CHOICE membership

Utilities Following in Bankers Footsteps? As is Government

The coalition continues to push back and reject the need for an RC into the utility industry. Shades of the banking RC. They must be shaking in fear at what might be exposed. It looks like ALP is standing back too, hoping for a point. Ah government (and opposition), a club for the boys who are all right, Jack.

edit: adding


Could be time to follow Iceland’s move… sack the Govt and rewrite the Constitution… maybe even throw in a Bill of Rights for good measure.


It could be worse?
What can happen in a totally unregulated free market.
The user pays!

Not quite understanding the politics of Texas, it last snowed big time across the state ten years back. Similar sort of frequency to some parts of Australia being hit by cyclones or bush fires these days.

At least for now Australia has some form of market regulation. And a promise from the highest level of government electricity is going to cost less. Well, a politicians promise and smile for a guarantee.

It isn’t clear to me that the excesses in this situation are solely due to lack of regulation. My understanding is the huge bills were on payment plans that exposed the user directly to the fluctuations in price of the spot market. When unprecedented demand collided with slashed supply the price went astronomical.

Are the users required to have such a plan or can they choose a fixed price schedule that varies with time of day as in Oz?

Does regulation in Oz forbid the plan where you pay the spot price or is it that no vendor has chosen to offer it?

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Regulation of the market pricing. Regulations that impose reliability standards. Regulation that requires spare capacity or redundancy. Regulation that sets performance standards for extreme cold weather events. There are multiple elements, as well as the actions or not of the State, in not acting on the lessons learnt from a similar prior cold snap ten years prior.

The privately owned generators in Texas have been able to retain an unregulated market. They do compete with each other similar to the NEM in Australia based on price. The difference is there are is no regulation on the minimum or maximum price. In comparison the NEM in Australia has a cap on the wholesale price.

Customers do have the choice of fixed rates or rates tied to the wholesale price. (All linked to the original ABC news item).


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We have a few newcomers to our electricity market that tout their retail markups are slim above the spot wholesale costs, and tied to same. Texans have ‘enjoyed’ that option for years but are now seeing how good it can be. Need power during the peak ‘it hit the fan’ moments and the costs can drain your account in moments.

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Yes, gas and many renewable generators don’t make any money at the current average wholesale price. They make most of the money when the spot price peaks due to high/peak demand periods such as very hot days or when a generator is unable to supply to the network.

Some gas generators in the past have also sat idle until such time where spot prices peak, as they can make more money in the few hours from time to time than running 24/7.

The US appears to have a contestable energy market place. Contestable energy market also exists in Australia and many moderate to large users are within the contestable market.

Whether it is beneficial for small and domestic consumers is questionable as these users often use more electricity when spot prices are higher, and less when spot prices are lower. This means that these users on average pay significantly more than the average spot price for power. If a user generally follows the demand profile on the network or uses mostly when spot price is low, there can be significant savings to the consumer over regulated tariff pricing.

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But are there plans offered that have a fixed price schedule? What I am getting at is does the consumer have a choice to be protected from mad spot prices (but many choose to roll the dice) or is there no choice?

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Both. Many consumers are attracted by the siren of low costs and do not understand the rocks.


Then like those who choose not to buy insurance they need to self insure. You pays your money and takes your choice.


Would ‘you’ believe an Australian connection? The ‘millionaire factory’ is in it.

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Scary isn’t it how some are happy to use the bad outcomes we all suffer to put money in their coffers…Insurance does it all the time so I guess why not others?