ETU Media Releases

ETU Media Releases

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Energy Regulator condemns NSW consumers to reduced services without any guarantee power prices will fall

- Thursday, April 30, 2015

Unions have warned that electricity consumers have been condemned to poorer services, reduced maintenance, and slower emergency response times following the decision of the Australian Energy Regulator.

The AER decision, which takes effect from July 1, sets the revenues that publicly-owned network companies Ausgrid, Endeavour Energy, TransGrid and Essential Energy can charge private electricity retailers.

The final determination imposes cuts to revenues of 33 per cent for Ausgrid, 31 per cent for regional provider Essential Energy, 28 per cent for Endeavour Energy, 25 per cent for TransGrid, and 32 per cent for the ACT’s electricity network operator ActewAGL.

The Electrical Trade Union and United Services Union, which represent workers at the  electricity network companies, said the savage cuts would lead to substantial reductions to service delivery, maintenance, and emergency response times.

They also highlighted that neither the AER, nor the NSW Government, had any legal power to force private energy retailers to pass price reductions on to consumers after retail electricity pricing was deregulated by the Baird Government in July 2014.

ETU secretary Steve Butler said there was no doubt that the response to last weeks major storm event, which cut power to a quarter of a million homes, would have been substantially slower if these cuts had already been in place.

“The Federal Government’s energy regulator has condemned the people of NSW to more blackouts, slower reconnection times, reduced maintenance, and a loss of specialist skills, all without guaranteeing consumers will see one cent of savings on their bills,” Mr Butler said.

“We saw last week why having adequate numbers of highly skilled professionals working on the electricity network is essential.

“Had these cuts already been in place there is no doubt that hundreds of thousands of consumers would have endured significantly longer delays in having electricity services restored to their homes.”

USU energy manager Scott McNamara said that while the cuts could result in up to 4,000 job cuts across NSW, unions were working with the NSW Government to find alternatives.

“The AER determination is about the revenue network companies can recover from their ‘regulated asset base' and is not connected to employee numbers,” Mr McNamara said.

“The AER determination does not limit the amount of income these businesses can generate from other sources, including in area’s such as contestable work.

“There are many alternatives to mass sackings, and we will not allow management to use the AER determination as an excuse to get rid of thousands of workers ahead of the NSW Government’s planned privatisation.”

Both unions highlighted their commitment to work with the network companies, Networks NSW, and the Baird Government, to identify alternatives to job and service cuts.

“There are a range of alternatives to job cuts that we have already identified,” Mr Butler said.

“There include re-entering the market for contestable work, eliminating the executive bonus scheme, looking for opportunities around the National Broadband Network rollout, retraining and redeploying displaced workers, and using early retirement schemes.

“We are also deeply concerned for current and future apprentices and their ability to secure full time ongoing employment.

“Cuts of this scale risk losing a whole generation of workers — and the specialist skills they possess — leading to inevitable skills shortages in the future.

“One thing that can be guaranteed is that no region of NSW will be spared if massive job cuts are implemented.”

Mr McNamara said the AER had to be honest with consumers, and admit they were powerless to ensure any cuts flowed through to power bills.

“The AER is powerless to force electricity retailers to pass on these reductions, and the experience of Victoria has been that similar reductions simply resulted in retailers taking the additional money as profit,” he said.

“So consumers will receive poorer services, but may not see any financial benefit.

“The AER seems to be relying on the goodwill of private retailers to pass on possible saving.”

The unions also highlighted that the AER was bound by a set of rules when making determinations, and they these had been set out by energy minsters from each state and territory.

They were last agreed to in 2012, when Chris Hartcher was Energy Minister in the O’Farrell Government.