7.30 Qld interview on asset leases and power prices

I featured in Eric Tlozek’s excellent story on the proposed leasing out of electricity assets on 7.30 Queensland last night:

Government powers up to sell state asset leases

I come in at around 3 minutes, 20 seconds, after the Opposition Leader. The main points I made were:

  • if the assets are leased out, electricity prices are likely to be lower than they otherwise would, because privately operated assets would be run more efficiently, and
  • the Government needs to provide more information on the relative benefits and costs of asset leases to the public, given that it’s clear people are worried about adverse impacts (e.g. on jobs, power prices and service reliability).

Well done to Dr Liam Wagner from the UQ Economics School for his insightful analysis of the potential impact of asset leases on the cost of electricity supply. I particularly liked his discussion of how private operators would save money by spending on capital only where there is a “burning deck problem”.

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5 Responses to 7.30 Qld interview on asset leases and power prices

  1. Katrina Drake says:

    I experienced my first every case of serious “bill shock” this week, when instead of my usual quarterly electricity bill of $270, I received a monthly invoice for $1,750.

    The blood drains from your face, you feel cold, nauseous, your heart palpitates, your pulse thumps, your hands shake uncontrollably, you are left breathless and speechless. The call centre voice drones on and on in your head – incessantly, ” I am sorry, there is nothing you can do about, you just have to pay “.

    Visions flash in front of your eyes of what $1,700 means to you – the airfare for your kids to come home for Christmas, a years dancing fees, 6 month electricity bills, your annual holiday . Vision of the people that “bill shock” like this might mean homelessness, hopelessness and desperation.

    In the electricity industry there is meager consumer protection in place to protect the ordinary household consumer from “bill shock” , no warnings, no sms alerts, no caps – just whammm ! There is no insurance that covers it, no gadget to protect against it, electricity providers who refuse to acknowledge its existence, let alone take any actions to avoid it. You have to experience “bill shock” to know what it feels like ……. indescribable .

    Get ready for it Queensland ……

    • Gene Tunny says:

      Katrina, I take your point about consumer protection, but this is a separate issue from leasing out the poles and wires. But there will certainly be a scare campaign around this point. Thanks for the comment.

    • sgddg says:

      What are you using so much electricity for? My last bill for three months was $60.

  2. Katrina Drake says:

    Actually, I don’t see it as a separate issue. Leasing just increases the number of private companies trying to suck bigger profit out of infrastucture the public already own. If anyone seriously thinks leasing is going to lead to cheaper prices, then they will be living in the dark. In 35 years of paying electricity bills I have heard lots of promises of cheaper prices, but never seen a lower energy bill, ever.

    The industry is full of rorts, offering discount solar feed-tariffs, by raising the base tariff 11. Antiquated metering equipment that encourages increased use, not reduction, as it is not in the suppliers interests to reduce demand.

    Most people just pay the bill, not realising that they are being rorted on so many levels, and the government is planning on putting more sharks in the tank !

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