ONE decision, two vastly different reactions. While yesterday consumers were welcoming news of a forecast drop in their electricity bills, power providers were warning of large-scale job losses as they struggle to absorb the cuts.
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It comes after the Australian Energy Regulator (AER) released its final determination on the amount of revenue energy distributors in NSW can collect from customers, and it’s certainly a win for households, with rural and regional homes in line for savings of more than $300 a year.
From the point of view of the distributors, though, it’s a very different story, with unions yesterday warning of job losses and overtime cuts, leading to poorer response times, downgraded infrastructure and reduced network efficiencies.
Essential Energy has already warned of 1500 job losses across its vast network, a reality that would hit country communities very hard.
The NSW government, too, must be considering the impact of the AER decision on its plans to partly sell the state’s poles and wires, one of the big-ticket items it took to voters back in March.
There’s no doubt something had to give though, given the double-digit increase in household electricity disconnections due to unpaid bills in recent years.
The Australian Council of Social Service has urged the distributors to now pass on the full savings to consumers, saying prices have been “too high for too long”.
Others have accused the power companies of crying poor, saying the revenue caps were “entirely appropriate”, given power demand wasn’t expected to appreciably grow, networks had already substantially overbuilt the network, and the proposed cost of financing networks “bore no resemblance to market reality”.
With changes due to kick in in July, the next few months will be tense, on all sides, with unions vowing to float “viable alternatives” to job losses, with the government and the companies at the centre of the changes.
Union representatives have already highlighted a number of these, including companies 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.
As a community we should all be wishing them luck in these endeavours, because a $300 annual fall in our electricity bill may be a big price to pay for longer unemployment queues and a depleted electricity network.
