Here are ten ideas that could be on the table in a no-holds-barred attempt to solve the current power price crisis as war rages in Ukraine and Australia transitions to renewables.
- Cap household bills: Half a dozen European nations have already put a temporary hard cap in place to protect consumers from the worst of the wholesale price spikes.
- Cap wholesale gas prices: Former ACCC boss Rod Sims and others have proposed a price cap on domestic gas of $10 per gigajoule to take the heat out of the local market.
- Gas reservation: Western Australia has seen lower price hikes this year, partly thanks to a reservation policy that ensures the domestic market gets 15 per cent of supply before international sales.
- Windfall profits tax: With gas exporters making extra profits of $40 billion this year (Australia Institute), a windfall tax could help to fund other forms of household relief.
- Increase household rebates: The federal government fears this could fuel inflation, but the impact of giving low-income households extra to pay essential expenses would be minimal.
- Increase rebates for solar and/or ditching gas: The Greens and others have called for this and helping households to be less dependent on gas will help them save over time.
- Fund free energy audits: Many households could save hundreds of dollars just by getting some crucial energy efficiency advice, which would not add to inflation.
- Accelerate the Better Bills guideline: Deadline due in March 2023 but possibly delayed, this would tell customers on their bills whether their retailer has a cheaper plan for them.
- Tap more gas: The coalition and the gas industry have called for new gasfields to be tapped, which would increase supply although it may not automatically reduce prices.
- The nuclear option: The Coalition has also proposed a conversation about nuclear power. Although not a short-term solution, it too should be on the table.
The budget forecasts come in the wake of recent reports showing this year’s price hikes added to as much as $520 for a typical dual-fuel household in parts of Victoria.
This must now be governments’ top priority if we’re to avoid the scenes in the UK, where 40 retailers have gone bust and price caps have doubled.
There is no perfect solution to this problem: every option has winners and losers and the best answer may be a mixture of several options.
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But the time for handwringing is over.
We’re facing a full-blown cost-of-living crisis and households need to see our governments working together constructively and urgently to consider all the options available to them.
