Energy Affordability
Tariff and Concession Framework Review
Aden Barker
Office of Energy
Energy Affordability – TCF Review
Session Overview
1. Who we are – Office of Energy
2. The Tariff & Concession Framework
Review
3. TCF Review Findings
4. Some TCF Review Conclusions
1. The Office of Energy
Who we are:
“The Office of Energy leads the
development and implementation of
policy and programs to meet Western
Australia's energy needs”.
1. The Office of Energy
What does that mean?:
Policy advice on:
•
•
•
Consumer protection
Consumer price impacts
Energy concessions
Coordination of Programs:
•
•
Hardship Efficiency Program
Fridge Replacement Scheme
2. The Tariff & Concession Framework (TCF) Review
Considering ways of charging for electricity and providing
concessions to:
1.improve the affordability of essential electricity use;
2.facilitate the equitable, efficient and full recovery of the cost of
supplying electricity;
3.provide clear information to consumers regarding the impact
of their electricity use; and
4.provide targeted assistance for those who most require it.
2. The Tariff & Concession Framework (TCF) Review
How did we do it?
• Public Consultation
• Tariff and Concession Modelling
• Household Energy Characteristics Survey
2. TCF Review - Consultation
• Issues Paper (88 submissions)
• 9 Regional Consultation Sessions
• Project Reference Group
2. TCF Review - Consultation
Major issues Raised:
• Energy Affordability
• Inclining Block Tariffs
• Concessions
• Energy Efficiency
• Defining Essential Energy use
DISCLAIMER
3. TCF Review - Findings
Putting it into Perspective
Perth Index of Selected Household Goods & Services
600
Average
earnings
Standard
Pension
Food
500
Milk
Bread
Beer
300
Electricity
200
House
Fuel
100
Rent
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
0
1990
Percentage Change
400
3. TCF Review - Findings
Putting it into Perspective
Personal care %
2%
Recreation %
12%
Transport %
11%
Miscellaneous goods
and services %
6%
Current housing costs
(selected dwelling) %
20%
Domestic fuel and
power %
4%
Food and nonalcoholic beverages %
21%
Medical care and
health expenses %
5%
Household
services and
Household
operation %
furnishings and Clothing and
7%
equipment % footwear % Tobacco products %
2%
3%
5%
Alcoholic beverages %
2%
(ABS)
3. TCF Review - Findings
Putting it into Perspective
12
9,000
8,000
7,000
8
6,000
5,000
6
4,000
4
3,000
2,000
2
1,000
0
0
2006/07
2007/08
2008/09
2009/10
% Disconnections
% Installment plan
% Additional time to pay
No of HUGS accepted
2010/11
Number of HUGS accepted
Percentage of all residential customers
10
3. TCF Review - Findings
Putting it into Perspective
A1 Residential Tariff Consumption Distribution
90
80
72%
70
60
56%
50
40
Average A1 Consumption (6,250 kWh p/a)
30
20
10
Annual Consumption (kWh)
Cumulative % Non-concession
% All concession
14,250
13,250
12,250
11,250
10,250
9,250
8,250
7,250
6,250
5,250
4,250
3,250
2,250
1,250
0
250
Percentage of Customer Cohort
100
3. TCF Review - Findings
However … Many Households Are Using More
Average Annual Consumption for A1 Residential
Tariff Customers
7,000
6,000
5,500
5,000
4,500
4,000
3,500
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
3,000
1980
Annual Consumption (kWh)
6,500
3. TCF Review - Findings
However … ‘Average’ Doesn’t Mean Much
A1 Tariff Consumption Distribution - Selected Groups
4.5
4
4250
3.5
5000
3
6250
5250
7250
2.5
6250
2
1.5
1
0.5
Annual Consumption (kWh)
% All Households
% Energy Rebate Only
% Dependant Child Rebate
14,250
13,250
12,250
11,250
10,250
9,250
8,250
7,250
6,250
5,250
4,250
3,250
2,250
1,250
0
250
Percentage of Customer Group
5
3. TCF Review - Findings
However … Less Use = Different Price Signals
3. TCF Review - Findings
However … Electricity is Still Heavily Subsidised
Attribution of Synergy TAP
350
300
($) Million
250
200
150
100
50
0
2009/10
2010/11
2011/12
Non-Concession
2012/13
Concession
2013/14
2014/15
3. TCF Review - Findings
However … Income Plays a Big Role (ABS)
Expenditure on domestic fuel and power by
contribution of government pensions and allowances
to gross household income 2009/10
40
5
35
4.5
4
30
3.5
25
3
$ 20
2.5 %
2
15
1.5
10
1
5
0.5
0
0
Nil or less than 1%
1% to less than 20% 20% to less than 50% 50% to less than 90%
Average weekly expenditure
90% and over
Proportion of total goods and services expenditure
4. TCF Review - Conclusions
So, what do we take from all this?
• Payment difficulty is caused by a number of
factors – not just electricity prices
• Assistance should be tailored and targeted
• Consumption information for consumers is
important
4. TCF Review - Conclusions
So, what do we take from all this?
• There’s a need for improved communication by
Government in this area
• Significant scope for improved energy efficiency
• Concessions policy may be better coordinated
across State Government
QUESTIONS?