"Competition" to hit South Australian gas consumers
by Bob Briton Less than 12 months after being hit by sky rocketing electricity bills, South Australians are set once again to feel the full brunt of competition, deregulation and privatisation. This time it is their gas bills that are about to rise. And it will only be a matter of time before the rest of Australia follows. Essential Service Commission chairman Lew Owens has warned South Australians that they will pay up to 20 percent more for their gas next winter when the market is opened up for competition between retailers. The cost of new computer systems and structures supposedly needed before other corporations can move into the market is the reason given for the price spike. All these additional costs will be passed on to consumers plus a bit extra to cover for profit margins. The increase would see average household bills rise from around $470 to $560 per annum. The same households have already been hit with an average 26 percent increase in electricity charges since January when a fully deregulated, free market in electricity was introduced. Mr Owens also warned that electricity charges are not likely to come down in 2004. It seems that lower wholesale electricity prices have been offset by increased transmission costs. Many SA households are already in trouble with their power bills. AGL reports that 3000 of their customers are on special payments plans because they cannot pay their bills in one hit. The SA Council of Social Service said that their financial advisers were fully booked up and that there is a two-week waiting list for an appointment. The Electricity Industry Ombudsman Nick Hakof notes that complaints from electricity consumers have doubled in the past 12 months. Many protest that they cannot afford to pay their bills. "Although this office does not have jurisdiction to deal with prices, many consumers contacted my office to express resentment, anger and suspicion", he told the Adelaide Advertiser last week. The entry of the NSW government-owned Energy Australia to SA markets is not anticipated to bring relief and it now seems that the SNI interconnector to the power-rich NSW grid will not go ahead. The Murraylink interconnector between Red Cliffs in Victoria and Monash in SA has been given regulated status by the ACCC instead. Power users in Victoria and SA will pay a $107 million subsidy to the Murraylink Transmission Company over the next 10 years. That cost will also be added to their electricity bills. Mr Owens has said that the only way that households could bring their bills down is to shop around among the deals on offer from AGL's competitors, TXU and Origin Energy. This can be a mind-numbing experience. The Council on Ageing is offering advice to elderly people on the confusing offers available. What is a good deal for one customer may not be a good deal for another. Factors, such as peak and off-peak usage must be examined. So far only 7000 households have bothered to switch from the previously regulated monopoly supplier, AGL. The Advertiser gave the example recently of the Freemans, a Golden Grove family whose quarterly electricity bill just broke through the $500 barrier. Astrid Freeman rang around and found a deal from TXU that would save the family $30 ... for now. This is as good as it gets. The Liberals are again talking tough about the behaviour of corporations from the safety of the opposition benches. In relation to the looming increase in gas charges, energy spokesman Wayne Matthews said that if the entry of TXU and AGL into the market currently monopolised by Origin Energy will not bring down prices, then competition should be delayed. The Energy Minister should consider directing the Essential Services Commission to use its powers under the Gas Act to set prices no higher than the present ones, Mr Matthews maintains. Neither Liberal nor Labor is calling for an increase in social security payments or wage rises so that workers can afford to pay these bills. Nor of course are the employers. Furthermore, the Libs are recommending that SA should forego "competition payments" from the Commonwealth if that is the cost of protecting SA gas consumers. In government, the same Liberals used the "competition payments" — rewards for privatising and deregulating the people's property — as an excuse for ramming through its more obnoxious legislation.