Alongside housing, electricity prices remain a mainstay in the cost of living debate in Tasmania.
This is unsurprising considering the residential tariff has risen 46.5 per cent from the end of 2007 to July 2016, far outpacing other household economic indicators like wage growth.
Electricity prices in the state are normally set annually and independently by the Tasmanian Economic Regulator who looks at factors including electricity generation, network and retail costs, as well as changes within the national energy market.
The regulator notes that Tasmanian standing offer electricity prices fall mostly in the lower range of prices available across Australia.
But power usage is generally in the high range due to the state’s cold climate and older housing stock, poorly designed to engender energy efficiency.
With no retailers interested in competing with state-owned electricity company Aurora, Tasmania remains the only Australian state where energy generation, distribution and retail companies are all publicly owned.
This puts the state in an unique position to be somewhat shielded from the large price shocks that could be experienced in other states with a mix of public and private enterprises – though not from anticipated massive hikes in wholesale electricity and gas prices.
Tasmanian energy consultant Marc White said the state government had to intervene on the wholesale electricity price issue now before the community was “irreversibly impacted”.
He said the wholesale energy pricing for 2017-18 had hit $126.32 megawatts-per-hour following the closure of the Victorian coal-fired Hazelwood Power Station – double the amount for the same parcel of energy that was traded last March.
Despite this, Tasmanian electricity customers have been relatively protected from the skyrocketing rises through reduced network operating costs.
The Australian Energy Regulator last year made a draft decision on TasNetworks’ distribution allowance which meant that annual residential network costs would be cut by $163 in 2018-19.
Energy Minister Matthew Groom last month said he had had been directed state Treasury to present options to the government on changes that can be made to reduce national-led price rise exposure to Tasmanian consumers.
But Labor have concerns on what will happen to Tariff 41, a heating and hot water concession they say is used by about 80,000 homes.
Deputy Labor Leader Michelle O’Byrne said a petition presented to Mr Groom 18 months ago was yet to get a response.
“Tariff 41 will disappear on Energy Minister Matthew Groom’s watch and the tariff that provides cheaper hot water and heating is already on the rise,” she said.
TasCOSS and Anglicare joined forces more than six years ago on a four-point action plan to make electricity more affordable for Tasmanians.
The plan involved ensuring affordable prices for everyone, concessions that targeted those in need, moves to make houses more energy efficient, and more emergency relief for households in crisis now.
“The tariffs have been designed in a way which means they are not for all income earners and really just for people who can afford electricity – the middle to high-income earners,” Anglicare policy officer Margie Law said.
“Concessions are a really important part of making electricity more affordable but as important, but more complicated, is the tariff system.”
Electricity is an essential service and everybody has the right to have lights, heating and to be able to cookAnglicare policy officer Margie Law
Included in the action plan was the concept of a lifeline tariff, that is an electricity price set at an affordable level for low-income earners for a small usage amount – to keep on a fridge, run a hot bath, prepare a hot meal, and heat and light a single room.
Usage beyond the lifeline amount would then be charged at a higher rate.
“This accepts that electricity is an essential service and that everybody has the right to have lights, heating and to be able to cook,” Ms Law said.
It also means that electricity users would be rewarded for lower usages, taking pressure off energy infrastructure.
As part of the lifeline tariff, the two organisations would like to see a two-part concession scheme introduced, with a flat rate concession on an electricity bill’s fixed charge and a capped percentage rate concession applied to consumption above the lifeline amount.
The government has acted on some of the points raised in the action plan, namely through the establishment a $10 million Tasmanian Energy Efficiency Loan Scheme with Aurora Energy to assist customers to purchase energy efficient appliances like heat pumps, double glazed windows, and solar panels.
Residents can apply for loans of up to $10,000 under the three-year, interest-free loan scheme.
Tasmanian energy consultant David Hamilton said because the government still owned the generation, distribution and retail aspects of electricity delivery, it should consider merging Hydro, TasNetworks and Aurora to reduce overheads.
More than this, Mr Hamilton said that the government should stop expecting a dividend from the organisation.
“It should have two clear monetary objectives: provide the cheapest electricity to Tasmanians possible ... and make the largest profit possible from mainland electricity sales – consistent with clear and prudent energy security requirements.”