(Image: Mitchell Squire/Private Media)

Angus Taylor’s proposed “CoalKeeper” tax on electricity bills could significantly outstrip the impact of the Gillard government’s carbon price, forcing up household electricity prices by at least 14%.

The tax, which would pay to subsidise the Coalition’s fossil fuel donors to keep uncommercial coal and gas-fired power plants operating even if the electricity they produce is unused, has been estimated by the Institute for Energy Economics and Financial Analysis to cost between $2.9-6.9 billion. That would mean an increase in ordinary household electricity bills of between $182-430 a year.

An additional $182 a year would mean a 13.6% increase in electricity bills in south-east Queensland, based on bill data from the Australian Energy Market Commission (AEMC). It would mean a 14% rise in NSW; 9.3% in the ACT, 16% in Victoria, 9.7% in South Australia and 9.4% in Tasmania. An increase of $400 a year would mean bill increases of more than double those figures. The AEMC has forecast bill reductions in south-east Queensland, Victoria and South Australia this year, suggesting the increases would be proportionately even bigger.

The rises would occur at a time when workers face years of wage stagnation, but no growth in real wages forecast for years to come.

Gillard’s carbon price is estimated to have increased power bills by 10% for the average Australian household, and 15% for business users, leading to a 3-5% reduction in annual carbon emissions in the first two years of the scheme.

Contrarily, the government’s CoalKeeper proposal would impose much higher costs in order for fossil fuel generators that would otherwise shut down to continue operating, driving up emissions beyond what would apply under business-as-usual conditions in which renewables, aided by battery storage and other forms of non-fossil fuel dispatchable power, would replace them.

Meantime the NSW government, in which Environment Minister Matt Kean is leading a push to increase investment in renewables and the jobs in regional areas it brings, has received a massive response to its call for expressions of interest for investment in its New England renewable energy zone.

As Reneweconomy reported, NSW Nationals MPs welcome the hundreds of ongoing jobs the investment would bring — ironically right in the heart of climate denialist Barnaby Joyce’s federal electorate. The cost of CoalKeeper would not merely be to households but to employment and investment in regional areas.