Electricity bill stress to get even worse, after privatisation

Tuesday 31 Jan 2017

An Economic Regulation Authority report, released today, shows electricity affordability is becoming an increasing problem for a growing number of West Australians, with 1 in 10 people now needing more time to pay their bills.

The 2016 Annual Performance Report examines the performance of energy retailers that supply small use customers in Western Australia, with the aim of increasing transparency and accountability to the performance of energy retail businesses.

The report notes that “the deteriorating economic conditions during 2015-16 has seen an increase in electricity and gas customers seeking assistance from their retailer, and more direct debit terminations due to default.”

11 per cent of residential customers were granted more time to pay a bill, up from 8.7 per cent in 2014-15. The proportion of business customers receiving a payment extension was also higher, up from 5.0 per cent in 2014-15 to 7.1 per cent in 2015-16.

Synergy reported a higher percentage of customers granted more time to pay in 2015-16. The residential percentage increased from 8.9 per cent to 10.9 per cent, and the business percentage increased from 5.1 per cent to 7.0 per cent. Synergy commented that 2015-16 was a difficult year for residential customers, with increasing demands on their disposable income due to a decline in economic conditions.

The report also shows that Alinta Energy, which was fully privatised by Colin Barnett and is now 100 per cent foreign owned, has the highest percentage of customers struggling to pay their bills on time, with 16.1 per cent of their residential gas customers (up from 10.9 per cent in 2015-16) and 20.0 per cent of business gas customers (13 per cent in 2015-16) granted payment extensions.

These figures paint a clear picture of a state that’s doing it tough at the moment. The “deteriorating economic conditions” as the report puts it are having a direct impact on families and businesses. The spike in Alinta Energy’s payment extensions is a worrying omen of what WA families are likely to experience if Western Power is privatised. With Alinta Gas now leading the pack in terms of unaffordability, how can Colin Barnett be trusted when he says that electricity prices won’t be affected under his plan to sell Western Power?

The pressure placed on regulators and families as the owners of private utilities push to maintain current profits and increase where possible is immense. Do we really want to head down the path towards becoming the next South Australia or Victoria, who are already experiencing the reality of privatised electricity providers?