Playing with power.(Power Politics: The Electricity Crisis 'and You)(Book Review)

Power Politics: The Electricity Crisis 'and You, edited by John Spoehr; Wakefield Press, 2003, $19.95.

THIS INEPT cri de coeur comes from a South Australian academic who yearns for the days of Tom Playford. Liberal Premier of that state for almost thirty years, Playford nationalised the state's power industry in the 1940s, using it to underwrite state development and subsidise rural power costs. The Liberal government of the 1990s privatised South Australia's power industry, and John Spoehr, editor of this collection of essays and Executive Director of the Centre of Labour Research at the University of Adelaide, argues that the government short-changed South Australians and deprived them of any significant say in the industry's future.

Spoehr is worried about the loss of power company revenue to the state, the threat of blackouts, corporate abuse of trading rules in the national electricity market, price increases of 25 per cent for households in 2003 and a dereliction of responsibility for greenhouse gases emitted by the industry. He warns that power prices will keep rising.

The book offers a number of solutions. It calls on South Australia to buy back the poles and wires network, tighten controls on the national electricity market, encourage a switch to renewable energy and to impose a levy on greenhouse emissions in the industry (even though no government has agreed on a reasonable price for greenhouse gas emissions).

All of this borders on the fantastical. The "electricity crisis" is imaginary, and the so-called solutions most likely would push power prices to levels undreamt of even by Spoehr et al when invoking the alleged depredations of privatised companies. A firm grip on reality, and regard for the facts, are not strengths of this book.

Market reforms have transformed South Australia's power industry from a largely unaccountable state monopoly into an open and competitive set of companies. The proceeds from the sale of the state's power assets (some $5 billion) are comparable to the high prices paid for Victorian power assets when investors were at their most bullish. The assets would not be producing an equivalent revenue stream if they had been retained by the government.

Prices in the wholesale electricity market have settled at historically low levels, making a mockery of claims in Spoehr's book that power companies are profiteering by manipulating the trading rules. Some of the original buyers of the power companies found they paid too much for the assets, and are exiting the industry. They are being replaced by new owners at more realistic prices.