Blackouts, price hikes, for smaller states
by Peter Mac Households and industries in Victoria and South Australia are bracing for power failures as this year's peak annual demand coincides with plant breakdowns and crucial maintenance. Victorian Shadow Treasurer Robert Clark has lashed out at the state's ALP Government for dragging the chain over construction of three new power stations. However, as state Premier Steve Bracks pointed out, the previous Kennett Government was obsessively focused on the privatisation of the state's power generation system, and neglected altogether to plan for an expansion of the system to meet rapidly-increasing power demand. Successive Australian state governments have taken steps to implement a privatisation agenda. It is noteworthy, however, that the states who are most advanced in their plans to sell off their power-generation capacity, are suffering the worst effects of power shortages and cost blow-outs. The situation has been exacerbated by the lack of an effective national power policy. The mass privatisation of state power-generation was hailed by the private sector as the means of delivering cheaper power alternatives to consumers by allowing them to change from one power authority to another, and to buy their power from suppliers in different states. However, the results are revealing a different picture. In NSW the ALP Government's Treasurer, Ted Eagen, was forced to back away from his own plans to privatise the state's electricity generation system after a humiliating roasting by power industry shop-floor delegates at an ALP State Conference some years ago, and the system remains state-owned. NSW and Queensland are the only states that have spare generating capacity. However, the facilities to transfer power across state boundaries have recently been criticised by experts for their relatively low capacity and their susceptibility to breakdowns during periods of peak demand. And in states where alternative supplies have been introduced, consumers are getting a rude shock about the price of privatised electricity. There'll be no cheap electricity for households in Victoria, for example, where an alternative supply became available two weeks ago. Prior to the introduction of these new arrangements, the five regulated power suppliers in that state indicated that they would require an overall price increase. The Bracks Government insisted that this be capped at 4.7 per cent, but in order to sweeten the pill for the suppliers, and to cushion suburban and regional consumers against the full price rises, he granted the suppliers a generous subsidy of $118 million. And how did the new captains of the power industry distribute this largesse? They kept the average price rise to 4.7 per cent all right, but they charged tariff increases of between five per cent and a whopping 25.9 percent to domestic consumers, and reduced the charges to business by eight or nine per cent! As a representative of one company explained solemnly "We reviewed the current rates and we have adjusted them to more effectively represent the costs associated with servicing these customers." So much for subsidised bills for households. The companies are expected to offer some concessions to their customers by way of discounted movie tickets, video vouchers or fly-bys, but these will do little to compensate for the savage increases that Victorian households are expected to shoulder. The final deficiency of the privatised power system is in its lack of concern for the environment. Most power suppliers offer incentives for consumers to actually consume more energy, rather than less, in order to boost the company's profits. For example, as the environmental organisation Energy Action Group (EAG) recently pointed out, the power supplier AGL offers no-deposit, interest- free loans to purchasers of air conditioners, even though the critical peak energy demand has been magnified in recent years by widespread mid-summer use of air-conditioning. The company offers no such subsidy for energy-efficient appliances and houses. Indeed, this week news filtered out about one company's intention to construct a wood-burning power station in Sydney's western suburbs. The proposed plant would burn not only sawmill residues but also old furniture, thereby releasing toxic gases into the atmosphere. Meanwhile, good timber (including some from old-growth native timber forests) is being exported overseas en masse from some states to be converted to woodchip! There is similar lack of concern at government level. Despite "lip-service" by state and federal governments about the looming crisis of global warming, there appears to be no serious long-term commitment to the use of non-polluting power generation utilising wind or solar power. But the real culprit in all of this is not government. As the current power dilemma illustrates, the culprit is capital itself, and its insatiable drive for profit, to which our current crop of governments remain absolutely subservient.