[LINK] Electricity Regulation...lessons for the NBN?

[Marghanita da Cruz]

Last night's, SBS Insight program into Electricity Pricing, covered a few 
topics discussed here on link including solar, wind alternatives to Coal 
and Diesel electricity generation, peak power needs, Smart Meters...

Also, how Energy pricing works..
> JENNY BROCKIE:  We are going to get on to, why is it going up the way it is? Just so we're clear on that and that's a really good description in terms of the price bounces along the chain presumably from the generators -- it bounces all the way along that chain. Andrew Reeves, you're the Government regulator - explain to us in simple terms how then pricing works? How is electricity priced?
> 
> ANDREW REEVES, AUSTRALIAN ENERGY REGULATOR:  Jenny there are those three parts -- there is the cost of production and in that sector, the price is set by the market. Generators bid and make offers to retailers. There's competition there and the market itself will determine what those prices are.
> 
> The costs of the transmission network and the distribution network - that is the poles and wires, prices for that are set by the Australian Energy Regulator under rules set out by the Australian Energy Markets Commission. And network costs are about half of a customer's total bill.
> .... 

There was also this discussion...the NBN has to return 7% on its money from
the government.

> JENNY BROCKIE:  It's to do with borrowing, I understand, borrowing at lower rates and so on?
> 
> ROMAN DOMANSKI:  One reason is that the Government-owned businesses, because they're Government owned, can get access to cheaper funds, basically, for example - cheaper debt because they do that through their Treasury corporations. In the case of privately owned ones, they have to go to the market, basically. But the regulator provides these businesses with the same rate of return. It doesn't matter whether they're Government owned or privately owned. So there's a windfall there that particularly goes to the Government-owned ones.
> 
> JENNY BROCKIE:  George, why are you laughing about the idea of this? You're spending - you're in the middle of an $8 billion spend on infrastructure at the moment -- are you over spending on infrastructure?
> 
> GEORGE MALTABAROW: No, we certainly don't overspend and I think the AER cut our capital allowances and we've managed to work within that. We're very conscious of costs passed on to our customers and try to spend less than the allocated budgeted amounts so in the next period, less cost is passed on.
> 
> Can I just make a point about Government and private? The rules that the AER follows to set, to benchmark, are independent of ownership. Their job is to benchmark the most efficient enterprise. It doesn't matter whether it's Government or private, when that frontier is established - the regulator sets the price at that frontier. Customers shouldn't pay for inefficient enterprises and the ownership in that case doesn't matter. The efficient frontier, the benchmarking, is what should happen.
...
<http://www.sbs.com.au/insight/episode/index/id/419/Power-Play#transcript>
-- 
Marghanita da Cruz
http://ramin.com.au
Tel: 0414-869202