Networks propose compulsory fees for all – to stop grid defections | RenewEconomy

Networks propose compulsory fees for all – to stop grid defections

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Networks seek to protect revenues by charging all households for grid connection – whether they use it or not – and to charge fees to customers who choose to use solar and storage and leave the grid. But even networks concede this is futile. What they really want is tax changes.

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The main lobby group for electricity network operators in Australia is pushing for compulsory connection fees for all homes and businesses – even if they are not connected to the grid – and penalties for those who choose to disconnect, as part of a last-ditch effort to protect their declining revenue streams.


The Energy Networks Association says the proposals are deliberately calibrated to stop people from leaving the grid, and kicking off what is often described as the “death spiral”, as the networks seek to recover lost revenues from those consumers who remain.

The change to a decentralised grid, based around solar and storage rather than big centralised generation, is seen as inevitable, and many analysts say that networks – which in Australia account for more than half of most bills following a massive ($45 billion) and questionable spending splurge in recent years – will have to change the way they do business, or even write down the value of their assets.

But the networks are digging in, refusing to countenance write-downs, and now want consumers to pay for the networks whether they use them or not. Alternatively, they want any households that leave the grid to pay their “historic” share of grid capacity as a penalty for leaving.

Grid defection is likely to become a real option for many consumers, because of the huge falls in the cost of rooftop solar PV, and the falling cost of battery storage. Soaring network fees and rising fixed charges is reducing the pay-back for solar-only installations, but is likely to encourage more battery storage.

As well, many households currently receiving high solar tariffs – such as the 160,000 households in NSW – are looking to battery storage to avoid the situation where they are exporting their solar power back to the grid for little or no compensation.

The networks are worried that, as network fees continue to rise and battery storage and solar costs continue to fall, it could be economic for individual households and businesses to quit the grid altogether, rather than pay high fixed charges.

Some analysts say this could happen within years, driven by technology breakthroughs, and the mass-market uptake of battery storage caused by new arrivals such as the Tesla PowerWall. They say it will be accelerated by the recent moves to lift network charges, and to increase the fixed component of those charges, meaning that consumers that use less electricity get hit twice as hard.

To try to stop this, the networks have presented five options to try to shore up the revenues of the networks.

The proposals include:

1. higher fees for connection to the grid, which it argues would “reduce the risk of future stranded assets”.

2. Exit fees, which would charge customers leaving the grid equivalent to their “historic share of network capacity”.

3. Compulsory “rates” style fees that would charge network fees to all homes and businesses regardless of whether they used the grid or not. “This would recognise the broad community benefit of a ubiquitous grid to all (whether individual users take advantage of the opportunity to connect or not),” the ENA argues. It says it would “potentially avoid inequitable outcomes where some users sought to ‘exit’ the grid, placing an increased burden on those customers remaining connected.”

4. Increase network charges to “compensate for future stranding risks”. In other words, charge more now in case the networks suffered revenue falls later. This would be done through calculations of cost of capital, but these charges flow through to consumers.

5. Offer tax advantages such as faster depreciation.

The proposals are likely to be fiercely resisted by consumers, consumer groups and the solar and battery storage industry. Already, the industry is complaining that higher fixed charges, and the introduction of “demand tariffs” in some states are part of a deliberate ploy to make the uptake of rooftop solar unattractive.

Steve Blume, from the Australian Energy Storage Council, says that the response by networks to raise barriers even higher, rather than adapt, will be self-defeating.

A major report in the US last year suggested that network operators should “stand and fight”, even though it recognised that households may not need the grid in the near future, just as telephone customers no longer need fixed lines.
“Rather than recommending a revision of the business model to direct their massive capital and other resources to maintain and grow their business through a distributed renewable energy future they recommended to stand and fight – put up the barriers top protect what they have – with consumers be damned!” Blume said.
“The ENA is taking that same path – making recommendations that are anti-consumer, short-sighted and wrong-headed for its business members too.
“They are right that this will be disruptive and this is the same reason they strongly resist energy efficiency and demand response programs – these reduce revenue and profit. ENAs push to punitive fixed prices and fees will open up the market for competitors who are innovative – even if regulators are slow to remove some of the current barriers to that (such as peer-to-peer trading).”

As the ENA itself admits, a number of these options “obviously would face profound implementation challenges”, not least the “significant consumer resistance” to the proposals for exit fees or compulsory fees.

“Higher connection fees for new customers present difficult equity and hardship issues, while exit fees can be represented as an unfair barrier to emerging competitive technologies,” it notes.

“In part, these options are likely to encounter resistance because they affect only a subset of readily identifiable and specific customers, rather than network customers as a whole.

“This sits uneasily with the fact that the grid has characteristics of a shared ‘public good’. Different perspectives on these mechanisms highlight the potential tensions between the interests of individual customers and collective customers, when determining fair, efficient cost recovery frameworks for network infrastructure.”

As analysts have pointed out on numerous occasions, the issue on cost recovery is whether the original expenditure was justified or not, and how these assets compete with new technologies.

The idea of using compulsory rates, fees, and higher charges to prop up an industry that has been overtaken by new technology is extraordinary, but presented by an industry that has gotten used to almost complete indulgence by the regulators over the last few decades.

But it may be that this is just a “scare tactic” by the ENA to push regulators, and the government, to give them more tax concessions, via accelerated or deferred depreciation.

It acknowledged the difficulties and inequities of the first four options, but says “providing greater flexibility to bring forward or deferring depreciation  … better recognises the common contribution of all past and present network customers to the existing network.”

In short, it recognises that it could recover its costs through some accounting procedures, that will inevitably cost the taxpayer. The question is, however, whether it should be allowed to recover some of the sunk costs for assets that are proving to be redundant, or excessive.

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  1. JustThink4Once 5 years ago

    Hardly surprising reaction as the grid faces up to its “Kodak” future.
    We can trust the Abbott government to back this move as it further stifles Australia’s renewable energy future. Though how they attempt to explain “cheaper electricity prices” to those paying for a service they no longer use should prove interesting. Especially given that the early adopters of off grid solar/battery will most likely be their traditional voters. Of course as the technology get’s cheaper and therefore available to the greater masses, it takes only one political party to kill this evil concept as a sure fire way to win office.
    The effect on house prices would also be interesting, as new suburbs will be sure to avoid installing grid power. Thus saving development costs and also avoiding this nasty consumer impost. So straight away existing dwellings become relatively more expensive to run and consequently market devalued accordingly.

    • Mike Dill 5 years ago

      I think that a new community might form an energy coop, and have a relatively large shared back-up generator.
      I could see where there might be one emergency electrical connection for the entire community, and one bill, but the normal ‘draw’ would be close to zero. I do not know how the rule would work for something like that.

      • john 5 years ago

        The built in price of the ability to supply will be charged where it is feasible to do so.
        An example would be a small suburb of 100 houses that is being built and has one or more backup gen sets and all houses have PV or a community built PV with battery backup system.
        In this case all would pay for the availability of power as it could have been supplied at low fee as the wiring cost to connect to the underground ducts in this case would already be required for which ever type of system was put in place.
        As to a situation where the small community of small demand was considerable distance from the grid and the capital cost was prohibitive then I feel this case would be excluded from paying a supply fee.
        As soon as electricity went from being a community service like roads to become a business the service part of the community aspect went out the window a social failure.
        A sliding scale would present problems as RE could lower the fee paid to a lower scale so the only way using a supply fee to work is to remove it from any augmentation would be to ban the use of PV in particular.
        Perhaps a state subsidy tied to income and usage which would cost far more than the benefit.
        This of course is socially impossible to do so the best course of action for the industry is to follow the Victor Energy business case and supply the equipment where both the company and the client have a good outcome.

        • Mike Dill 5 years ago

          I really like your best case scenario. I just do not see it happening without a large amount of pain.

          • john 5 years ago

            Vector Energy have followed this course for some years now.
            Just follow to solar and smart technology it is all there
            Renew economy did an article on this only the other day

  2. Beat Odermatt 5 years ago

    Did Cobb&Co.get compensation when cars arrived? Did steamship companies get compensation when air travel became affordable? Do we have to start paying more to slow down progress?

    • MaxG 5 years ago

      Of course, and wait until you pay for the air you breathe 🙂
      These political parties are rotten bastards; first they take the public good and privatise it, the privates raise the prices, then they try to fool the people with the “public good” speech… how stupid are we Australians?

    • john 3 years ago

      They passed a law that said automobiles had to drive behind a man walking with a red flag.

  3. Farmer Dave 5 years ago

    They did not include the option of paying a sufficiently generous feed-in tariff to encourage owners of PV systems to stay on the grid. My gut feeling is that a rate a bit under 1:1 would be enough, but I have not seen any market research on this.

    • Mike Dill 5 years ago

      In most cases storage will make the FIT or net metering obsolete in a few years. When the storage cost per kwh is less than the combined billing rate (including the demand and connection charge) there will be very little returned to the grid.

      • John Herbst 5 years ago

        A proper FIT would stimulate larger systems installed, which could mean more energy returned to the grid. A FIT based on actual network costs could stimulate even non-solar customers to feed in stored energy during critical network peaks. That’s too much efficiency for the ENA.

        • neroden 5 years ago

          Correct. A proper FIT would incentivize people who have the capital and the space to:
          (1) install enough storage to handle their nighttime load,
          (2) install enough solar to fill it and handle their daytime load,
          (4) install more solar than that.

    • john 5 years ago

      Just remember that the amount of power used in house is at the market rate.
      At present feed in tariff rates of 6 plus cents, this together with the household usage should be 10% at least.

  4. Mike Dill 5 years ago

    I cannot see the states ‘demanding’ that you are required to pay a ‘tax’ to pay off the grid if you are disconnected. It would cause a huge political problem.

    Does the ‘exit fee’ that they are proposing get paid by the seller if I buy a property and do not turn on the electric service? Do I get charged for electricity if there is no building on the property? This proposal is a scare for the regulators.

    With some luck the state regulators will get the message that it will be cost effective for me to go ‘off-grid’ when my electric bill is higher than the amortized cost of my solar panes and storage. This makes the problem worse for the utilities, as there will be even more stranded assets and underutilized capacity. These will need to be written off.

    Currently the numbers for me (in a relatively low energy cost area) are about 30% to 40% higher for disconnecting, but everything looks for that to drop.

    • john 5 years ago

      Mike if you own a vacant block you pay for the ability to use the water that is in the pipe this is a service fee.
      In the fringe areas it is far more economical not to pay for the transmission line both for the distributor and for the client who will have to pay for it.

      • Mike Dill 5 years ago

        I can see a situation where I get to pay a ‘service fee’ for the ‘ability’ to connect to the water or electric service even if I never intend to make the connection. In my mind that is a property tax, but in another name.

        • neroden 5 years ago

          If the fee is trivial ($20/year, say) they might get away with that sort of “hidden tax”.

          That’s not enough money to save them, though.

  5. Andrew 5 years ago

    “Alternatively, it wants any households that leave the grid to pay their
    “historic” share of grid capacity as a penalty for leaving.”

    Makes you wonder what all those connection and grid charges we have paid over successive years were for. Apparently they weren’t part of our historic share!

    • john 5 years ago

      Oh yes they are more than 50% of your power bill is for the grid.

      • Andrew 5 years ago

        Indeed. So their response is to look to charge you for the connectio you won’t have in the future!

        I do understand the ‘social good’ of the grid, and the need for it to be financed accordingly. It is the incentive to consume that this provides which is the problem.

        Note that most of the increases in costs of recent years were not for the carbon tax but due to ‘regulatory capture’ and the cost of the gold plated network with a built-in profit margin for the network providers. Michael West has written extensively in the SMH on such charges.

        I hardly use health services, but want them to be there when I need them. Health is different to grid supply though.

        The head in the sand approach of the power and network companies basically excludes them from the debate. The solution must be somewhere in the middle, not just a power company’s ongoing right to make profit without risk forever more.

        • john 5 years ago

          Well documented the costs and the RET has proved to be cost neutral I will post a graph from the NEM soon

      • Miles Harding 5 years ago

        Ahh, yes! legendary efficiency.
        It actually makes the Hydrogen economy look like a bargain. 🙂

    • juxx0r 5 years ago

      I compulsorily paid $6,000 for the underground cable past my place. I figure therefore that i own it.

      • Andrew 5 years ago

        🙂 seems reasonable.

        You pay, and you pay, and when you think you’re done, you pay some more.

      • john 5 years ago

        Then you paid not just for that bit but the upgrade needed to enable the wiring to pass.

      • Rob Campbell 5 years ago

        All new estates now pay headworks charges for utilities, you are right they are yours not the networks, they are gifted to them and your fees pay to maintain and renew. Less use means less maintenance and in future a lower replacement cost. Its just another means of pumping up asset values so it can be sold off with inbuilt taxation rights to fill the coffers of overspending governments.

        • juxx0r 5 years ago

          I already had standy up poles and wires that we had been paying for for over 20 years too.

  6. juxx0r 5 years ago

    I hope they dont mind mind paying the bill I’m going to be sending them every month for maintenance and payments of my car.

    Now i know that they don’t actually use my car, but i drive my car past their stuff, so i think it’s only fair.

  7. Maurice Oldis 5 years ago

    Just try it!!! They have had the option of engaging with their consumers but have treated them like dirt!

  8. John P 5 years ago

    This appalling proposal just goes to highlight the parasitic character of the modern neo-liberal version of capitalism. When I go to the shops, I can choose to buy a loaf of bread from a range of bakeries.
    Or I can choose to NOT buy a loaf of bread.
    In Victoria, the electrical assets are fully privatised and I may choose NOT to buy electricity. That’s my right. Any state government which tries to enforce payment may get a rude surprise.

    • MaxG 5 years ago

      Well said; exactly how I see it. And I shall leave the grid shortly, as I am so fed up with it all.

      • John P 5 years ago

        Welcome to the club MaxG. We abandoned the grid years ago and haven’t looked back.

        • Lisa Niven 5 years ago

          We are considering doing the same but there is so much information we don’t know where to start. Any recommendations.

          • John P 5 years ago

            Going off grid could be very expensive unless you are able to lower your energy demand. We did that by designing a house that would not need energy for heating and cooling.
            Also, before you start, try and meet someone who has successfully made the switch and see what they have learned. Perhaps go to Reneweconomy’s sister website “One Step Off the Grid” and check what’s on offer there.
            We did it in two separate places in two very different ways and both were very successful, but it would not be realistic to try and take a conventional house, with its high consumption rate, off the grid.

          • Lisa Niven 5 years ago

            Thankyou John

    • Doug Cutler 5 years ago

      Politically, a bridge too far.

    • Mike Shurtleff 5 years ago

      I would certainly hope so …and here in the US too!

  9. Chris Fraser 5 years ago

    Wish we could have the ear of the Govts that have to put up with all this ENA fuss. We’d tell them the Networks are not justified or correct, but panicked and reactionary.The reason for introducing rooftop PV and storage is not necessarily to cut out the grid, but permit us all to have a better standard of living.The only thing many prosumers want is to be able to generate to and consume from the grid on fair terms.This concept would be fine – provided 100-year-long incumbents concede they are not the only generators that matter. If they took greater steps to trial virtual net metering, they would see much more efficient use of the grid, leading to an easily calculable and more justifiable network charge.Why do networks worry that we need high service charges because we’re more efficient and consume less? They haven’t thought through the impact of importing energy for EVs, or have dismissed them as being too far off.If networks cannot get the picture … future write-downs are going to be fair game.

  10. nakedChimp 5 years ago

    That one will be fun to watch unfold for sure.
    People in rural areas already grab everything that is not tied and bolted down – well, even that is taken sometimes. Can you imagine what happens if such minds/characters are being confronted with a network of wooden poles standing in the landscape and they’re supposed to pay for them, though they don’t want them anymore..?!

    • mick 5 years ago

      2 stroke white ants

      • lin 5 years ago

        judicious placement of some campfires, or perhaps some back burning that “got away from us”

    • juxx0r 5 years ago

      As a signal of his unhappiness with the plight of Māori, Hone Heke chopped down the flagpole carrying the British flag that flew over Kororareka. The British interpreted this as an act of rebellion and soon the two cultures were at war. In the time space of 6 months Hone Heke actually chopped the flagpole down three times. To prevent this from happening yet again, the Crown ordered in a battalion of British soldiers to defend it. Heke created a diversion with the help of Kawiti and, whilst the soldiers were fighting on the beach, Heke and a few others crept towards the flagpole and cut it down for the fourth time. This was the beginning of the Flagstaff War.

      • mick 5 years ago

        yep the maoris taught the poms about trench warfare if not for them ww1 might have turned out differently also if not for the boers they would have fronted up in red coats

  11. Rob G 5 years ago

    Clearly they are scared and desperate. Their days are numbered.

    • JonathanMaddox 5 years ago

      And then you win.

    • Sim 5 years ago

      Then electric utilites only have themselves to blame with the price gouging that has been going on. Liberals support for business end. Labour support for union wages for the good old boys. Each one supported price increases upon increase on the consumers in this country full of coal and gas. They are as bad as each other over this matter. Now people want to reduce the affects of nonrenewables and go solar. It will not be long that a rebate( Claytons rebate) will not be necessary. Financially it will be very viable without shortly. Check out the latest on inverters and battery technologies to hit next year in early 2016.
      Utilites should concentrate their efforts on pumped storage, buying from residential solar and reselling to consumers in preparation for EV vehicles. Buying at 4 or 5 cents selling at 20cents should be plenty of profit. They pay more than this from major suppliers.
      EV will probably save them from major catastrophy. If major EV uptake occurs quickly enough consumption will surge and people can charge on lower costing electricity during the daytime.
      We will have to switch our major residential electricity costs to heating water by electricity during the daytime only and heating thermal mass for slow release of home heating for the evening. There will be a transition period which is painful. But that’s life and they will just have to get used to it and adapt. Cutting back on their waste will be good for them. That is business ebb and flow.
      Utilities, stop the crying suck it up and use your resources as a positive. Buy cheap solar and sell it to the other consumers. You do not to produce it just provide it.

      • Rob G 5 years ago

        Yes, but I suspect the utilities are ‘buying time’ and trying to kill off new upstart utilities (via the attacks on the RET). Ironically government is actually out of step with much of the wider business community – especially with the unwillingness to install an ETS. Many big companies have been figuring this into their business cost forecasts and by not having it there makes it hard to second guess costs.

        We’ve learnt not to trust the LNP on renewables, but I do think Labor are pro renewables and action on climate change. They do have unions in the mining sector, but they have openly said they want to transition these people out of it into renewable manufacturing… we’ll know more in a few days as Shorten will be outlining his renewable and climate plan. Remember too that the ‘Carbon Tax’ was always going to slowly kill off our fossil fuel thirst. Labor was wilfully doing this and it was the right thing to do.

        I have already order my home battery for early 2016… time really is running out for the slow moving utilities.

        • Sim 4 years ago

          I think Labor is just a bad. They both support the special interest groups. The excessive grid feed price is now coming back to bite them. Just as the insulation fiasco not so long ago in Australia. Trying to push things too aggressively with any project bring in the get rich quick operators.

  12. Colin Ball 5 years ago

    We’ve been off grid with stand alone pv/wind and battery storage since 1991, long before rooftop solar and rebates arrived en masse during deputy-sherrif Howard’s reign. Ours was an ecological/ethical decision.

    It would be fascinating to see how private power companies could impose network fees on folks like us. What would their govt-agent-enforcers do, cut us off by impounding the inverter? Maybe arrest the whole family and revoke citizenship?

    The mind boggles as the colony rolls on under neoliberal tyranny.
    What we need is more democracy, not less. And a debate about what that is, certainly not the current malfunctioning party paradigm that’s for sure.

    • MaxG 5 years ago

      Democracy is long gone my friend )
      We live in a plutocracy, controlled by corporations… in case this went on unnoticed.

      • John P 5 years ago

        Just so.
        That’s what the TPP is all about – to give the corporations even more power over us. That’s where the Libs come in – to support the corps at our expense.

        • MaxG 5 years ago

          Whoever signs the TPP should be put in jail for “the crime against the Australian People”… all our posts are in vain compared to what the TPP will do to this country… Big Tobacco is already suing the AU Gov and therefore its people.

    • john 3 years ago

      Its very easy, they process the fine through the SDRO and then cancel your drivers licence for non payment.

      Its very hard to get to court to dispute a fine if you cant drive yourself there.

  13. Marg1 5 years ago

    Unreal! Highway robbers.

  14. Bruce E 5 years ago

    Does this reinforce that Regulation has failed – lazy companies – and will continue to fail into the future?!!

  15. mick 5 years ago

    crooks chucked out of gaol to cram in electricity anarchists

  16. Caitlin Fitzsimmons 5 years ago

    Do you have links to the submission or lobby documents? Interested in following up.

  17. MikeN 5 years ago

    Good luck with the exit fee proposal Mr Distributor.

    How are they going to enforce collection of that? Cut off your power?

    The DB’s are the true dinosaurs of the NEM. Whilst they await their ‘extinction event’ it looks like they are typically going to do everything they can to screw over consumers. What worries me is that our moronic governments might let them continue to do just that. Let’s hope someone in power can see though the DB’s self serving ‘proposals’.

  18. Ronald Bruce Jones 5 years ago

    Will we asked to pay for the McDonald’s hamburgers, KFC & Domino’s pizza’s we don’t eat, because the service is being provided. Obviously they can’t provide a competitive service and want us to subsidize a poor one

  19. Mark Roest 5 years ago

    There is another word for ‘neoliberal’ capitalism which takes over the government and uses it to fleece the population, as well as to suppress any and all who object. It was applied to the governments of Hitler, Mussolini and Franco — fascism. AKA state socialism, for and on behalf of the corporations. Someone tell me if I am wrong in thinking that Aussies don’t have a lot of patience for being subjugated like that. My ex-mother-in-law is a fighter, and wouldn’t stand for it! Never mind her being in her 90s, just watch out.

  20. Clean livin 5 years ago

    May well find that unconstitutional.

  21. PrussianBlueDay 5 years ago

    How can all those privatised energy companies charge people for something they don’t use? Unless it is a state owned monopoly asset I think there is no legal justification for non consumers to pay.

  22. Alen T 5 years ago

    Qld should have sold its network while it was still worth something. How’s NSW going on their lease, how many prospective buyers, and how much are they saying they’re willing to pay?

    Increasing the connection charge, or even suggesting to, is a very bad move in my opinion. Developers are already planning on taking whole communities off-grid (e.g. Lend Lease’s pilot in WA).

  23. lin 5 years ago

    We saw the same thing from water retailers during the drought. We use less water, they charge us more for less to guarantee their profit growth. Governments are active participants in this “tax by another name” arrangement.
    Guaranteeing the profits of private corporations to protect them from competition is not the Free Market that Liberal and Labor are so happy espousing. More like racketeering than capitalism. If it is not illegal, it should be.

  24. Alan S 5 years ago

    It will put electricity on par with water whereby you pay a service fee based on property value whether you’re connected or not. The private providers are there to make a guaranteed income and the governments who sold off the assets won’t stand in their way.

    • Clean livin 5 years ago

      Water and sewerage supply are a health concern to governments. Electricity is not, therefore probably unconstitutional .

    • neroden 5 years ago

      That’s pretty weird. Here in the US, you do NOT pay for water supply unless you are connected.

      If your water provider is owned directly by the muncipality, your property taxes may go to subsidize the water system. But they never give away your property taxes to a *privately operated* water system…

  25. JIm 5 years ago

    So what about remote areas beyond the grid? Sites and projects which are difficult , costly and/or environmentally irresponsible to connect? When there is an outage, will customers get money returned?

  26. Clean livin 5 years ago

    Hey people, stop being so negative. If this becomes the norm of doing business in Australia, think of the possibilities.

    I could run a bus service past your door, and charge you for the opportunity!
    My council could build an Airport and charge all of the worlds airlines a potential usage fee.
    I could threaten to build a mine in your area, but charge you not to!

    The possibilities are endless.

    But remember, in the USA, when the internet came into being, the Telcoes attempted to pass a law prohibiting telephone use over the Internet. Fortunately they lost.

    • John Herbst 5 years ago

      The local petrol station will be sending bills to everyone in the neighborhood who takes your bus, no longer needing to refuel as often. Electric vehicle owners will be charged double.

    • john 3 years ago

      Note that the airports do charge all the airlines usage fees (or stupendous landing fees if you ask to land without having a negotiated rate)

  27. Nick Sharp 5 years ago

    Why is there so little corporate learning? One commenter refers to that “Kodak” moment, and he is not referring to taking snaps, but to the fact that Kodak (who I think pioneered a digital camera) did not pursue digital photography and paid the price.

    If a company is running some old technology, then they can watch in horror as it is wrecked by a new tech company, OR they can take action to retire that old stuff themselves, whilst moving ahead with the new.

    In this case, existing electricity companies could keep people on the grid by offering good feed in tariffs, and gradually switching off-peak pricing to daytime, when all the PV panels are on the go. The PV panel investors will effectively be buying new power station equivalents.

    In general, people respond better to carrots than to sticks.

    • Michael G 5 years ago

      Kodak saw the digital revolution coming but couldn’t figure out what to do because they sold film as an ongoing daily profit-making item. Their few cameras were just a way to get people to buy film. Selling cameras is like selling PV+batteries. it is a one time sale and then you’re done. What to do after that is a problem no one has solved.

      Kodak is still in business, just greatly reduced in size.

  28. Ken Dyer 5 years ago

    It will probably have to run its course over time, and when there are sufficient people who have gone ahead and been stitched up by the gentailers, then a class action could be mounted perhaps based around the differential of feed in tariffs ($0.06cents), the tariff charged by the gentailers ($0.30). One would think that the fair trading tribunal would be interested in this price gouging.

  29. john 5 years ago

    i can not log in

  30. Eric Seegers 5 years ago

    What a bunch of leeches these networks are. Yes they provide a
    service, but they never had to pay to install all of the networks &
    they certainly don’t maintain them in rural & regional areas as well
    as they should. Now they want to suck more money out of us if we decide
    to leave or not connect in the first place.

    What will they do if you don’t pay, disconnect you! Lol!

    These dinosaurs only have themselves to blame for not seeing this death
    spiral coming & changing their business model to suit. Smaller local
    grids & storage will be the future. I have no pity for them.

    Next we will see oil companies wanting compo as electric cars grow in market share.

  31. Ian Brimblecombe 5 years ago

    I had to pay $20000 to put a transformer in to get power to one of my farms. Does this get added to Ergon’s asset base and add to their return on capital? The cotton industry has recently had a change in harvest technology that has meant all the old machinery is redundant – maybe the distributors should write down their asset value when technology moves on – so that they can compete competitively with distributed solar.

  32. Kevin Brown 5 years ago

    If network operators want to retain customers they should reward those who have solar + storage and export to the grid during the evening peak demand period then top up their batteries during the overnight off-peak period and export back to the grid during the morning peak demand period. This would flatten the “duck curve” of electrical demand and reduce the need for grid upgrades.

  33. John Herbst 5 years ago

    The solution is less equitable than the so-called problem. Typical ENA logic.

  34. Neil Frost 5 years ago

    The solution is a simple one however I am sure greed will stop it.
    Embrace the grid and use it as a battery with a one for one FIT
    No point in me paying a heap of cash for batteries if I am hooked to a virtual battery
    Then I can charge my electric motor vehicle off peak without further expenses as well.
    However if the utilities get greedy then I will kiss them Hoo Roo and find a charging station when I need it or install an extra PV and battery setup to stand alone.
    So I say to the utilities ” It’s in your hands now are you going to push me off the grid with huge fees or embrace new technology and work with us all”
    I guess greed will win out in the end and utilities will price themselves out of the market but let’s see.

    • Sim 5 years ago

      VW with their being caught cheating on emissions testing way have just opened up a massive increased uptake of EV vehicles. Tesla shares just surged with the last weeks news.

  35. Digiview 5 years ago

    If the government where stupid enough to adopt such a proposal to protect private business,then they should be prepared for civil revolt. Remember it only takes a small percentage of the population to call on the governor to dissolve a government and have for fresh elections. I believe you would need 2.2 million people not impossible.

  36. Reality Bites 5 years ago

    What the network operators should do is just charge for usage, then start reducing the capex spend on repairs and maintenance in order to match the revenues. Then when you have extensive blackouts or brownouts the consumer will find out how unreliable renewables actually are. But then this will probably lead to increased greenhouse emissions …. from all the diesel generators Bunnings will sell as auxiliary/backup power. However, like it or not, the State and Federal Governments will not allow the operators to cut capex to match revenues and reduce the reliability, instead they will ensure reliability by imposing compulsory fees.

    • Barri Mundee 5 years ago

      I love it when the anti-science climate deniers get here to spread misinformation! Its a sure sign that FF vested intrerests are concerned that their business model is under threat.

      • Reality Bites 5 years ago

        Yeah sure it’s a plot! For the record I am not an anti-science climate denier, I agree with the science, but just look at it realistically rather than as a radicalized anarchist.

        • Barri Mundee 5 years ago

          I was in a professional who worked all his life in the brown coal industry, hardly a “radical anarchist”.

          • Reality Bites 5 years ago

            Even I know that brown coal is bad and when driving down to the Latrobe Valley and you came over the hill at Moe you could literally see the pollution hanging over the Valley. The sooner they close the brown coal fired power stations the better.

  37. John Herbst 5 years ago

    I just read the paper and, to be fair, Options 1 through 4 weren’t serious proposals, just ‘things that would be even worse than Option 5’. Option 5 is also a money grab, the so-called ‘Window of Opportunity’ being that prices have dropped, so we can make this price increase without customers noticing. The proposal is to increase the depreciation rate of assets, charging customers more now on the idea that they will be charged less later. It’s economically backward to say that a lower interest rate should promote paying off a debt, which is what the author’s case boils down to.

  38. Gordon Bossley 5 years ago

    Such a negative, desperate approach, greed driven. A no-brainer that this would happen.

    How about offering people motivation to stay on-grid? Products like the one below will enable consumers to purchase renewable energy – the grid becomes an exchange service.


  39. SM 5 years ago

    Using Abbott/Hunt terminology … they’re asking us all to pay a GRID TAX !

    • Chris Fraser 5 years ago

      shhhhh …. using terminology from these two they should really be levies

  40. im lost 5 years ago

    Bad luck why pay $5k to connect to grid & pay $1 day service charge, I will keep my $6k for 1st year spend it on Lithium battery bank

  41. Ron Horgan 5 years ago

    Nothing to worry about here! The silly suggestions are just a desperate rush to the lifeboat. What political party could be elected supporting these outrageous suggestions. They will be made unlawful because that’s what we all want in our democracy.

  42. neroden 5 years ago

    The correct response to these proposals is to laugh at them.

    If they actually manage to get the worst of these implemented — like charging people for NOT using the grid — they should be shot through the head with rifles, because that’s just evil.

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