Power costs mean consumers must get used to shocks

It passed with little notice locally, but last week, the ACT decided untrammelled competition in the electricity market was bad news for its consumers.

Rather, it opted to maintain the status quo. Not that it had much choice, since an earlier review of competition for smaller electricity users in Canberra found that it was non-existent.

In NSW, the rebate for households who can’t pay their bills is already a burden on government coffers, with 730,000 receiving the rebate at present at a cost of $175 million a year. The bill is likely to be closer to $250 million a year by the end of the four-year budget forward estimates period as the surge in power prices push more families into hardship.

As an ”essential service”, simply allowing electricity to be cut off to poorer households is not an option. But new approaches to addressing the issue may be needed.

”We’re looking at the concept of a ‘social tariff’ so that people caught up in this could access a changed rate, giving them protection from ongoing rising prices,” Carolyn Hodge, a policy officer at the Public Interest Advocacy Centre, says.

”This may help keep people connected. Electricity is an ‘essential service’ after all.”

Read the full story: http://www.smh.com.au/business/power-costs-mean-consumers-must-get-used-to-shocks-20110912-1k5yz.html#ixzz1XtdJpjGY

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