TiP

Here’s a powerful message for journalists trying to compare electricity bills between householders in different States: stop wasting your and your readers’/viewers’ time.

I am drawing the admonition from the expert panel that has been looking in to Tasmanian electricity supply for the State government.

Chaired by Australian Energy Market Commission chairman John Pierce and including his predecessor, John Tamblyn, the panel has been inundated with the views of people who can point to friends or family on the mainland whose bills are lower than “typical” Tasmanian ones.

Their argument is that Tasmanian residential prices are substantially high, but, in fact, says the panel, they are “somewhere in the middle of the pack.”

And the State government is not using residential charges to cross-subsidise large industrial users, another favourite conspiracy theory.

The Pierce panel, in its report to the Tasmanian government, says: “Arriving at meaningful generalisations about relative electricity prices between States for different classes of customers with different usage profiles is a difficult, if not impossible, process.”

In Victoria, across Bass Strait, the panel points out, where customers have access to up to 12 energy retailers, tariffs vary from as little as 19.4 cents per kilowatt hour to 27.8c – with “Greenpower” users paying 30c – compared with the 25.1c flat rate in Tasmania.

Media reporting generally of power bills is getting worse, I think.

Two weekends ago, when I saw “splashed” in a weekend Sydney tabloid newspaper a claim that the average NSW residential bill is $2,484 per year – which the reporter saw as “startling” and compared with South Australia, which she said had average bills “closer to $1,600.” – I thought it another example of poor reporting and said so in passing in one of my “This is Power” posts.

Now I have seen the number repeated in one of our major daily newspapers with the writer clearly borrowing from the tabloid story. This “fact” i on its way to becoming received wisdom in the media — and of course, as a result, in the suburbs.

Well, the comparison would be startling if it were true, but it is not – by a long way.

No-one has to guess about average electricity bills in the States.

They have been set out the report the AEMC under Pierce compiled for the energy ministers’ committee of the Council of Australian Governments and published last December.

They are starting to change already, of course, as new regulatory determinations begin to emerge, but, for my purposes here, let’s stick with the published numbers.

The NSW average residential price for 2011-12 is $1,672 and AEMC expects it to rise to $1,809 in 2012-13.

South Australia, as that was the tabloid reporter’s comparison of choice, is $1,304, rising to $1,376.

Queensland is $1,544, rising to $1,691, although that is likely to change because the new Newman government intends to intervene to freeze the standard tariff.

Victoria is $1,499, rising to $1,580.

Tasmania is $1,620, rising to $1,675. The bills have doubled since 2000.

Western Australian, where residential prices, as the State regulator has just pointed out, are still far from being cost-reflective despite a rise of 57 per cent over three years, is $1,621, rising to $1,844.

While it is the cost of the actual bill that hits home to a householder, these vary a lot depending on location.

Victorians, for example, use less electricity than those who live in NSW because a long period of cheap gas prices has seen most Victorian homes (81.1 per cent) connected to the fuel compared with 37.5 per cent in NSW.

The comparative use of gas is greater when only Melbourne (92.4 per cent of homes connected to mains gas) and Sydney (45.7 per cent) are taken in to account.

South Australia also has a higher usage of gas – because it has long had a pipeline bringing the fuel to the Adelaide/Elizabeth main load centre from the Cooper Basin.

The AEMC comparisons show that tariffs in 2012-13 are expected to average 25.22 cents per kilowatt hour nationally (and will shift with political decisions).

WA will have the highest tariff at 30.39c (well up on 20.96c in 2009-10).

On the east coast, South Australia will be the highest at 27.53c (up from 20.98c in 2009-10), followed by NSW (25.86c up from 18.55c), Victoria (24.32c up from 19.2c), Queensland (24.16c up from 18.26c) and Tasmania (22.76c up from 18.17c).

Rural prices are above the average because the regions get charged more for network services (longer distances).

Thus, as AEMC reports, Essential Energy (Country Energy until the Keneally government sold its retail arm) has had an average residential tariff in 2011-12 of 27.32c compared with 23.9 for Endeavour Energy (the former Integral Energy serving western Sydney, the Blue Mountains and the Illawarra) and 22.23c for Ausgrid (the former EnergyAustralia, servicing the heavily urbanised suburbs of central and north Sydney and the Central Coast).

South-east Queenslanders subsidise their rural and regional cousins in the other 97 per cent of the State and West Australians served by the south-west integrated system (SWIS) subsidise regional prices too.

The AEMC breakdown of the percentage cost of various parts of the supply chain shows that transmission and distribution contribute 10.39c of the national average residential tariff of 23.75c in 2011-12.

In Queensland networks in 2011-12 make up 12.24c of 22.06c State average while in NSW it is 11.67c out of 23.9c and in Victoria (a much smaller area to service) it is 7.07c out of 24.32c plus an extra 1.57c for metering as the State rolls out smart meters.

In South Australia the networks figure is 11.15c out of 26.09c.

Tasmania (also a small area) has a networks tariff in 2011-12 of 10.98c out of an average household charge of 22.01c.

The point, of course, is that household prices don’t lend themselves to simplistic comparisons across State borders, let alone inaccurate ones – and there really is no excuse for inaccuracy when the AEMC’s data are available on its website for all to see.

As I have reported before, modelling compiled by Ausgrid (and to be found on its website) shows that NSW and Queensland homes have the highest use of electricity on average in the land (more than 7,000 kilowatt hours a year) and, of the mainland States, Victoria has the least (5,700 kWh) with South Australia a shade over 6,000 kWh.

On Ausgrid’s numbers, medium-sized energy households in Sydney and Melbourne, where people have access to both gas and electricity, shell out an average of $2,264 and $2,373 a year respectively for domestic energy.

This is a comparison of a Sydney home using 5,900 kWh of electricity and 20,000 megajoules of gas with a Melbourne home using 5,100 kWh of electricity and 52,000 MJ of gas.

The problem, of course, is that the space-poor tabloid writer wants to convey an impression in a single “startling” sentence where a good job of putting all this together requires about 1,200 words.

The fact that the “startling” comparison is in essence invalid is not going to get in the way of a “good story.”

And the “shock” report resonates with Sydney readers of the tabloid because householders are wrestling with paying for energy, petrol, telecoms, council rates and so forth and finding it all a bit of a struggle, as the public polls are throwing up in focussing on “cost of living” as a major political issue.

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