How power companies undermine Australia’s climate strategy.

It seems that my electricity provider Origin (among others) intends to increase its green power prices by the same amount as black (carbon-producing) power when the carbon price kicks in.

Green energy customers are buying a product which does not produce carbon emissions, and the vendor is telling them that its price has increased because of the charge on carbon emissions. That is untrue and deceptive. Further, it means they are effectively subsidising their black energy customers by charging green customers a portion of the extra cost of producing the black energy they do not use. This is is counter to the purpose of the carbon price.

If there will be no closing of the gap between green and black electricity prices, there will be no added financial incentive (or at least reduced disincentive) to choose the green option. This defeats the central market mechanism of the carbon price as far as consumers are concerned.

If power companies are allowed to pass on the carbon price to consumers without regard to the source of the power they are selling, then they are imposing a detriment on green energy customers; further, they are misleading those customers if they ascribe across-the-board price increases to the carbon price.

Most importantly, as electricity pricing is a major plank of the carbon price, this pricing policy could seriously undermine its effectiveness.

The remedy is the enforcement of regulatory or legislative controls to ensure price increases are restricted to products directly affected by the carbon price, and only insofar as they are affected. For example, it would be legitimate for green energy prices to rise marginally in line with higher delivery costs, but not holus bolus along with the price of black energy as is proposed.

While we’re waiting for that to happen, we could look for companies who don’t intend to do this, and switch. Do you know of any?

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