By Carolyn Beecham
SYDNEY — There is a "policy vacuum" on energy issues in the NSW government and the state Electricity Commission, says Greenpeace. Conventional power stations produce over 50% of greenhouse gas emissions in NSW, and the use of non-renewable energy sources must be slowed, but little is being done.
A report entitled "Clean Power: Legislative Reform for Energy Efficiency" was commissioned by Greenpeace and prepared by the Environmental Defenders Office, to give the government and its bureaucrats some clues on where to start the necessary reforms. Green Left Weekly attended the launch of the report on September 9 and spoke to Greenpeace energy campaigner Keith Tarlo about the recommendations contained in it.
In 1991 the state government introduced the Electricity Commission (Corporatisation) Bill. The bill would have transformed the commission into the state-owned Pacific Power Corporation. Keith Tarlo believes the plan to corporatise was hatched, not to improve energy services for NSW, but to give the appearance that the government was "doing something" on the energy question.
The introduction to "Clean Power" says: "The environmental opposition to corporatisation was not based on opposition to reform of the electricity and gas industries. Rather, in Greenpeace's view, the attempted corporatisation took place in a policy vacuum."
The bill was withdrawn on both public accountability and environmental grounds in late 1991 (although the name Pacific Power is being used). The policy vacuum remains, but "Clean Power" contains some extremely useful
suggestions for real reforms which could pave the way for more efficient delivery of services and a significant reduction in greenhouse gas emissions.
Tarlo says that energy efficiency is the key to both these goals but that powerful structural barriers prevent its achievement. Among the most serious of these, he says, are the hidden subsidies and benefits to inefficient producers, distributors and users of conventional energy.
"Imagine if a householder could pay off the cost of her or his home insulation, solar power equipment, water efficient shower rose and power efficient light fittings over the same period that electricity consumers pay off the capital expenses associated with establishing and running power stations. We all pay for power stations, but as a proportion of our regular bills and over decades. If we try to use energy efficient equipment, we have to pay the whole lot up front."
Greenpeace wants a level playing field for energy efficiency. Today electricity providers receive cheap government-guaranteed finance, exemption from company tax, land resumption powers and control of the transmission grid. "Clean Power" recommends that these benefits be either removed or shared with more efficient and less environmentally damaging energy service providers.
I asked Tarlo whether there was a danger that removing subsidies and other benefits to energy service providers could disadvantage low income people, at least in the short term.
"In a general sense, if energy were used efficiently, the bills would be lower for everybody. As a specific answer to your question, though, low income people are already disadvantaged, because the real benefits of taxpayer subsidisation go to the big, inefficient users: the rich."
Rental arrangements complicate matters, says Tarlo. "A lot of low income people live in rented accommodation. The capital investment in the house, the roofing, insulation and basic appliances, is made by the owner, but the energy bills are paid by the tenant. There is a split incentive. The incentive for the owner is to use the cheapest materials and equipment possible. The result of this, for the tenant, is high energy bills.
"This is a specific problem for low income people which needs to be addressed with specific programs. There are a couple of ways of doing that. One is the introduction of building standards for energy efficiency, which every OECD country has, except Australia.
"There are also utilities, even in Australia, which have targeted programs for replacement of inefficient devices with more efficient ones. Brunswick Council in Melbourne is one example. You can do that either as a welfare program or you can do it as a straight provision of capital equipment for distribution.
"At the moment, rich people who use more power get more benefit from the government subsidies. If you want to ensure low income people have sufficient access to energy services, then it is better to have a targeted program, like a low-income or pensioner rebate or discount."
But "Clean Power" is not, primarily, a step-by-step guide to energy efficiency. Its most useful contribution is as a framework for increased community participation in decision making about energy services, and increased public accountability for energy service providers.
The key recommendations in the report are those dealing with the establishment of an independent energy regulatory body (the Energy Council) with responsibility for keeping the playing field level in energy planning and investment decisions, and
with the capacity to conduct public inquiries with effective participation by community organisations funded by a third party.
These recommendations go to the heart of the inertia in the power industries. As the report says, "Corporatisation of the Electricity Commission of NSW, without effective competition or regulation, would have created an unregulated, unaccountable monopoly with increased market power. Such a body would be unlikely to implement greenhouse gas emission reductions or provide energy services in the most economically efficient way."
This is true also of existing conventional energy service providers, many of which hold monopoly power and are hidden from public scrutiny. Electricity commissions and authorities throughout Australia have been slow to respond to evidence of their part in the ecological crisis, and they have actively campaigned against reform. It can only be hoped that "Clean Power" will, with the support of the NSW independents, be forced onto the government agenda.
The independent MP for Manly, Dr Peter McDonald, spoke at the launch of the report and pledged his support for legislative change along the lines recommended. He said he would get the changes into parliament as a private member's bill if the government declined to take them up.