Even today you will see Electricity auctioned for 3-5 Cents / KWh By the time it gets to us it’s 33-35 cents / KWh.
The rules that control retail electricity is grossly out of date, we may as well be in 1901.
Even the NEM computers run XP. It takes several computers just to get any reliability.
Bills are compiled and distributed on a world wide system these days. The NEM says you must be sympathetic to customers that default. That is a reason for an extra 20% of charges the customers pay. It is a half hearted privatized system. Power distribution services wand their payments from retailers, but the retailer is expected to forgo payments from customers. That is another good reason for another 20% of charges the customer pays.
You not only have to be a member to the ombudsman which has access to your computer. The AXS, Austraclear, because that is the only place the generators accept payment from, NEM and AEMO. That is where all the extra charges come from, to make up a retail cost. The whole system needs stream lining and bought up to date.

SR,

The privatisation of electricity resulted in far smaller increases in power costs in victoria than states which didn't privatise, also maintenance and availability of equipment improved.

Dear ShadowMinister,

You wrote;

“The privatisation of electricity resulted in far smaller increases in power costs in victoria than states which didn't privatise, also maintenance and availability of equipment improved.”

Bunkum!

Mantras are not facts.

Victoria had historically low electricity prices before privatisation. The government kept a cap on prices under a privatised system for a number of years then let the shackles off. We have seen dramatic increases in prices but an equally dramatic fall in the maintenance of the network. Victoria's network cost as a proportion of the average bill is markedly lower than any other state but the wholesale and retail cost proportion is the highest.

So the actual truth is that Victoria was the first state to so fully privatise its electricity sector yet its price increases have been in in lock step with the other states ever since.

For you to claim “far smaller increases” is completely wrong and without foundation.

Also since 1997 to 2012 the number of trade and technicians in the utilities have not kept up with population growth but the number of sales people have shot up 6 fold and the number of managers have more than doubled with a manager now for every 9 workers rather than 13 pre-privatisation. The vital trade and technician cohort has gone from being over a third of the workforce to around a fifth.

As is usual with privatisations the managerial classes move in and in order to pay for them the on the ground staff are cut to the bone.

The so called efficiency gains are totally illusory.

The way Electricity is auctioned off is far to complicated. It would be far better by having a set wholesale price. Retailers know day to day how much electricity that they require and pay for. Alleviate the riskiness involved from market speculating. That is a cost that needs not be there. Why have a system of retailer against retailer. [Not at the wholesale market at least ]
Electricity could be ordered for a week in advance and paid for. The industry needs to be simplex not complex. Persons that specifically buy green energy is nothing that can not be calculated and verified by %.
Risk reduction, a stable MWh rate, a streamlined system, 15 cents could come off the prise / KWh. Days of old never change.

SR,

First you claim that privatisation increases costs to consumers and reduces maintenance, Next you claim that costs in Victoria are in lock step with other states. Make up your mind.

http://theconversation.com/myths-not-facts-muddy-the-electricity-privatisation-debate-38524

This detailed comparison supports the contrary view.

In addition, in doing benchmark studies on maintenance, i.e. plant availability, the plant availability on every coal fired plant in the Latrobe valley increased considerably after privatisation. That this was done with less staff, is due to good management and initiative which is generally lacking in government organisations.

579,
We do not know in advance what the electricity demand will be, nor exactly how much electricity we will get from solar and wind. There is a day ahead electricity market, and AFAIK electricity companies aren't prevented from making longer term trades. But to ensure supply matches demand, there needs to be a highly variable spot price.

Market speculating is more a way of dealing with risks than a source of risk, unless the speculators are able to manipulate the market. The system of retailer against retailer was set up to help ensure that they can't manipulate the market.

The most useful change that could be made is to make it much easier for consumers to buy electricity at the spot price. I'm certainly not saying they should have to, but people and businesses should have the opportunity to do so if they want to.

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Shadow,

Some services are much more suited to privatisation than others, and electricity generation companies are much better suited to privatisation than monopoly infrastructure providers are.