Electricity industry accused of carbon-trading rip-off

According to environment lobbyist group Total Environment Centre (TEC), Australia’s carbon-intensive electricity industry is proposing to rip off consumers despite government support for free pollution permits and other compensation to coal-fired generators.

TEC director Jeff Angel said in a media release: “TEC has obtained a document showing that the electricity industry is seeking to pass on the full carbon cost to business consumers in contracts for future supply, even though they expect to get free permits and compensation under an emissions trading scheme.

“A large amount of cash is going to be given to the coal-fired sector under the Rudd government’s ‘green paper’, yet there will be no discount to consumers. It’s really a double rip-off of consumers and the environment — and cash transfer to coal, because coal power shouldn’t be getting the subsidy in the first place. With the industry pushing for an end to price controls on residential prices, it’s only a matter of time before households will also be affected.”

TEC obtained a document by the Australian Financial Markets Association (AFMA) Electricity Committee that contains a carbon clause for the industry that uses ‘average carbon intensity’ and the ‘daily spot price for Australian emissions trading permits’ to make ‘carbon adjustment’ to prices charged. Angel states that electricity generators and retailers are insisting this clause is inserted in customer contracts, but counters with an alternative approach: “There’s a simple way out of this — don’t give the coal-fired generators any subsidies.”

TEC is an independent, non-profit group that campaigns for environment protection in the city and country, changing government policy, advising the community and challenging business.