hucksters such as ratings agencies (Standard and Poors being a serial offender, scripting NSW Treasury and that political zygote Michael Costa) and other intellectual pygmies, such as Federal Energy Minister Mar'n Ferguson (whose claim to his position in public life is solely based on the fact that he is the son of former NSW Deputy Premier Jack Ferguson).

Electricity infrastructure was rolled out in this country largely by local government, aggregated by state governments in the latter part of the post-war boom and then corporatised through the eighties to become a ripe plum for the usual suspects looking for easy pickings in this neoliberal age.

The assumptions of the market - and even the idea of a market as the best instrument to allocate energy resources in Australia - are seriously flawed when one gets to grasp the fallibility of base load power generation.

A good example of this is Transgrid in NSW; a State Owned Corporation who have been pushing for high voltage power lines from baseload power stations to all parts of the state based on demand management scenarios where they simply got a ruler and drew a line that looked like the North Face of Everest and called it 'projected demand'

Efficiencies in consumption mean that demand is flatlining or falling in south-east Australia.

And this isn't even getting close to the ridiculous subsidies that taxpayers fork out to Alcoa and other aluminium smelters giving them electricity at absurdly low prices so they can produce what is little more than bottled electricity. If we had an informed populace most state and federal energy ministers would be swinging from their largely redundant lamp posts.

An example: The Victorian Bushfire Royal Commission recommended a major overhaul of the 'poles and wires' network that was fingered as partly culpable in the disaster that swept parts of Victoria in 2009. This network is owned by SP AusNet after the State Electricity Commission of Victoria  was privatised by the Kennett government. Surprisingly, the private company put commercial considerations ahead of the public good and allowed this infrastructure to run down. Now that they have to do something about that little oversight they are seeking permission from the Australian Energy Regulator to pass the costs through to the privately owned retailers (the people who send you your electricity bill), who will no doubt show the same consideration of the public good as SP AusNet, given that the electricity pricing market in Victoria is totally deregulated. That's why your electricity prices are going up - nothing to do with Carbon Price there, Tony. 

It's a fascinating example of how privatisation allows corporations to socialise costs while pocketing profits. Singapore Power is owned by the Singaporean government through a company called Temasek Holdings. So apparently it's bad for Australian governments to own infrastructure, but totally OK for foreign governments to own Australian infrastructure. Gotta love the pygmy logic of neoliberalism.

So if you're a Victorian you could do worse than toddle off to the Australian Energy Regulator's website and put in your two cents about this shakedown by the Singaporean Government. I doubt it will make too much difference in the ultimate outcome, but at least you might learn something of how decisions are made in this country and how little it has to do with elected politicians. Bring your own lubricant.

Similar story in NSW where the Independent Pricing and Regulatory Tribunal (which is none of those four things) green lighted passing on a $17 billion spend on poles and wires to household power bills, which is where half the increase in regulated electricity prices is coming from

So while our parents generation paid for our electricity infrastructure once, through taxes, we are now paying for it again, through power bills. It's what Arthur Daley referred to as 'a nice little earner'.

It is not far removed from government underwriting the installation of horse watering facilities on every street corner ten years after the arrival of the Model T Ford, and charging the cost back to households. 

Wonks talk sonorously about 'not pickling winners' , but what is gold plating baseload power and charging the bill back to households who have no choice but to cough up the difference?

So a fixation by a failed politicians on hanging on grimly to baseload power generation is going to see Gen X pick up the tab, and that's why power prices are increasing. Who benefits? The private corporations who have snatched public infrastructure from the Australian people courtesy of culpable politicians from both major parties.

I wouldn't be surprised if in my lifetime we re-invent the wheel and see local government becoming the driver for community owned power generation from a range of sources distributed on a cost basis to ratepayers. It's cheaper, works for the public good, is a local employment generator and cuts out the carpetbagging middlemen fleecing us at the moment. 

Maybe that's why we did it that way to start with.

1 comment:

  1. oh I am pleased to meet you. followed you back from comment at Gerry's blog. I wail constantly to everyone about Singapore owning our utilities. They could declare war and defeat us in one day by simply cutting off phones and power.
    Do read about ENRON swindle with power cuts used deliberately to raise charges to consumers.

    For some time I have inconvenienced myself to avoid shopping at ColesWorths, foolishly thinking that IGA was a union of various Independent Grocers ---- no no no. giant corporation, South African owned, and they also own all the Mitre 10 hardware stores. John Howard's FTA?
    I urge everybody to patronise Farmers markets and only resort to the big chains where absolutely necessary