Thread: Use less electricity and water

Originally Posted by ugu80

About four or five years ago I was watching an interview with the CEO of one of the electricity companies (Origin, I think) and he stated quite simply that if people used less electricity then the electricity companies would raise the price of supply to maintain profitability. Win - win situation for them, lose - lose for us.

Yep. Heard/read exactly the same thing, although I reckon it was more like about three years ago.

State-owned electricity generators/distributors get cheaper financing because they are government entities, charge market rates for electricity, and then the resulting profits are either reinvested into infrastructure or, more often, paid to the state governments as dividends.
So, rising electricity prices are mostly a form of hidden state government tax on consumers. The carbon tax was only about 9% of rises of about 50% over the last five years, on average. Therefore, state governments bias subsidies for renewable electricity sources such as solar and wind to discourage consumers from disconnecting from the electricity grid, because they want to keep charging consumers.
If governments acted in the best interests of consumers first, before the profits of electricity companies and the dividends to state budgets, then more people would go fully solar I predict, as the cost is rapidly falling.

The whole thing with electricity companies, is they are trying to shift the burden of updating equipment onto the consumer. You put solar panels on your roof and you are spending money on infrastructure that should be part of the electricity companies normal expense in upgrading plant and equipment.

That means they (in the short term) don't have to spend as much on infrastructure improvement and will be reaping record profits. Naturally as more and more consumers install solar panels, usage will drop and the electricity companies increase prices in an effort to maintain their profit margins.

This goes in a circle and eventually something has to give. Either everybody is self contained in electricity generation and no need for major suppliers or the Government screams "enough" and makes it impractical for people to install solar panels.

Of cause, I can't see this situation happening but if things keep going, it is a logical conclusion to make.

Govenments are addicted to the dividends from their electricity companies so they won't send them broke by encouraging people to disconnect from the grid.

In Vic it's a little bit more separated than that.
Firstly it's all privatised now with three main bodies
The suppliers (generators owners of Loy yang, Hazelwood and yallourn) the network operators SP Ausnet and the retailers origin, et al

As far as I can understand the prices have been driven up, mainly, by the network operators claiming that the network needs upgrading to avoid brown outs. The conditions of original private is that they get a set return and the value of the assets poles, wires, transformers, etc.

If they can get a requirement to upgrade the network past the national regulator then they receive a greater amount in the fixed network component of your retail energy bill. The incentive is then to "gold plate" (over invest)the network as quite simply they get a greater guaranteed return as the supply charge is fixed per consumer and the no of consumers rises in line with no buildings.

It is this that has driven much of the price increases plus the much more political carbon tax, but less significant in money terms.

It's all up to the regulator website below. I have read they have been weak in granting the increases, 'cause they are too close to who they are regulating.

The regulators website
http://www.aer.gov.au/node/


Clive

Originally Posted by clive22

If they can get a requirement to upgrade the network past the national regulator then they receive a greater amount in the fixed network component of your retail energy bill. The incentive is then to "gold plate" (over invest)the network as quite simply they get a greater guaranteed return as the supply charge is fixed per consumer and the no of consumers rises in line with no buildings.
Clive

There was a story on ABC tv recently, on 4 Corners, describing exactly that. Objectors to a new power line thru their valley somewhere in NSW proved the power companies data was faked. They won their case I think.

Terry

Like many in Vic a smart meter was fitted , that I had to pay for , but do not own . I then had solar panels fitted , and was told I had to get the system hooked up to the grid , through the smart meter , that had to be done by the power company . The cost to hook me up was $180.00 It took about 20 mins , plus $50.oo adnim charge on top of that . What happened to the .When we sell off our utilities we will be better off because there will be greater competition ..

A friend installed stand alone solar power, including a battery bank, to his rural house for $19k, which was still less than the cost of connecting to the grid, as the house is isolated. No more power bills and his battery bank is always fully recharged by mid-morning, no matter how much power he uses or how cloudy is the weather. I'm rather envious.