Monday, March 15, 2010

Power Prices Punish The Poor

It’s no surprise that more people are calling on the New South Wales Water and Energy Ombudsman for help because they are concerned that they face having their electricity disconnected. It’s no surprise that more people than ever are entering into bill extension or payment plans with their electricity provider. We have been told loud and clear to expect the price of electricity to keep going up, regardless of the lack of similar increase in our income and our capacity to pay. We have been subjected to a softening up process to convince us that rising prices are not only inevitable but they are justified.

It’s true that there are genuine cost pressures behind the price increases. Even without considering the impact of climate change policy, which won’t kick in for another few years anyway, there is the reality that energy infrastructure is in desperate need of renewal. Older facilities need to be replaced, and newer ones need proper maintenance, just to keep up with current demand, while demand itself is also increasing. Over the years, state governments have happily taken massive dividends from state owned utilities without reinvesting in future capacity, or even in some cases adequate maintenance. As a result, prices will have to go up just to pay for the upgrades that should have already been in the pipeline.

Already this is resulting in more people than ever before struggling to pay for their electricity needs. We have all been told that we need to do more to become energy efficient, by turning off the lights, investing in more efficient appliances, and cutting back on the use of air conditioning and heating. That way we will save ourselves money, as well as reduce our carbon footprint. But it’s tempting to ask why should we have to? Shouldn’t the government have managed our utilities better? Shouldn’t we be able to enjoy the benefits of 21st Century technology? Why should we have to inconvenience ourselves because our governments and their bureaucrats haven’t adequately planned for the future… a future which is now on our doorstep?

Of course, it’s only sensible to stop being wasteful and to save ourselves some money by becoming more energy efficient, and there’s nothing wrong with that. But for the most vulnerable people in our community, the people with the lowest and most uncertain incomes, the options are not so many. If people are already forcing themselves to get by on two light bulbs and a toaster oven, and finding it difficult to pay the bill, what more do they sacrifice? Pensioners have been stretching their budget for years and can just barely pay their bills now, so what are they supposed to do when their power bill goes up by 20, 30 or even 40% over the next few years?

Part of the problem is the failure by the authorities to adequately plan for the future needs for the community. Part of the problem is the wave of privatization which has overwhelmed political thinking. And part of the problem, if we are to be completely honest, is the sense of entitlement that we all have to enjoy the benefits of our big screen TVs, dishwashers, and air conditioners. Nevertheless, we confront a future of growing inequities with the less well off becoming increasingly marginalized and dependent upon charity for survival. That’s not fair, it’s not just, and it’s not the Australian way. But it appears to be exactly where we are going.

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