The Prime Minister has summoned some of the big energy company bosses to Canberra for a chat. With a bit of insight into how big energy companies think, so we took a look at how it might pan out…
PM: Thank you all for coming.
Big Boss 1: Why are all the TV cameras here?
PM: To record this momentus event.
Big boss 2: Someone will leak the transcript anyway.
Big boss 3: Will you be as nice to us as you were to Trump?
PM: Now, I want to talk about these unaffordable bills.
Big boss 2: I, for one, struggle with my energy bills. That’s largely because I’ve never seen one in my house.
PM: Actually, how does all this work?
Big boss 1 (BB 1): Australia operates one of the most incredible energy infrastructures in the world.
BB 2: Yes, we have incredible poles, wires and massive power stations. You can get some really moody photos of them at the right time of day.
PM: So, why are prices going up?
BB 1: There are a number of reasons for that.
BB 2: Yes, a lot of reasons. Many reasons. Too many to go into right now.
PM: Give me an example of one of those reasons.
BB 1: Policy.
BB 2: No Policy. You haven’t given us a policy.
PM: You need a policy to stop gouging customers?
BB 3: You’ve worked for a bank, Malc, you get how this works.
PM: True. Ah, those were the good old days.
BB 1: Will there be anything else today?
PM: Let me check with my adviser.
BB3: It was marvellous to see you at the club at the weekend, BB2.
BB2: I agree. I hope your helicopter ride on the way back wasn’t too bumpy in the win-
PM: Right. I need to know what customers pay for energy in Australia.
BB1: Not much. We have some incredible discounts.
BB2: Same here.
BB3: We do too.
PM: What are the discounts off?
BB1: Ours are off a special number.
BB2: We discount from our own special number.
BB3: Only God can decide what our special number should be.
PM: So you all have made up discounts off numbers you also make up?
BB2: That’s a gross simplification. This is a very complex industry.
BB3: Yes, frankly not even we properly understand it.
PM: Alright, alright. What’s an average price that a customer pays?
BB1: It depends.
BB2: Yes, that’s right, it depends. Lots of factors affect this.
PM: Well what’s the headline price?
BB1: Which one? The special one or the one with the cheeky discount?
PM: Just give me both:
BB1: 17 cents per kWh
PM: And the other one?
BB1: 25 cents per kWh
PM: So there’s a 32% difference between your two made up numbers?
BB1: That’s one way of looking at it.
PM: What’s the difference between the cheap option and the expensive option?
BB1: The price.
PM: Nothing else?
BB1: Well, if you’re on the big price we promise we’ll call you lots and lots and lots of times when you try to leave.
PM: How is that a benefit to the customer?
BB3: The who?
PM: The c-u-s-t-o-m-e-r
BB3: Not with you, sorry.
PM: You know, voters, people.
BB3: Oh the people who pay us you mean?
BB3: I see, I’m with you now. What was the question again?
PM: Why don’t you just charge all customers the same price?
BB2: Why don’t we what?
BB1: Can I ask for my lawyer to be present?
BB3: Did those TV cameras go? What’s the back way out of this joint, Malc?
PM: Help me. What’s driving up power prices? Give me the reasons.
PM: Don’t mention that again.
BB2: Wholesale prices.
PM: And what’s driving up wholesale prices?
BB3: Lots of things. It’s very complicated.
PM: I get briefed by my security agencies about matters so complex they’d make your toenails curl, so try me.
BB3: The French. It was the French.
PM: What did they do?
BB1: They shut a power station.
PM: Wasn’t it one of the least efficient and dirtiest in the world?
PM: And wasn’t the market already over-supplied?
BB3: Er, maybe.
PM: So how does taking capacity out of an over-supplied market increase wholesale prices so much?
BB3: South Australia.
PM: What have they got to do with energy prices in Victoria and NSW?
BB3: Now this one really is complicated.
PM: Trump was more fun than this.
BB3: We had some, errrr, technical issues during a NSW heatwave last summer.
PM: Like what?
BB2: Oh yeah Malc, this is a really good one. Go on BB3, tell him how you did it!
BB1: Oh please y’all, I’ll do it. So they were running 2 power stations in the heatwave. One burned expensive gas. One cheap coal.
BB2: Yeah next thing there was a ‘technical problem’ with the gas station. That sent wholesale prices up by 70 times what they were a few minutes earlier. Seventy!
PM: So they lost money?
BB3: Guys I don’t think we need to go int…
BB1: This is the best bit. The coal station was much bigger so they absolutely creamed it for the next couple of hours.
BB2: Caviar at Cafe Sydney that night BB3?
BB1: Or did you buy a new racehorse?
BB2: Horses, yes, now they’re a sign of wealth than our customers can only dream of.
BB1: Well, only if they’re purebred racers. Not just ordinary horses.
PM: I truly see what’s wrong with this industry now.
BB1: Can we talk about energy policy.
PM: You think a bit of energy policy will change all this behaviour?
BB2: It’d help.
BB3: And it’d be easier to get through your backbench than same sex marriage.
BB1: Yeah, you’re really screwed on that one. So to speak.
PM: What are you going to do to lower energy bills?
BB1: Send them by email.
PM: What else?
BB1: I’ll have to check.
BB2: Good grief no, I have someone take care of that for me.
BB3: I get them from customers every day, normally with large and heavily pressed biro marks virtually tearing holes in the page.
PM: What do you do with them?
BB3: Nothing. I mean when I say “I get them” I don’t actually get them. Little people take care of that stuff.
PM: Will batteries help?
BB1: You mean Elon’s big SA battery?
BB2: Won’t make a difference. We’ve been steadily adding heaps of profit into the daily charge anyway.
PM: What about household batteries
BB2: Same. Massive daily charges. Can’t do much about those.
BB3: Then there’s the 30 minute market settlement rule. We’re fighting for any change to a 5 minute rule to take years.
BB1: Yes, years and years. It’s very complex.
BB2: We’re also lobbying to make sure household batteries need to be placed within nuclear bunkers with 3 metre-think concrete walls
BB3: Can you believe Standards Australia has fallen for that!?
BB2: Isn’t it beautiful? I must thank them next time we play a round at Royal Melbourne.
PM: We’re all f*cked.
BB2: Are you thinking about the same sex marriage problem again?
PM: What can I do? I need a win on power prices.
BB3: Squeeze out new entrants. We’re doing a good job of that.
BB2: Yeah, you do the rest and we promise we’ll be nice.
BB1: Pinky promise.
PM: Get out.
BB3: Make us.
BB2: We’ll trip all our power stations if you don’t play nicely.
BB3: And we won’t help you build your nice new coal one. No one else will help you.
PM: What do we say to the press? I need a positive outcome from this meeting.
BB2: Tell them you beat us up real hard.
BB3: Yes, we’re willing to be humiliated like that.
BB1: Someone will leak the transcript anyway, so we’ll be fine.
PM: Get out.
Adrian Merrick is CEO of Energy Locals, a new community focused energy retailer, and a former senior executive with one of the big three gen-tailers.