The AFR describes the energy shock arriving tomorrow:
A destructive wave of energy bill hikes is poised to sweep across businesses and households from July 1, with some commercial customers to be hit by a tripling in electricity prices…The news of the hikes coincides with a sudden escalation of concern over the stretched east coast gas market after the unexpected shutdown of a major offshore platform in the Bass Strait just ahead of a cold snap in the south-east.
The shutdown has cut gas supply from the biggest supply source for the east coast by 15 per cent and triggered a sharp spike in wholesale gas tariffs, underscoring the pressures being felt across the energy sector.
…While the hit to businesses from higher electricity and gas prices has been making headlines all year, so far it’s only the tip of the iceberg that has been evident, with a whole lot more to come, said Ivan Slavich, chief executive of electricity procurement adviser Energy Action.
“My guess would be that only 20 or 30 per cent of businesses have really felt it,” Mr Slavich said.
“It’s those electricity and gas customers that are coming off contract, that’s when they get impacted. They may have signed a deal back in 2012 or 2013 for a five-year contract and it’s only now coming up for renewal.”
He said one of the bigger clients of Energy Action, which advises Wilson, was looking at a $12 million increase in its annual power bill to $32 million, one of several increases set to hit in the new financial year.
Federal energy minister Josh Frydenberg said the Turnbull government is “taking immediate action to put downward pressure on power prices” and ensure reliable supply, pointing to the three measures announced by the Prime Minister last week.
If only. The Government gave itself a mechanism to prevent this with its gas export cap yet then shelved its use until next year for no apparent reason. Instead today it’s grandstanding with the states:
At least four states and territories could be penalised under a plan now endorsed by Treasurer Scott Morrison to withhold GST revenue if they refuse to develop gas reserves, including controversial coal seam gas.
…While such an approach will be popular in WA it does put the Treasurer on a collision course with others, including the Liberals in SA who, if they win the next election, will place a moratorium on CSG extraction in the state’s fertile south-east. The Liberal NSW government also has an effective moratorium on further CSG extraction, while Victoria bans any form of conventional onshore gas as does the Northern Territory.
It achieves nothing. Gas prices are still crazy:
You can thank a hapless Coalition for tomorrow’s bill shock.
