Why do your power bills keep going up?

Why do your power bills keep going up?

A CANBERRA homeowner has drawn the line at receiving a $2000 gas bill, deciding to spend $4000 on installing a wood fire heater instead.

Mark Morey is just one of many homeowners and businesses grappling with huge increases to gas and electricity bills, that has seen charges for one Victorian business rise by a whopping $600,000 in one year.

Increases for residents have not been as dramatic but Mr Morey said they were fast becoming unaffordable.

He was shocked to get a gas bill last October for $2005. Five years ago his bill for that time of year was just $1212. That’s a 65 per cent increase.

With more price increases expected to kick in from July 1, Mr Morey said his gas bill would probably have been $2300 if he didn’t take action.

So he decided to install a wood fire heater instead.

“Two tonne of wood only costs about $600 and that will get me through the winter,” he told news.com.au.

Even though he has to spend $4000 to install the heater, Mr Morey estimates it will only take 18 months for the system to pay itself off.

“It’s really quite pathetic,” he said. “It’s dreadful for the environment and if everyone in Canberra burned wood the city would be uninhabitable but we don’t have a choice.

“It’s really f***** and beyond belief.”

Apart from the smoke pollution, burning wood also releases carbon dioxide into the atmosphere so is also bad for climate change.

But Mr Morey said his bills were out of control. He lives in a four-bedroom home with this wife and daughter and said his overall gas bill for last year was $3300. Much of this is racked up over winter, which is why his October bill is so high.

Mr Morey’s electricity cost $890 so overall his energy bill cost $4190 last year, that equates to about $1047 a quarter.

His bills have kept rising despite the fact that he has reduced the temperature in his house from 19 degrees to a “barely tolerable” 17 degrees.

“So over five years the price of gas has more than doubled, given that I’m using less gas,” he said.

“It’s much too cold in my house at the moment but I can’t afford a more comfortable temperature.”

Mr Morey said many others living in colder climates were facing the same problems and action needed to be taken to stop the price rises.

“Prices went up by 17 per cent this year (from July 1) and they are forecast to increase by the same next year — as far as I’ve been told. That’s a 35 per cent increase over two years,” he said.

Prime Minister Malcolm Turnbull has announced export measures to keep more gas in Australia but these won’t take effect until January 1.

The Australian Competition and Consumer Commission is also conducting an inquiry into how to get more gas into the market and to improve transparency about prices by providing regular information over the next three years.

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But Mr Morey said action needed to be taken today.

“The time for action on this was yesterday and not in six months,” he said.

The general manager of Australia’s largest wool producer Victoria Wool Processors agreed and said his gas bill had gone up by $600,000 in one year, which was a 6 per cent increase.

“Next year we don’t know what will happen,” David Ritchie told news.com.au.

“It has had a massive impact, we are an exporter and are competing against low cost countries like China and so we have no ability to pass on the costs to our customers.”

Victoria Wool Processors employs 35 staff and the increase equated to about $17,000 per employee.

While Mr Ritchie has absorbed the cost this year and won’t be letting staff go at this stage, he doesn’t know what will happen next year if prices continue to increase.

Mr Ritchie believes state governments could help businesses by introducing a 50 per cent short term reduction in payroll tax.

“This would be a very practical step and could (include as a condition) that they don’t reduce staff by 10 per cent, or something like that, to help keep businesses operating.”

charis.chang@news.com.au | @charischang2