October 17, 2011

Cameron hits new depths of hypocrisy

According to the BBC, the prime minister has said the government needs to work "harder and faster" to bring down energy bills. Huhne has been working to bring them down?

Oops. As a commentator has written
We cannot raise energy prices from 3.3 per cent of median household income in 2004 to 6 per cent today to 10 per cent in 2015 without creating a serious public and political backlash against current energy and climate change policies.
The hypocrite said they wanted to work out how to create a "trusted, simple and transparent" market.

As a start, what about stripping out the charges for renewables? Then consumers can see what government policy - supported by the Opposition - is costing us. Delivering the economic incentives for investors to commit £200bn into green electricity power systems and networks is unworkable.

If they really want to simplify energy bills, the work's already been done for them. It's agreed that
We need 100% transparency over the actual components of a utility bill. We need to make it simple: One is commodity cost of gas, two should be cost to serve. Cost to serve is a combination of the actual delivery and metering costs and any alleged taxes. Green taxes ... need to be highlighted.
But, as Grealy goes on to say, "we need 100% transparency over commodity costs". The norm in North America, he says, is to have transparent monthly pricing that goes up and down with wholesale markets.

Job done. Energy firms would become the utilities they should be.

In the longer term, government policy needs to make the UK less reliant on international prices.
A sea-change in the UK's energy market from virtual self-sufficiency to net imports over the last decade has exposed consumers to rising international oil and gas prices while sluggish income growth at home makes energy less affordable.

Last year the UK imported more gas than it produced, while in the second-quarter of this year shipments of liquefied natural gas (LNG) exceeded pipeline imports for the first time.

The BBC quotes the Opposition, Which?, and Consumer Focus. They have nothing of substance to say.

The worst offender on the energy front is the government. And they know it. The government has an explicit policy to raise the cost of energy. The Opposition connives with it.

Energy companies should tell the government they are going to itemise renewables costs on consumers' bills. Government should do Ofgem's job for it and order companies to offer at least one tariff on the north american model. Then save money by slimming or abolishing Ofgem, which clearly hasn't done its job.

For the longer term, government needs a policy of getting the raw cost of energy down, not up. That means shale. Did you get that, speedy? Yes, shale.

Cheaper energy would be good for the economy, and good politics too.

1 comments:

Rossa said...

Capt. Ranty says it is 12% for the govt. and there is no law under which this is levied.
As you say hypocrite, it is the govt.'s fault the bills are high, not the utilities, although they are not completely blameless.
Magnum38