The Australian Carbon Tax is Confusing and Angering a lot of ‘Green’ Utility Customers

Posted by PITHOCRATES - August 12th, 2012

Week in Review

The American Left wanted a carbon tax.  The program they kicked around before dying was referred to cap and trade.  The idea was to cap carbon emissions by forcing polluters to buy certificates to pollute.  Those who pollute below their certificates could sell their pollution certificates (i.e., trade) to someone who pollutes over their certificates.  Simple, yes?  Well perhaps a real example of a carbon tax program will clarify how a carbon tax can work (see Green energy customers paying carbon tax by David McLennan posted 8/9/2012 on The Canberra Times).

Several Canberrans have complained to the Australian Competition and Consumer Commission that ActewAGL is charging the carbon tax on its Greenchoice scheme, an economist says…

“ActewAGL understands that this is confusing for many customers and paying the carbon price for a green energy product goes against the grain of common sense. But this isn’t a straight forward matter, and ActewAGL certainly does not benefit from this scheme,” she said.

“In a nutshell, green power is a voluntary government-accredited program that enables customers to purchase renewable energy for their homes, when they actually make that voluntary purchase of green power, they are supporting the product of electricity from renewable sources over and above mandatory government targets that are set by the government. So you cannot separate the electrons; the energy doesn’t directly feed into your home, it is added into the electricity grid … on the customer’s behalf…”

The carbon tax is currently set at $23 for each tonne of carbon emitted and is charged to polluters, but is generally passed on to customers.

Mr Grudnoff said ActewAGL’s Greenchoice scheme – which he takes part in and broadly supports – was too complex and convoluted.

He said that people on a Greenchoice 100 plan – whereby all the electricity they used was “displaced by green sources”, according to the ActewAGL website – should not have to pay the carbon tax…

“When a customer purchases Greenchoice, they pay for the retail rate of electricity that comes from the grid. Then they pay for what we call a large generation certificate, which is a certificate that comes from Greenpower accredited renewable energy generators, such as wind and solar farms,” she said.

“They are two different schemes, so the price of that certificate that we purchase, hasn’t been impacted by the carbon price. So that Greenchoice premium, as we call it, has not been affected by the [carbon price], that is a separate transaction, and the customers still have to pay for that component…”

“When customers opt for Greenchoice, the extra amount they pay is invested in renewable energy generation from sources like mini-hydro, wind power and biomass. Depending on the plan a customer chooses, ActewAGL purchases a certain amount of renewable energy on the customer’s behalf. This can be a percentage of the electricity they use, or a fixed amount each day. In either case, that amount of renewable energy is added to the electricity grid on the customer’s behalf. This helps to reduce greenhouse gas emissions associated with the generation of electricity from fossil fuels,” the report said.

I don’t know how I can make it any clearer.

Anyway, this is what we have to look forward to if they revive cap and trade.  It may not be the same type of program.  But it will be about as simple and straight forward as this is.  And by simple and straight forward I mean anything but.

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