On the facile front

This is a banner year for the armchair jockeys.

It is so much easier to manage a market or a company, to design a policy, to regulate an industry or to run multi-faceted industry associations from a comfy chair than it is in real life and the jockeys in the energy field are absolutely spoiled for choice at the moment.

It’s risk-free, too – no pesky customers, shareholders or voters to hold you to account.

“Facile” is the adjective that springs to mind most often when I contemplate the jockeys – offering allegedly neat and comprehensive solutions by ignoring the complexities of an issue is the dictionary definition.

Being “facile” is infectious.

It spreads from armchairs to news-sheets and current affairs programs and in to the corridors of parliaments and ministerial offices, as illustrated in the current national debate by examples too numerous to canvass.

The jockeys can expect, and do get, lots of media attention because they offer “color” and controversy, the staple ingredients of 24/7 news coverage.

“Gouge” and “goldplate” and “gaming” resonate with listeners and readers while the explanations from service suppliers don’t meet the “30-second grab” test.

Fortunately, there are also more than a few people out there trying to keep lights burning on the hills and in the valleys.

They are to be found in some NGOs and think tanks, some consultancy services, some government departments and at least some ministerial offices as well as in companies.

Toss aside the “they would say that wouldn’t they” contributions by the commentariat to current reviews – to the Senate select committee on power prices, the Climate Change Authority on renewables and the Australian Energy Market Commission on energy regulation to name three – and there is a fair amount of genuinely hard thinking on the current record about issues that will impact on the security, affordability and environmental quality of our energy supply over the next decade or even two.

I find it amusing to hear the armchair riders reacting to such detailed contributions by complaining that they and their followers are being “drowned in a sea of boring documents.”

It is so much easier to free-wheel across the wave tops, flinging off insults, assertions and “clever” ideas with abandon, than to struggle to find a sensible port.

No less amusing is the complaint that large energy supply companies, operating multi-billion dollar businesses with millions of customers and large numbers of shareholders, have the temerity to dedicate substantial teams of staff to addressing the key issues, thereby unfairly wearing down those “outside the club.”

It is less cause to smile when a politician like Senator Nick Xenephon buys in to the first public hearing of the Senate committee on power prices with a question/assertion about the remuneration of major company CEOs as a factor in the unhappiness of household customers over more expensive bills.

Xenephon has a sharp mind and there many examples of him bringing it to bear on issues.

Here, he is simply playing to the gallery and I wish he had been asked in return whether (a) he expects major companies to employ lowly-paid CEOs to manage major parts of a key service and (b) if he has paused to think about what a tiny fraction of householders’ bills is represented by their individual share of even the largest executive pay packet?

He, and members of the select committee, also need reminding that the main issue about which Julia Gillard’s government, who set them on this task, is complaining – the current outlays on networks – flows from politically-motivated efforts a decade ago to hold down electricity prices by keeping delivery capex as low as possible and now by regulators permitting large outlays when faced with surging demand (most certainly the case in 2007-08 when bids were being made and determinations handed down for 2009-14), high reliability standards (set by politicians) and the threats to security from a lot of aged equipment.

Not to mention a drive by consumers to acquire air-conditioning and other energy-intensive gear, thus contributing to the most expensive capex need of all – power demand peaks.

To which, of course, needs to be added the political actions with respect to renewable energy, including the rooftop solar schemes, universally badly planned and implemented, and the carbon tax.

Easier by far to be populist and facile than to confront the tough questions raised by all these issues.

However, it is also easy to lose sight of the fact that, amid the armchair riders’ attention-seeking stridency, the hard yakka on power issues continues to be pursued.

I understand the nation’s resources and energy ministers are bringing forward their meeting under the CoAG umbrella to November to enable them to feed recommendations to December’s meeting of first ministers, driving their public servants and advisers still harder to complete their current work.

Meanwhile, in Victoria today, the Baillieu government has taken another step towards one of the most important aspects of addressing household power pain: it has introduced a voluntary flexible pricing plan to provide residential users with more options than paying a flat rate for the electricity they use.

At present 12 per cent of Victorian households and 20 per cent of business customers already access flexible electricity rates.

Under the State government approach, just announced, customers can try the flexible pricing system and back out again if they wish.

Energy Minister Michael O’Brien is pointing out to them that they already make use of peak and off-peak rates in services as diverse as public transport, flight tickets and telephones.

The electricity infrastructure system is currently inefficient, O’Brien notes (a point that applies across the country, not just in his State), with a quarter of the Victorian power system in use six days a year.

Research earlier this year showed that Victorian householders are wasting $200 million annually by failing to plug in to the cheapest power deals available to them in a highly competitive local market and that 700,000 account-holders, about a third of the total, are still on the most expensive charges.

Energy Retailers Association CEO Cameron O’Reilly made an important point when he appeared before the Senate committee in Sydney yesterday: the best way forward on the east coast is through a competitive market and greater consumer education, facilitated by technology like smart meters, not through heavy-handed price and other regulation.

The armchair jockeys to a large extent don’t want to hear this because, regardless of what they may claim, their bent is towards government command and control in order to achieve their ideological choices relating to carbon emissions and “distributed generation.”

From where I am sitting, now retired from 33 years in the engine room of energy industry issues management, the companies and their representative associations need to do more than rev up their messages when government and parliamentary inquiries are being held.

The current crop of submissions demonstrates that there is a major amount of useful information available from the supply business, however “boring” some may find it.

Suppliers need to package this better and to do a great deal more to communicate with the consumers/voters rather than leaving the field to the armchair riders as much as has been the case in recent years.

Objective observers know that a lot of engineering and technology management in Australian energy supply is world class – and the industry’s communication skills need to be of the same standard.

Comments are closed.