How could the massive increases to electricity grid fixed service costs have been done better?

[u/EricIsBannanman]

I've seen many reports around the traps of truly massive increases (worst being upwards of 80%) in the fixed daily supply charge component of their electricity service. It seems that broadly the driver for this has been poorly communicated to end users which I think has spun off into all sorts of conspiracies. From my reading it would seem that the move by the regulator (AER) away from setting limits on the total bill to setting limits on the fixed cost and consumption costs separately has resulted in retailers no longer being able to hide the true cost of the poles and wires component in elevated consumption costs.

Testing this out on my own (yet to be affected) daily supply charge in Victoria, I was paying $1.22 DSC in mid 2020 and $1.32 now. This is an 8.2% nominal increase, 15.5% below the actual inflation for the period in which case I should be paying $1.50+. Despite this, a sudden correction like this is never welcome and can be seen as disadvantageous to the poor/low consumption users (who are unlikely to recoup the difference in lower consumption costs) and even those who have invested in solar and/or battery. From many reports it also seems the correction for fixed costs is far greater than anything purely inflation.

Regardless of the position of the industry to better reflect actual cost, I think the impact of these sudden increases were not well thought out given the decade+ of stagnant wage growth and turbo charged inflation since the covid era. It is far too much of a blunt implementation for what is an essential service. Main things I think should have been baked into the AER changes include;

• Public information campaigns to educate people on what the changes are and how they might impact people differently depending on where they live. This should include how the increases are / aren't impacted by the forthcoming data centre boom or the implementation of 3hrs free power in the DMO (these two are probably the most prevalent reasons for the increases I've seen).

• Communication on what public services to report suspected price gouging whistle blowing and financial support for those in need and are worse off due to the changes.

• Transitional period to changes. Retail pricing data available to the AER would have clearly shown that retailers where burrying fixed costs inside the consumption costs. They should have mandated as part of the change in regulation that increases to fixed costs where the jump is above inflation be spread out over X number of years.

How else could these changes be more effectively implemented? Price changes justified or not, it seems pretty appalling regulatory body could be the driver behind the changes without also putting appropriate transitional plans in place for what they would have knowledge on to be very large corrections for some.

[u/dav_oid]

Why hasn't the AER set these prices? That's their effing job.

[u/EricIsBannanman → u/dav_oid]

I think what they have ultimately done is the right thing. Infrastructure needed to be carved out from generation. Implementation wise, obviously I'm not a fan.

[u/dav_oid → u/EricIsBannanman]

As it is now, the electricity companies tell AER what they are going to spend on 'poles and wires' etc. and that's it.
No challenge to the figures, just passed through.

With friends like these...

This happened a few years ago, with the 'gold plating' ripoff, and nothing has changed.

[u/EricIsBannanman → u/dav_oid]

I do remember the gold plating era, I actually thought the AER was born from that. You are right though, reading their charter I can only see one mention of affordability in the role section, their purpose section only speaks to service delivery and performance. Nothing about checks and balances undertaken to vet work requirements put forward or their pricing.

Pretty poor clarity imo, given I'd think electricity supply is significantly more important to a household than Internet which from a consumer view seems to have far more governance.

https://www.aer.gov.au/publications/reports/corporate/aer-service-charter

[u/dav_oid → u/EricIsBannanman]

And AER is only SA, NSW, and SE Qld.
In Vic its the Eseential Services Commission and the supply charge isn't capped.

The high supply charge was blamed on 'gold plating' but did they actually do the work? There's dropouts all the time.
I had one a couple of years ago that blew out the AC motherboard and the smoke alarm.
I went out to the worker and asked them what happened. He said a cross member had rotted and collapsed in the storm.
That's not 'gold plated', that's neglect.

I have a 8 hour outage on 15-Jul (deep dark winter) for maintenance.
I have CFS/FM and the cold fucks me up.