[Greens-Media] Media release: Energy regulator plays catch-up on previous mistakes by cutting jobs and services

[John Kaye]

Energy regulator plays catch-up on previous mistakes by cutting jobs and services

Media release: 27 November 2014

The Australian Energy Regulator (AER) has released its draft determination for the NSW electricity wires and poles companies for the next four years. The AER has put an end to the expensive wires-and-poles gold-plating exercise with strong cuts to proposed capital investments but the massive restrictions on operating expenditure will cost jobs and undermine services, according to Greens MP John Kaye.

Dr Kaye said: "The Energy Regulator is desperately playing catch up on its own historically bad decisions.

"The same regulator that eight years ago approved massive and unnecessary investments in wires and poles is now trying to become the consumers' friend by slashing spending on new capital works.

"The hidden sting is in the cuts to allowable operational expenditure which means less maintenance and repair crews and more frequent and longer blackouts.

"The previous NSW Labor government failed to stop the state's distributors going to the AER to get approval to extract the cost of gold plating from consumers. The long term effects have been massive power bill increases and now pressure to lay off thousands of electricity sector employees.

"Cutting 37 percent out of the wires and poles capital expenditure proposals will save electricity consumers more than $3.7 billion over the next 4 years. However the 34 percent reduction in operating expenditure could pose a real threat to safety and reliability.

"Jobs will be lost and in the long run, blackouts will become more frequent.

"Prospects for the $20 billion electricity sale cash-splash promised by Mike Baird earlier this week just became a lot dimmer.

"While the market would have been expecting a reduction in allowable capital expenditure and lower rates of return, the operational expenditure restrictions will have a big impact on any private owner's bottom line.

"The uncertainty in profitability created by the AER's ruling is yet another reason for not pushing ahead with the Liberals and Nationals wires and poles privatisation," Dr Kaye said.
For more information: John Kaye 0407 195 455

John Kaye
Greens NSW MP

P: (02) 9230 2668 | F: facebook.com/john.kaye.mlc<http://www.facebook.com/john.kaye.mlc> | T: @johnkgreens<twitter.com/johnkgreens> | W: www.johnkaye.org.au<http://www.johnkaye.org.au/>
Mail: Parliament House, Macquarie Street, Sydney, NSW 2000

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