Power to the people to gold plate the few

THERE’S a crisis in the energy industry in Australia. Profits apparently don’t seem big enough. AGL Energy reported a statutory profit after tax of $325 million for the six months to December 31 last year, a turnaround of $774 million from the prior period, according to an ABC News report in February 2017.

That might have been around the time I entered into an agreement with AGL which essential caps my payments in a backward attempt to reign in an electricity bill which demonstrates the meaning of ‘to rise exponentially’.

So while the little man tightens his belt, cooks, heats and lights their nights less and less to avoid financial disarray, the energy providers appear to be in a lot less pain, planning, in AGL’S case for a year end profit of between $720 million to $800 million.

Leaving three energy providers to control 90 per cent of the NSW electricity market kind of guarantees they call the shots.

If it feels like we’re being conned, you’d be right.

Price gauging is the ‘gold’ standard.

AGL’S boss Andy Vesey, who was recruited from America, pockets $6.96 million. A poor cousin by comparison, Origin CEO Frank Calabria earns $1.7 million, including superannuation with the opportunity to earn incentives capped at 130 per cent of his fixed salary (an extra $2.2 million).

But if you believe that, there are probably more bonuses in the offing for Calabria considering his predecessor, Grant King, had a take home pay of $7.28 million in 2014 which at the time was a $6.9 million pay rise!

Energy Australia’s chief executive Catherine Tanna has been rewarded with a $5.1 million salary and bonus.

It’s the kind of money people in high places bend over to keep and while I’m all for making money per se, I think remuneration ought to be commensurate with effort.

Meanwhile off Elysium and back on earth, sixty-thousand homes in Sydney face disconnection while energy providers cry poor over fictitious rising coal costs. Perhaps the real reason they’re lining their pockets with money is just to keep warm, bless them.

The Australia Institute, a think tank based in Canberra released the Electricity Update of the National Energy Emissions Audit this month and have given an alternate theory to using money as a blanket, based on real data.

Author of the report, energy analyst Dr Hugh Saddler said: “This year consumers have seen a very sharp rise in electricity price due to generation cost. However, for the last six years price rises seen by consumers were almost entirely caused by network ‘gold-plating’.

Tellingly he concluded from his research: “Electricity consumers are continuing to pay for the policy failures of the last decade in the regulation of monopoly network businesses.

“The reduction in brown coal production in the National Energy Market is being met by increased black coal as well as increased renewable production – notably wind power, which bounced back to record another all-time production record in July.”

The truth is the cost of producing 90 per cent of all Australian electricity has been stagnant or declined over the last decade.

Australia Institute data also shows the Australian energy providers have increased their management teams by 200 per cent over the past 20 years.

The Australian Competition and Consumer Commission’s Electricity supply and prices inquiry which was directed by Treasurer Scott Morrison on March 27, 2017, has received a significant number of submissions made to the ACCC (and are available for viewing on their website.)

Public forums were held in July this year in Brisbane, Adelaide, Melbourne, Townsville and Sydney – but no regional centres made the cut.

A preliminary report is due to the Treasurer by September 27, this month and a final report by June 30, 2018.

In the short term, it’s going to be a long hot summer and another long cold winter then, for many energy consumers in this country who continue to foot management salaries.

No time like the present to get off the grid.

Australia Institute data also shows the Australian energy providers have increased their management teams by 200 per cent over the past 20 years.a