http://www.wsws.org/en/articles/2012/12/27/elec-d27.html
Australian utility companies disconnect thousands of households
By Terry Cook
27 December 2012
Increasing numbers of Australian households are being disconnected
from electricity and gas supplies because of soaring energy bills,
according to recent surveys. The figures indicate that the most
vulnerable people-unemployed, disabled and the elderly-as well as
ordinary working-class families, are being pushed over the financial
edge by rising utility prices.
The Independent Pricing and Regulatory Tribunal (IPART) found that
23,000 households in New South Wales (NSW) had their electricity
disconnected last financial year for non-payment. This was a 25
percent increase on the previous year, when 18,500 were cut off. The
number of gas disconnections rose by 15 percent.
Similar increases are occurring in other states. According to the
Essential Services Commission (ESC), 24,000 households in Victoria
suffered electricity disconnections last financial year, up 33
percent on the previous 12 months. Gas cut-offs rose 50 percent to
20,000. In South Australia there was a 34 percent increase in
electricity disconnections, to 10,100, and gas cut-offs leapt by 62
percent.
Figures from the Queensland Competition Authority show that in the
2010-11 financial year, more than 24,500 residences in that state
were disconnected from electricity for non-payment, a 37 percent
annual rise. In the first quarter of this financial year, the
disconnection rate rose further-over 7,000 households had their power
cut-off.
A submission by Dr Lynne Chester to this year's Senate Select
Committee on Electricity Prices noted that increases in electricity
prices for households "clearly outstripped average wages growth, the
CPI [consumer price index], the Pensioner and Beneficiary Living Cost
Index [PBLCI] and the CPI Electricity Price Index."
Chester, from the University of Sydney's department of Political
Economy, noted that the PBLCI had increased by more than 17 percent
over the past five years to mid-2012. During the same period, average
household electricity costs rose nearly 80 percent in NSW, over 60
percent in Queensland, South Australia and Tasmania, 57 percent in
Western Australia, 37.5 percent in the Northern Territory and 44.9
percent in the Australian Capital Territory. Victoria electricity
prices rose by 39.3 percent from 2007-08 to 2010-11.
The Combined Pensioners & Superannuants Association stated in its
submission that the utility increases had a "dramatic adverse impact"
on low income households. "The CPSA regularly receives distressed
calls from older people," it reported, "who are refraining from using
heaters, taking fewer showers and minimising television and light use
from fear of the costs involved."
In a letter to the Senate, Jan Turner, a pensioner, wrote: "We had an
electricity audit done last year and were told then there was nothing
further he [the auditor] could advise us to cut down on as we are
already pared to the bone
"We use neither electric heating nor air-conditioning, cook on an
electric stove but seldom use the oven as that is too expensive,
using stove top or microwave instead. We both take one minute showers
and I follow my husband into the shower to save waste.
"Exactly how are we supposed to cut down any more? Eat our meals raw
or eat in the middle of the night? Give up watching television at
night? Surely this is not something people should be reduced to."
Another submission from a near retirement-age couple said: "For the
first time in our lives, we had to ask for extensions to pay our
electricity bills last year
We are really worried that we just won't be able to afford to pay
energy and water bills once we retire-already we are having to use
our savings just keep our heads above water."
The sharp rise in energy prices is having a devastating impact on low
income families-the 3.5 million Australian households that fall in
the two lowest quintiles. Research shows that an ever-greater
proportion of their income is going to paying domestic energy costs.
According to Australian Bureau of Statistics figures, households in
Victoria in the second and third lowest quintiles of income spend
around 4.5 percent of their income on energy-more than twice the 2.1
percent for the wealthiest 20 percent of households.
Growing numbers of poorer households either go without other basic
necessities, such as food and clothing, in order to pay energy bills
or, unable to find necessary funds, remain disconnected. In South
Australia, one third of the 10,000 households whose power was cut off
for non-payment in 2011-12 failed to reconnect.
Last month, an Australian Council of Social Services representative
told the media that "many people are choosing not to reconnect
because they simply don't feel like they can afford [to] and so
they're operating their households without electricity any more,
using candles." Another charity group reported that some disconnected
households were "heating rooms with barbecues."
Disconnections not only create the conditions for house fires, as
people begin using alternative methods for lighting, heating and
cooking, but also have other health consequences.
A recent Public Interest Advocacy Centre study of family experiences
following a utility disconnection reported that 34 percent of
household members became anxious or distressed, and 17 percent of
children were unable to do homework. Others could not use a medical
device or became ill.
Whilst escalating utility prices have produced ever-greater levels of
social hardship, there have been windfall profits for power
companies. AGL recorded a 13 percent rise in profit, to $429 million,
in the past financial year. Origin Energy increased its profit by 10
percent to $585 million, Energex by 44 percent to $185 million and
Ergon by 28 percent to $166 million.
Prime Minister Julia Gillard is cynically using the widespread
concern over rising electricity prices to press for further free
market "reform" of the energy sector. This includes full
privatisation of remaining state-owned energy assets and the removal
of any regulations that restrict the right of power companies to
determine electricity prices. The Labor government's moves will
further boost profits of energy providers at the direct expense of
the living standards and health and safety of ordinary people.
The author also recommends:
Australian governments make bogus pledge to lower electricity bills
http://www.wsws.org/share/page/site/wsws/coag-d10.html
[10 December 2012]
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