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Publisher's Letter

Rising electricity tariffs causing hardship to people on low incomes

Ausgrid, which provides power to much of the state of New South Wales, has announced that demand for electricity by regular households has fallen 2% each year for the past four years. Ausgrid says the drop is caused by consumers switching to energy-efficient hot water systems and light bulbs after seeing their power bills go through the roof.

“One example where we have seen most strongly is with residential hot water because we often separately meter this in households,” Ausgrid energy efficiency specialist Paul Myors said. “We’ve seen reductions even greater than 2%, even up to 8% per year,” he said.

Well, surprise, surprise! It is typical that a state-owned energy retailer would attempt to put a positive spin on the story by saying that the reduction in demand is caused because people are going to energy-efficient hot water systems and light bulbs. That is not the whole story; far from it. Yes, people are going over to solar, heat pump and gas hot water systems but this is in response to heavy promotion and generous state subsidies.

Add to that the rush, by those who can afford it, to take advantage of the even more generous state subsidies and grid feed-in tariffs for roof-mounted solar systems. Several states have now seen the light and cut back and then abolished these grid feed-in tariffs because they were far too generous. In fact, by the time that all the subsidies to domestic solar electricity have been paid out, New South Wales could probably have built a full size coal-fired base-load power station.

But the big reason why people are cutting back is simply that tariffs have risen so much. In four years they have risen by over 60% and similarly steep rises over the next few years are expected. For most people this will be shrugged off as yet another symptom of rising inflation but those on low and fixed incomes are taking a more drastic approach – they are not heating their homes in winter.

For anyone who is fit, healthy and able to move about briskly, this is probably not a great hardship but for older people it amounts to a significant reduction in quality of life. Think about it. Say you are frail, suffer from arthritis, rheumatism or osteoporosis (or all three together) and you are cold as well. This means that you are much more prone to falls, breaking bones and subsequent hospitalisation. Many people never fully recover from a bad breakage.

Many such people go to bed early and rise late, merely to stay warm. In effect, they are accelerating the onset of old age and subsequent lack of mobility by electing to go without reasonable warmth in their rooms.

Worse still, because it has been drummed into them about how much power is used by lighting, such people are not turning on room lights – after all, they use heaps of power, don’t they? Moving about in semi-darkness further increases the risk of falls and injuries. This is happening in Australia – one of the richest countries in the world! How have we come to this?

If you think I am exaggerating this problem, consider the runaway sales of products like “Snuggies” which are essentially wearable blankets. Large numbers of people are using these in preference to room heating. Again, ultimately this is a decision to reduce overall quality of life, fitness and longevity. People should be able to enjoy reasonable comfort, in winter and summer, without feeling guilty or having to “go without” some other essential.

Much of this nonsense has been brought about by governments wanting to be seen to “be doing something” about climate change. Well it is having very bad unforeseen consequences for a significant proportion of older people and it will actually mean a greater burden on the public health system.

Governments need to look at this as a matter of urgency. They have tried too hard to change peoples’ behaviour and it is having entirely the wrong effect.

Leo Simpson

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