ETU Media Releases

ETU Media Releases

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Reduced safety and reliability as energy regulator slashes spending

- Thursday, November 27, 2014

Power industry unions are warning NSW consumers to expect increased blackouts, reduced safety, and massive cuts to jobs and training following the federal energy regulator’s proposal to slash electricity network spending by up to 60 per cent.

The Electrical Trades Union and United Services Union, which represent the majority of the 12,000 Ausgrid, Endeavour and Essential employees across NSW, said the Australian Energy Regulator’s draft determination would impose drastic cuts to the money available to run, maintain and upgrade electricity infrastructure during the next five years.

Off the back of major infrastructure upgrades during the past five years, which have increased reliability and capacity in times of peak demand, the network businesses had sought to reduce expenditure by 40 per cent.

The AER rejected that proposal, instead delivering cuts of up to 60 per cent, which if implemented will result in more than 4,600 job losses across the state.

The unions said these cuts would come on top of 2,300 jobs already lost at Ausgrid, Endeavour and Essential since July 2012, almost halving the size of the workforce in just a few years.

“Massive expenditure cuts of this scale, introduced overnight, will have a massive impact on the reliability of electricity services and the safety of workers and members of the public,” ETU NSW secretary Steve Butler said.

“Blackouts will be more likely on the hottest and coldest days, as power demand surges, reconnections will be slower following natural disasters, bushfire risks are likely to increase, and the safety of workers and the public will be put at risk.

“It will also see thousands of jobs cut, many in rural and regional NSW, as well as all but eliminate any intake of apprentices across the sector over the next five years.

“For the federal regulator to impose cuts so far in excess of what the electricity network businesses themselves recommended — without any risk assessment on the impact to safety and reliability — reveals a complete failure to consider the public interest.”

USU energy manager Scott McNamara said the AER report had made no provision for redundancies, requiring job reductions that were unsafe and illegal under current enterprise agreements.

“The energy regulator has completely failed to examine how cuts of this magnitude would take place, with no provision for the redundancy payments that would be needed for thousands of workers, and no examination of how it will impact safety,” he said.

“These job cuts are not only illegal under the current enterprise agreements, but they would breach the Federal Government’s own Fair Work Act.

“These cuts claim to be modelled on practices in Victoria and South Australia, but the AER fails to acknowledge the fact that both these states suffer from load shedding — where power has to be cut to consumers because the network can’t meet demand.

“In Victoria, more than 100 lives were lost on Black Saturday in bushfires a royal commission found were sparked by poor maintenance on the electricity network.

“The AER would see a reduction of $460 million in the next four years in the money spent on managing vegetation around power lines to reduce bushfire risk.

“The last thing we want is for the people of NSW to end up with poorer services and reduced safety because the Federal Government’s energy regulator imposes unsustainable cuts to our electricity network.”

The unions said that, like the network businesses, they would be making submission to the draft determination opposing the scale of the cuts.

“The AER have got it wrong by not taking into consideration legal obligations and true operational requirements of the network businesses,” Mr Butler said.

“We believe in a publicly owned electricity network that is efficient, safe and affordable.

“A slash and burn approach to spending will deliver the opposite outcome, which would be bad for consumers throughout the state.”