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  • Vulnerable households and fuel poverty: Measuring the efficiency of policy targeting in Queensland

    Author(s)
    Simshauser, Paul
    Griffith University Author(s)
    Simshauser, Paul E.
    Year published
    2021
    Metadata
    Show full item record
    Abstract
    When Australia established its National Electricity Market (NEM) during the 1990s, reforms were focused on maximising economic efficiency. Little thought was given to distributional outcomes. However, by the 2010s sluggish growth in household incomes, sharp rises in electricity prices and material increases in quantities consumed through surging uptake rates of air-conditioning units led to the possibility of (hot climate) fuel poverty. In the Queensland region, longstanding customer hardship policy pre-dated the establishment of the NEM. With the benefit of hindsight, the policy was poorly configured as it focused exclusively ...
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    When Australia established its National Electricity Market (NEM) during the 1990s, reforms were focused on maximising economic efficiency. Little thought was given to distributional outcomes. However, by the 2010s sluggish growth in household incomes, sharp rises in electricity prices and material increases in quantities consumed through surging uptake rates of air-conditioning units led to the possibility of (hot climate) fuel poverty. In the Queensland region, longstanding customer hardship policy pre-dated the establishment of the NEM. With the benefit of hindsight, the policy was poorly configured as it focused exclusively on the aged population and was delivered by way of fixed payment. Low income households in the family formation cohort were excluded from the policy despite obvious need. In this article, Queensland's longstanding customer hardship policy is refined using pre-existing (means-tested) welfare mechanisms in order to target low income households including families, and the payment structure is altered from fixed ($ pa) to variable (% of the bill) while holding the budget constraint constant. Changes to policy targeting produce material improvements in horizontal and vertical efficiency while changes to payment structure further enhance vertical performance, with the incidence and depth of residual fuel poverty reduced.
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    Journal Title
    Energy Economics
    Volume
    101
    DOI
    https://doi.org/10.1016/j.eneco.2021.105405
    Subject
    Electrical engineering
    Electronics, sensors and digital hardware
    Mechanical engineering
    Applied economics
    Publication URI
    http://hdl.handle.net/10072/405965
    Collection
    • Journal articles

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