Friday, 13 March 2009

The great electricity deception !

Now it becomes clear why the New South Wales government has been so desperate to rid itself of the state power industry.

The Independent Pricing and Regulatory Tribunal ( IPRT ) has recommended an electricity price hike of 21.5%, effective from July 1. This would see the price of electricity increase by $ 180 a year for the average household.

The reason for the price hike is a claim that the wholesale cost of electricity has risen. The Australian Energy Regulator ( AER ) has not specified why this is so, but it certainly is not because of a rise in raw material costs.

Coal is the source of electrical power in this state, and the economic downturn has seen demand for coal drop sharply - and prices have actually decreased.

Of course this rise in power pricing is a giant confidence trick. It is a variation on the old " Good cop. Bad cop " routine.

The IPRT comes out with an inflated price increase. The government beats it's breast and declares it will save the poor taxpayers - and reduces the hike by a percentage point or two.

The great unwashed heave a sigh of relief - and renew their vote for this saviour that has prevented them being dragged screaming to the poor house !

Interestingly, this power hike has nothing to do with the coming carbon reduction scheme, due to start next year. The pundits estimate that this alone will see an electricity increase that will decimate household budgets.

What it is really about is making electricity provision attractive to the private sector who the government hopes will put up the money to build new power stations. The state government is financially unable to find funds for this purpose, and at the same time a power price increase can be used to renew the electricity infrastructure on the rail network - which is unable to cope with new trains which will soon start to arrive.

It is said that the only certainties in life are death and taxes !

Be prepared for the price of electricity to surge several more times until it reaches a level that either brings the private sector into ownership - or reaches a milch cow level at which the state government can not afford to relinquish it.

In the interim - it would be a good idea to keep a good supply of candles on hand !

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