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How rising energy costs became our problem, not the government's

Larissa Nicholls

Published: August 12 2017 - 11:45PM

We talk a lot about rising energy prices. They have doubled in the past decade.

We know that increasing numbers of households are being disconnected because they cannot pay energy bills.

But throughout the Victorian community, many households are determinedly finding ways to pay the energy bills. What we don't talk enough about is the impact of these strategies on wellbeing. As part of RMIT University's recent research for the Victorian Council of Social Service (Power Struggles), I talked to Melbourne residents about the things they do to keep on top of energy bills. Their stories are not only concerning – they are heartbreaking.

There's the sole-parent family living in an old, draughty home without using any heating or cooling to make sure she could afford to help support her children through university.

There's the man who saves energy and costs by not getting broken appliances (his heater and washing machine) fixed or replaced.

And there's the mother who uses public places to shower after asking for her gas to be disconnected because she feared she could not pay the bills.

Every day countless Australians are making similar decisions because of power prices. These people's financial struggles and sacrifices are often invisible. You wouldn't know when you walk by them or their homes. Each person I talked to presented a brave "this is just how it is" face. I am reluctant to say any one of their strategies alone is a risk to health.

An active person in good health may well get through a Melbourne winter without home heating or adverse health impacts. But others will not, particularly as they get older. As a society we should be worried about the cumulative effects of these energy-induced struggles – the hidden health, wellbeing and societal impacts.

Some of these effects won't be seen until future years. Ongoing winters braved in unheated homes and heatwaves endured lying down and imagining a cooler place, will eventually take a toll on mental or physical health. For some, they already were.

A woman in her 60s living alone told me: "I can't feel proud of having worked for 40, 45 years… because now I'm made to feel ashamed in some way."

Helen (not her real name) proactively managed her finances – keeping a calendar to predict upcoming bills, pawning items to take her cat to the vet, and minimising her energy use. Staying financially afloat was a constant worry. As she told me, "It eats at you … when you're already stressed or prone to anxiety. And if you're low income … one bill can spin you so out of control, then you've lost everything."

I found it deeply worrying to see people living in such tenuous financial circumstances despite their determination and best efforts. A sudden health issue, a rent or interest rate increase – so many possible events could upset their delicate financial balancing act.

Helen's situation raises another important issue. Right now politicians are doing a lot of talking about helping households with their energy bills. Their answer to the problem: households should shop around for better deals.

I see two big problems with this "solution". Firstly, it's just not that easy. The energy market is complex. Energy retailers use a range of confusing pricing strategies – including high discount percentages that distract from inflated underlying supply and usage charges. These strategies make it exceedingly difficult and time consuming to compare offers with certainty.

Many years working in the public service helped Helen negotiate with energy companies. But many others feel powerless to do this. Most can tell you of unsatisfactory, frustrating experiences they have had with energy companies. They are wary of changing tariffs or suppliers because the energy market is so complex. They don't feel confident that the costs won't end up being higher if they do decide to change. And if it's hard for highly educated native English speakers, what about those trying to navigate energy deals without those advantages.

The second problem is that the "shop around" strategy shifts responsibility for high power bills onto households. Even if they find the best deal available, the reality is they will still be paying a lot to use power, perhaps a lot more than a low-income household can sustain without substantial sacrifice of other essentials.

Households should be able to heat their home in winter. We need to stop blaming households for high energy bills. The fact is that Australia has high energy costs and poor housing quality – together this puts households in the position of choosing between high energy costs and extreme discomfort and potential ill-health. In contrast, most homes in some much less affluent European countries have double-glazed windows.

Energy pricing and policy need serious attention soon, but so does housing, welfare and employment policy. Without cross-sectoral action on this issue, the health and wellbeing of Australian households is undermined in ways we do not see. Already too many Australians are left to suffer out of sight and out of mind.

Dr Larissa Nicholls is a research fellow at the RMIT Centre for Urban Research.

Power Struggles was released this week and can be downloaded here

This story was found at: http://www.canberratimes.com.au/comment/how-rising-energy-costs-became-our-problem-not-the-governments-20170810-gxtkft.html