Good for the State as a Whole

"Big power bills are only the start" trumpets the headline (The West, 25 Feb 09). Robert Taylor points out, in his opinion piece, that "WA residential electricity prices have not increased since 1997-98." Let's assume that Taylor is correct.

Why was Western Power -- the big, all-in-one, power provider -- split into four?

• The loss-making networks -- remote communities, Aboriginal communities, dispersed rural groups -- can all go to Horizon Power. The federal government can be embarrassed into funding most of those, so WA can pay less.
• The metro delivery service -- the ones charging the consumers -- will have their charges fixed. So consumers -- ie voters -- will pay no more.
• All losses will be passed to Verve. That gives us an excuse to allow private enterprise into power generation: surely private enterprise will not make those huge losses!
• Then we up the price of electricity to consumers. And the extra money is passed on to the generators. Too late to help Verve -- but certainly a bonus -- an expected bonus -- for the new, private enterprise, electricity generators.

So it's a blatant market bias, to allow private enterprise to move into electricity generation.

..o0o..

Thinking Lateral
Need new thinking for your own problems? email nick leth at gmail dot com

Then there's the line from Robert Taylor: "that's got to be good for the State as a whole."

Good for the State as a whole! Good how? No, not to worry, I can answer that one...

Domestic electricity consumers -- households -- pay more for electricity. Businesses pay less for electricity. Businesses make more profit, shareholders -- here, interstate, overseas -- make more money. Some of that money is spent in WA. So WA businesses get a small increase in their business. Which allows them to hire extra staff... who can now afford to pay for those increased electricity bills.

Whoop-de-do! We pay more for electicity in the hope that we will get a job so that we can afford to pay for our electricity!

Here's a better idea:

Raise electricity charges by 10% instead of 25%. Raise electricity charges to industry by the same amount. Use the profits to pay Verve to upgrade their power stations. Use whatever tricks would be expected from private enterprise, to reduce costs in Verve. If this is "not possible" -- sack the current directors and hire people who know what they're doing.

Every time we divide and recombine, we get promises of savings and actual losses. Let's stick with what we have -- and actually make it work.

..o0o..

Independent Thinking
Independent analysis of your problems by Agamedes Consulting. Support for your thought: email nick leth at gmail dot com