Consumerists and bureaucrats feast on energy consumers

As the present Parliament was drawing to a close one of the uncontrolled government entities, the Standing Council on Energy and Resources (SCER) started to implement an agreement to establish a new qango, a national energy consumer advocacy body, the Australian Energy Consumers Organisation (AECO).  SCER is a regular meeting of energy ministers with a long agenda determined by bureaucrats keen to extend their empires.

Having proposed a new body, it then set about validating its sentiments that this was a good idea.  Cover for the establishment of this bureaucratically pre-ordained AECO was provided by the appointment of two seasoned bureaucrats, former head energy regulator John Tamblyn and former head of the Commonwealth industry department John Ryan.

Lo and behold Tamblyn and Ryan found fresh gaps in the regulatory arena to be filled by drones and activists.

Three existing national regulatory acronymic agencies are supposed to be the consumer proxy.  These include the AEMC, which is responsible for the code of rules under which electricity (and gas) is traded; the AER which determines prices for the regulated assets: and AEMO, largely an operational body responsible for managing the market.  Doubtless we will see no countervailing staff reductions to compensate for the new consumer advocacy staffing and funding.

The SCER set about filling the newly discovered regulatory gaps.  It scoured the world for suitably qualified people but appointed two seasoned consumerists to head up the new agency.  The appointees are Fiona McLeod, the former Victorian Ombudsman, who developed the AECO proposal, and Catriona Lowe of the Consumer Action Law Centre.  Both are veteran campaigners and proponents for their view of consumer interests, on whom the costs of the body eventually fall.

No doubt the newly appointed representatives will now commence a recruitment campaign to ensure they have adequate help available.  Ms McLeod is a past master of this having built a behemoth Victorian Ombudsman of over 120 souls from an agency originally intended to comprise staffing that could be counted on one hand.  Doubtless such empire building experience will stand her in good stead with the new position.

The new body adds to a 13 member “consumer challenge panel” announced last month so there will be no shortage of advice on how to distribute free beer ensure a strong customer voice.

The three national regulatory agencies, AEMC, AER and AEMO, had some justification in that once electricity was privatised some means of regulation was necessary for the monopoly elements of poles and wires.

But there is also a plethora of government financed bodies with acronyms like CUAC, TEC, ATA, PIAC, ACOSS, WACOSS, VCOSS TCOSS and, of course, CHOICE agitating to lower prices and purporting to represent the consumer.

Most of the government financed pseudo-consumer representative bodies put in submissions to the inquiry into the National Energy Consumer Advocacy Body, rightly seeing it as an opportunity to gain increased public funding.  The irony appears to be lost on governments that they are funding NGOs to create pressures on themselves to increase such funding.

As well as the national regulatory bodies and government financed energy advocacy NGOs, most states also have their own independent government/consumer funded agencies that examine and coerce the commercial suppliers.  Victoria has the Essential Services Commission which has commissioned research that purports to show that retail margins have increased in Victoria.  If true this must be either a classic “market failure” since there are over 20 competing retailers, or more likely reflective of the increased costs retailers are stuck with from the plethora of regulations and regulatory bodies they are obliged to finance and liaise with. Naturally the analysis calls for further analysis to see how competition works!

Unfortunately there appears to be a lack of political will to get the regulatory monkeys off the back of the supply industry so the costs will continue to be borne and there will be decisions and regulations (a recent one that discouraged marketing activities like “door-knocking”) that gum up competition.

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34 Responses to Consumerists and bureaucrats feast on energy consumers

  1. Robert Blair

    The energy supply industry needs to make the general public aware of the costs involved to the consumer of all this regulation.

    A footnote on each gas or electricity bill, a separate tally at the petrol pump.

    But they won’t – they are not going to rock the boat.

  2. Tel

    Unfortunately there appears to be a lack of political will to get the regulatory monkeys off the back of the supply industry so the costs will continue to be borne and there will be decisions and regulations (a recent one that discouraged marketing activities like “door-knocking”) that gum up competition.

    If you are talking about the electricity supply chain, there isn’t competition. It is government owned in New South Wales, and they don’t share. The supposed “consumer advocacy body” consists of tax money spent hiring people to tell the taxpayers that they should pay more tax. You have to be freaking kidding me.

    Regulations aren’t gumming up competition, the monopoly known as electricity distribution is gumming up competition.

  3. Aliice

    Soprry Since but I disagree with the thrust of this topic. It isnt the government that is bleeding us dry in energy prices but WHY we need multiple organistaions to handle this is beyind me.
    I would frankly like to see the old fashioned “Department of Energy” back and operating.
    The department of energy no longer exists. Some fool mshut it down and appears to have opened multiple new government “agencies”: who do jack.

    Come on. The energy problem is one that should be overseen by a central authority (which usually falls on the government per Adam Smith). Energy is too big to mess with. We all need it. So I dont agree with you on this one.

  4. Aliice

    Spelling errors only because I get pissed off and impatient with the stupidity that sees no good in government involvement in essentials like energy.
    Sorry but we all are being ripped off blindly by private sector energy suppliers as is their natural inclination.

  5. Aliice

    I am not a fan of the government but we really do need them for some thing slike energy water and freaking roads.
    The bloody idiots have closed themselves down(or someone has) and now they have no skills except to form committees and write suggestions. BS. Its the services they cut (the builders, the electricians, the engineers) we need.

    Useless country this is. In Germany Hitler built the autobahns. Everyone since has maintained the roads. They are one of the greatest exporters in the world while we piss about in the wind, live with potholes and worry and argue about who should do the job – the private or the public sector. This is crap. Lets just get the job done, vote for the job to be done and not worry about it?

    Lets just try to fix the mess, get people to work and producing. We in Australia are putting up with so much inaction and spin its getting ridiculous.

    My thoughts are we have to deeep cleanse the entire parliament to get new ideas in.

  6. Aliice

    Im really at the point where I want some rabid egomaniac to take over like Napolean and just build and build some more. Sick of seeing the untidy state of infrastructure in this country.

  7. John Mc

    We all need food as well, meaning that food production is probably ‘bigger to mess with’ than energy production. God help us if that ends up being overseen by a central government authority. We’ll starve.

  8. Pedro the Ignorant

    http://e-haf.org/PublicFTP/320/AUDIO/Audio_air_raid_siren.mp3

    Uh oh. Looks like the plonk bottle has been upended once too often this evening,

  9. Aliice

    John Mc without energy everything shuts down including food.

  10. jupes

    The question ‘are we better off than we were 50 yrs ago’ was asked on the Cat a couple of days ago.

    Regulation is another example where I believe we definitely aren’t and power generation regulation is right up there with the most ridiculous.

    A sensible government should encourage – certainly do nothing to discourage – the cheapest form of power available. In Australia that is coal.

    Policies about CO2 in relation to power generation are stupid. It makes as much sense to argue how many fairies can dance on the head of a pin as it does to discuss how best to cut CO2 emissions. Both are totally pointless.

  11. Aliice

    Maybe that is true John Mc re coal. Christ we are one of the biggest coal producers in the world. It makes no sense at all to deregulate the coal export industry and yet regulate its use on home turf. Bloody ridiculous and hypocriical. WE, here should get the full benefits of cheap coal until it runs out.
    However I believe we need a department of energy and a department of water and nothing can convince me otherwise.
    This week a major water pipeline nburst in harris st ultimo. Its water flooded a city substation which went bang. Apart from four buildings at a major uni (UTS being balcked out who’s generator whent bang due to the substation explosion) classes cancelled, eveyone out as blacked out. Students in ccity uni accomm are being currently shifted around city hotels. So uni sues government and probably numerous other businesses in sbd sue government.
    The truth is no-one is maintaining vital infrastructure. The private sector isnt and neither is the hopeless committees of government who, in an effort to shrink their waste, started the shrinking at the bottom instead of the wasteful top and have lost immense skills in the proccess.
    A Napolean or a Hitler with an ego to build is what we need now.

  12. Robert Blair

    Aliice:

    I find your arguments … interesting …

    You are right – Hitler did get things done – he saw to the building of the autobahns, the 36 Olympics, the Luftwaffe, the SS, Treblinka, etc.

    Hitler and Napoleon were strong, virile, alpha-male leaders who were ruthless in getting their way. Quite impressive really.

    Tell me about your father Aliice …

  13. Aliice

    Pedro…. either run the siren or shut up.

  14. Aliice

    Oh Pedro I see you did run the siren already. I must have said something you dont like. Tough.
    I might vote for Katter!

  15. Aliice

    Robert – we need one or two of those alpha males I tell you.
    I am sick of driving in congested pot holed roads. I mean even Germany still maintains those autobahns Hitler buolt immaculately and hey they have fines for minimum not maximum speeds on the autobahns (I mean they invented the BMW and the Merc – you have to give credit where credit is due. The Germans are smart and they export a lot and their country size is only small. They put us to shame. We are incredibly stupid here).

  16. Aliice

    What I really object to Robert is the continuing argument over who should build it here ie should it be the private sector or the public sector? Meanwhile while we all fight about who should build it – nothing gets done. That is my complaint. I dont see the private sector swooping in to build an autobahn system because they want a fortune in tolls for an 8 kilometre section of road before they will consider it plus they want whopping directors fees (which get extracted in the early process of any deal) and then on top they want a taxpayer guarantee which the useless shrunken castrated committee left in government happily gives them (ie happily agrees to lousy deals at the taxpayers expense).

    This current system isnt working and you can see why I want some alpha male with” a need to aggrandise themself by building” complex to take over?

  17. ugh

    “Three existing national regulatory acronymic agencies are supposed to be the consumer proxy…AEMC…AEMO,”

    Huh? AEMO are market operators they have absolutely nothing to do with consumers. That’s like saying the ASX is a consumer proxy – it impartially operates a market. The AEMC reviews the operations of energy markets and sets rules that AEMO follows – they also don’t have any consumer proxy role.

    “The three national regulatory agencies, AEMC, AER and AEMO, had some justification in that once electricity was privatised some means of regulation was necessary for the monopoly elements of poles and wires.”

    Only one of those agencies (the AER) actually regulates monopolies.

    “But there is also a plethora of government financed bodies with acronyms like CUAC, TEC, ATA, PIAC, ACOSS, WACOSS, VCOSS TCOSS ”

    ACOSS (for example) has zero ability to control a monopoly. It takes 2 Acts of parliament for the AER to have that power. The only way for consumers to exercise any response against a monopolist like an electricity distributor that overcharges is to move to another part of the state – that’s why they are regulated in the first place. In the case of a transmission monopolist they have to move to another state.

    ACOSS et al can’t facilitate that unless they become cut price realestate agents and furniture movers…

  18. ugh

    “Regulation is another example where I believe we definitely aren’t and power generation regulation is right up there with the most ridiculous.

    A sensible government should encourage – certainly do nothing to discourage – the cheapest form of power available. In Australia that is coal.”

    Amen @Jupes – upstream regulation like the silly ban on coal fired power stations Queensland had (until recently – one thing Newman got 100% right) not to mention the RET, carbon tax et al make a massive difference to downstream prices.

    Now if they could just get the network costs under control imagine how much more competitive the country could be…

  19. Bruce

    a plethora of government financed bodies with acronyms like CUAC, TEC, ATA, PIAC, ACOSS, WACOSS, VCOSS TCOSS

    Why do I get the impression that Mr Abbott will have no trouble finding savings to pay for the hole in the budget?

    Perhaps afterwards they can re-acronymise AECO to stand for Another Energy Committee Obliterated.

  20. Sid

    Reads just like a chapter or two straight from Yes Minister, notwithstanding some of the confusion about the roles and responsibilities of some of the acronym bodies (but hardly a crime as only a Sir Humphrey Appleby can keep it straight).

  21. Tel

    Seriously you guys, do yourselves a favour and go and lookup the price of electricity generation, then lookup the retail price, and rub some brain cells together… then come back and tell me where the money is going.

    No no, don’t sit there and argue, do the research.

    After that, we can discuss things like coal power, ways to save money, blah, blah.

    Regulation is another example where I believe we definitely aren’t and power generation regulation is right up there with the most ridiculous.

    Power generation is not the issue, are we not followers of some Austrian school? Do we not believe in price signals? Go and check the prices.

  22. Crossie

    Im really at the point where I want some rabid egomaniac to take over like Napolean and just build and build some more.

    Aliice, we already have the rabid egomaniac so forgive me if I’m less than impressed by that type.

  23. Crossie

    The irony appears to be lost on governments that they are funding NGOs to create pressures on themselves to increase such funding.

    There is no irony to be lost, the governments who set up these NGOs do so to provide jobs-for-the-boys/girls. They provide cover for increased funding, not pressure.

  24. Louis Hissink

    Alan,

    What’s your summary, then?

  25. Louis Hissink

    And,

    Research the Technocracy movement from the last century.

    Things never change.

  26. Robert Blair

    Aliice:

    I fear your yearning for a Duce to “get things done” is colored by ignorance of how those things really got done.

    Hitler, Autobahns, Mercedes, BMW, German efficiency … a heady mix, no?

    I am reminded of primitive PNG tribesmen in WW2 debating amongst themselves the source of the Allied armies seemingly endless largesse.
    Then they cleared airstrips, put up bamboo watchtowers, and placed palm-leaf aircraft in tantalising positions. Sat back and waited for the goodies-laden transport aircraft to land …

  27. John Mc without energy everything shuts down including food.

    Aliice, if we lose the sun, there’s not much point in arguing about anything. Just shake hands and await our doom.

  28. JohnA

    SCER and AECO… Put the two together and they almost form “scarecrow”.

  29. JohnA

    More seriously, Aliice, your argument is internally contradictory.

    You point out that energy needs strong central authority, but you want a dictatorial alpha male to sweep away the bureaucracy.

    But you haven’t articulated a philosophy of government which can balance that central control with the need for personal, grass-roots freedom.

    All we get with central control then is totalitarianism – which readily panders to, and feeds on, the desire we all have to dominate others. We are all little tin gods underneath our urbane exteriors.

  30. alan Moran

    Yes it is the AER that is the major regulator but AEMC and even AEMO are government bodies responsible for ensuring the industry operates fairly. That’s regulation even though some of it is benign and necessary.

    Electricity is an industry like any other. It is no more and no less necessary than food production and distribution, or petrol supply. It has natural monopoly elements, the poles and wires, that need to have prices and service quality set, in much the same way as is necessary for water supply.

    Beyond that there is no need for regulation and certainly no need for the ubiquitous self-selected and noisy consumer advocates to be funded by forced disgorgements from the taxpayer/customer. Retail electricity has dozens of competing providers as does generation. Both are severely impeded by regulation – generation as a result of governments falling for the pillorying of coal and being influenced by stories that suppliers are seeking to get good prices for their products.
    Regulation costs the suppliers and this is passed onto customers. Governments have shown no leadership in combatting the insidious impacts of the proponents of regulation, many of whom are barrackers for the ALP and so are welcomed by it, and also bribed by the Libs in the hope that they will go easy on them.

  31. Token

    If we are going to have so much regulation, let’s use it to our advantage.

    It is critical that any reform in energy policy includes a requirement that, if the government remains part of the supply of power, the cost of supplying the energy be made transparent.

    Make it manditory in every servo and on every power bill to display the $ & % of cost related to Federal, State & Local taxes. Make it compulsory to spell out the way Green levies imposed by government increase the cost. They do this with food labelling.

    That way sly increases in power costs will be met with the same resistance that increasing income, company or consumption taxes.

  32. Aliice

    John A says

    But you haven’t articulated a philosophy of government which can balance that central control with the need for personal, grass-roots freedom.

    No I admit I havent John but I wish someone would. I dont want totalitarianism any more than you do but I dont want to live in the debris of failed infrastructure when I am trying to get to my job either.

  33. Alex

    Even aside from the regulatory bodies, there are 27 government funded (including partially funded/taxpayer subsidised) consumer representative organisations, 6 of which operate at a national level. I therefore find it hard to believe there is a need for a 28th, at a cost of $4 million or so.

    What is this body going to do that the 27 existing organisations can’t or won’t do and how will they know what those consumers actually want?

  34. wreckage

    If consumers want something they’ll buy it.

    There’s only two things to demand on consumers behalf: cheaper stuff, and more of it.

    Done. I’ll have that $4 million now, thanks.

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