Electricity
A steam-electric power station of the Public Power Corporation (PPC) is seen in the Keratsini suburb, west of Athens July 2, 2014. Workers at Greece's state-controlled power utility PPC will stage a series of strikes from Wednesday, in the midst of the summer tourism season, to protest government plans to privatise the firm, their union leader said. Reuters

Prime Minister Tony Abbott may have won votes when as Opposition leader he promised to repeal the carbon tax pushed by then PM Julia Gillard. While he succeeded in repealing the measure after the coalition got the majority in the September 2013 federal election, Aussie voters now appear to get the short end of his electoral promise.

This is because electricity companies are apparently not passing in full to households and businesses the reduction in their cost despite the law's repeal.

When the carbon tax, at $23 per tonne, was introduced in the third quarter of 2012, power prices in Australia went up by an average of 15.3 per cent. Three months after its repeal in July, electricity prices declined by only 5.1 per cent.

"Electricity was a little bit better than we had expected, it fell five per cent but we were looking for a large decline than that, mainly because of the carbon tax repeal implications," Skynews quoted JP Morgan economist Tom Kennedy.

While Mr Abbott promised the repeal should result in a 9 per cent reduction in electricity prices and 7 per cent in gas bills, Karen Winsbury, head of corporate communications of AGL explained, "Prices generally don't change that regularly, in terms of what customers pay. Generally customers lock in a price for, say a year, that's a set price."

Nevertheless, Finance Minister Mathias Cormann said the reduction still helped the Australian economy and families with the finances, saying, "Scrapping the carbon tax was always about reducing cost of living pressures and passing the savings onto families and businesses."

Kieran Donoghue, general manager for policy of the Energy Supply Association of Australia, pointed out that the carbon prices was only one of several factors behind the price hike in Q3 2012 and price decline for the same quarter two years later. He said other factors that determine electricity and gas prices include network infrastructure upgrades and maintenance, bushfire mitigation initiatives and government required measures such as the installation of smart metres in Victoria.

While Mr Abbott would consider the repeal his crowning glory, others believe it was the dumbest decision made by the Australian Parliament.

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