Energy company price rises

[crinkles]

How does a recently privatised energy company justify a price increase of 18.56%? oh I forgot, they now need to swing a profit...

No matter that average salary increases are only 2 - 4% if you're lucky to still have a job or get any raise...

now I'm the one paying for all the greenies' solar panels on their rooves that the power company has to imburse them for at 3x the regular rate.

I'm so over the way these things are run.

 

[FirstNissan]

So whats the price of making your house solar? My parents had their roof "solarized" 2-3 years ago and they love it, and from what I remember it was 10-15K.

 

[Al]

I couldn't have said it better but it goes much deeper:

In the U.S...same thing. I worked for an electric utility for my whole working career. The electrical system that the (regulated) utility developed and maintained suddenly was required to allow any (unregulated) tom **** and harry to connect and effectively undercut the utility...Oh and yea the original utility and the distribution system is still regulated.

We have Cali to thank in this country. It all started there. It gave me a nice feeling to see them wither under brownout after brownout in the intervening years. And their rates are higher than ever. And the service sucks.

 

[HTSS_TR]

Hey Al, I didn't do anything ! I don't deserved to get "wither under brownout after brownout in the intervening years" !

The electrical system/distribution in Cali is a mess, luckily we didn't have many rolling blackout last summer.

 

[JHZR2]

But letting every Tom, **** and Harry in opens competition and free market, right?

If you use another electric seller in the US, you still pay for distribution to the utility.

If natural resources went up 18%, shouldn't rates do roughly the same?

The issue to me is when high profits must be made on top of the rises, etc., yet at the expense of the employees.

In the US, the regulated utilities still pay dividends, some 4+%. shold regulations set the rates such that the companies can't pay a dividend? That would lower prices to the consumer.

Just throwing some thoughts out there...

 

[PandaBear]

Originally Posted By: Al
We have Cali to thank in this country. It all started there. It gave me a nice feeling to see them wither under brownout after brownout in the intervening years. And their rates are higher than ever. And the service sucks.


We have the "private sector businesses" to thank for lobbying toward this kind of stuff, and then when the bust comes, a action figure governor that settle the lawsuit from Billions down to Millions.

Aren't you and a few others the one that championed deregulation? That's what you get for getting chaos into the system and choke certain part of the grid, so Enron and their project death star can make huge money for nothing:

http://en.wikipedia.org/wiki/Death_Star_%28business%29

That's the evil Texan.

 

[Shannow]

crinkles,
I'm not in any way shape or form justifying the price rises in the following...they plain stink.

Back in the early 90s, the generators were making electricity for 8-9c/kWhr, and the retailers selling for around 12c. The single generating Co maintained enough cash for the next two power station constructions...GST added 1.2c to the 12c.

Mid 90s, we were turned into competing SOCs, required to finance, purchase, compete, and provide a profit.

Look at Mac Gen's last year financial report
http://www.macgen.com.au/Resources/Documents/Annual-Reports/MGWEB.pdf

24,570MWHr produced, and $1.1667B of revenue...i.e. 4.7c per KWhr...yep, half of what we were generating for in the early 90s. It's been an absolute slog, but we're now getting better reliability than ever, at vastly reduced costs...

(Interesting facts nested into the report, of the $1.1667B revenue, about $530M in coal costs, $12M in legacy suerannuation costs, and $187M distributed to fed and state Govts around 30:70)

Where's the extra 4.5c gone ?

Not into savings to the consumer, that's for sure...competition was supposed to drive down prices, and it did, just not for us.

This latest rise to 21c/KWHr is still riding on the 4.7 cents that the generators are getting, but is justified by expanding the poles and wires capacity...when retail sales are DROPPING, because people are cutting their consumption due to the prices.

We've dropped our household consumption 1/3 over the last decade, and are paying more than ever.

The price rises were locked in just prior to the privatisation, and a cynic might argue that they were placed to improve the sales price.

 

[Al]

Originally Posted By: JHZR2
But letting every Tom, **** and Harry in opens competition and free market, right?

If you use another electric seller in the US, you still pay for distribution to the utility.

If natural resources went up 18%, shouldn't rates do roughly the same?

The issue to me is when high profits must be made on top of the rises, etc., yet at the expense of the employees.

In the US, the regulated utilities still pay dividends, some 4+%. shold regulations set the rates such that the companies can't pay a dividend? That would lower prices to the consumer.

Just throwing some thoughts out there...


You make some good points. And I am the last person in the world that favors regulation. But in the case of utilities regulation worked since the 30's. Rates were allowed to rise IAW costs to the utility.

The system wasn't perfet but it allowed the Utility kept ample service equipment to deal with electrical outages. A lot of that went away. It may be that distribution costs are allowed to come up sufficient to meet service requirements. We aren't there yet. Maybe someday.

 

[Al]

Originally Posted By: PandaBear

Aren't you and a few others the one that championed deregulation? That's what you get for getting chaos into the system and choke certain part of the grid, so Enron and their project death star can make huge money for nothing:

Not in the Electrical industry I didn't. Again seems counterintuitive for me. But I saw the system go downhill as it was occurring.

And Shannow's post shows that the end result in Australia and the U.S. are the same.

 

[Torino]

Well, the terrorists have to get their money somewhere. John--Las Vegas.

 

[opus1]

Another former utility worker here and I can say the same thing about watching the system lapse.

I remember being in a corporate brainwashing session covering the upcoming changes due to deregulation and heard one of the engineers rip the presenter a new one regarding how these changes were preventing him from maintaining the system. And a lot of what he said has come to pass.

 

[Al]

We had the same bohica meetings. I remember them well.

 

[PandaBear]

Originally Posted By: Al
Originally Posted By: PandaBear

Aren't you and a few others the one that championed deregulation? That's what you get for getting chaos into the system and choke certain part of the grid, so Enron and their project death star can make huge money for nothing:

Not in the Electrical industry I didn't. Again seems counterintuitive for me. But I saw the system go downhill as it was occurring.

And Shannow's post shows that the end result in Australia and the U.S. are the same.


So government regulations are necessary in some cases and are creating values?

 

[crinkles]

Originally Posted By: Shannow
crinkles,
I'm not in any way shape or form justifying the price rises in the following...they plain stink.

Back in the early 90s, the generators were making electricity for 8-9c/kWhr, and the retailers selling for around 12c. The single generating Co maintained enough cash for the next two power station constructions...GST added 1.2c to the 12c.

Mid 90s, we were turned into competing SOCs, required to finance, purchase, compete, and provide a profit.

Look at Mac Gen's last year financial report
http://www.macgen.com.au/Resources/Documents/Annual-Reports/MGWEB.pdf

24,570MWHr produced, and $1.1667B of revenue...i.e. 4.7c per KWhr...yep, half of what we were generating for in the early 90s. It's been an absolute slog, but we're now getting better reliability than ever, at vastly reduced costs...

(Interesting facts nested into the report, of the $1.1667B revenue, about $530M in coal costs, $12M in legacy suerannuation costs, and $187M distributed to fed and state Govts around 30:70)

Where's the extra 4.5c gone ?

Not into savings to the consumer, that's for sure...competition was supposed to drive down prices, and it did, just not for us.

This latest rise to 21c/KWHr is still riding on the 4.7 cents that the generators are getting, but is justified by expanding the poles and wires capacity...when retail sales are DROPPING, because people are cutting their consumption due to the prices.

We've dropped our household consumption 1/3 over the last decade, and are paying more than ever.

The price rises were locked in just prior to the privatisation, and a cynic might argue that they were placed to improve the sales price.


Regular Load Access Fee 98c /day
Controlled Load Access Fee 9.8c /day
Regular Load Unit Charge 26.2c /kW.hr
Controlled Load UNit Charge 15c /kW.hr


What peeves me the most is the "better off" people who own properties can install solar panels, get paid for their feed in, use solar hot water, and in general make changes to their energy use to reduce their consumption.

the "worse off" part of society who generally rent, can't... and are stuck with electric hot water, electric cooking, heating and cooling.

I haven't come across a landlord that will install solar panels so that the tenants can save on their power bills...

 

[Shannow]

Originally Posted By: Al
And Shannow's post shows that the end result in Australia and the U.S. are the same.


As one senior economist stated on the TV during the process..."There is no evidence to suggest that the problems that were experienced in the UK and California are due to the model chosen, nor that they are likely in Australia under that model".

Actually, it was a pretty exciting time to be an engineer, chasing better reliability than ever with lower maintenance costs than ever...we did some good stuff.