Electricity price increases: gold plating or carbon dating?

Peter Van Onselen claims Julia Gillard is going to wedge Tony Abbott on electricity price increases by blaming conservative state governments.

There seems to be two prongs to this wedge strategy. The first is described by Gillard as “gold-plating” of the electrical network. Gillard compares the electricity supply as being the equivalent to a 10-lane highway when only a 2 lane one is required to meet rare peak demand situations.

The second prong is being pushed by her Minister Martin Ferguson who is demanding that the states privatise the electricity suppliers.

Both these aspects of the government’s strategy are fraught with political risks and contain considerable irony given the ALP’s past policies.

Peak demand, the ten-lane part of the energy supply, is indeed occasional but crucial to lifestyle patterns. Daily peak times correspond with departure and return to homes, and seasonally correlate with temperature extremes.

Australians are already using much less electricity per capita. If peak consumption is to decline further either major adjustments to lifestyle will be required [i.e. being colder or hotter] or, alternatively, brownouts or even blackouts will occur, something Gillard has said will not happen but which have been predicted by the AMEO and the AER.

In terms of how the ten-lane highway came to be built in the first place Gillard has overlooked the person who was most responsible for the construction of the electricity highway, ALP stalwart, Bernie Riordan, as Professor Sinclair Davidson notes:

The gold plating she is talking about has its genesis in a union campaign started a decade ago by a bloke Gillard recently appointed to a $350,00-a-year job with Fair Work Australia – former electrical union boss in NSW Bernie Riordan.

Riordan was the man who in 2004 forced the Bob Carr Labor government to impose the very reliability standards that Gillard is now claiming are responsible for the price gouging of Sydney families.

Former NSW Labor energy and planning minister in the Carr and Iemma governments, Frank Sartor, admits as much in his book The Fog on the Hill – claiming that because of Riordan’s lobbying he increased the reliability standards in NSW to prevent power shortages to consumers.

This followed Riordan’s first successful campaign against electricity reform in NSW, when he was instrumental in blocking Carr’s attempt to privatise in 1998.

Ferguson’s quest to privatise also contradicts previous Union opposition not only from people like Riordan but the current NSW State Opposition leader John Robertson, who vehemently opposed privatisation when he was the leader of the ETU, and still opposes it.