5 reasons you may be paying too much for electricity

An older topic. Some pundits admire good business sense that maximises shareholder value and others wring their hand about outrageous behaviour. Whether one accepts the position in this report or not it may demonstrate how badly failed selling off critical assets was and remains.

A sixth reason to add to the original 5 in the topic, capitalistic opportunity.

Whether there is catch up or the grid needing upgrades there is a difference between the column titled (re)investing in the business, and that titled profit/loss and dividends.

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The charges and hence profits available to the network distributors are regulated by the AER through a RoR (Rate of Return) Instrument.

A spokesperson for the AER is reported saying,

“The incentive schemes in place under the regulatory framework reward networks for improving productivity and service performance beyond benchmarks,” the spokesperson said. “This ultimately provides benefits to customers in the form of lower prices and superior service levels.”

It would serve us consumers to actually see the numbers which support this statement. They all derive directly from the RoR Instrument, real data and calculation. A new RoR Instrument applicable for the 5 years from 2022 was issued in Feb 2023 (plus an Aug 2023 revision). The profits and assessment in The Guardian relate to the previous periods in effect for the 2017 and prior RoR Instruments.

The article refers to the QLD distributor Ergon as one of the guilty parties. The other Qld Govt owned distributor Energex escaped mention. There is a QLD Government subsidisation mechanism that transfers income from Energex to Ergon. There is further regulation of the Ergon distribution region electricity charges through the QCA (Queensland Competition Authority).

I’ve some doubts that what is being presented has been delivered in context. The report needed to clarify how it has been for each each distributor. It’s also relevant to include the differences in ownership and capital commitments.

The intricate relationships between governments, business and government appointed authorities (AEMC, AER, etc) ensure all is as it should be.

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