NSW LABOR ACTION CAUSES NSW GOVERNMENT-OWNED ESSENTIAL TO BACKFLIP ON HIGH BUSH POWER BILLS

4 December 2017

Media Release


Today, as a result of NSW Labor bringing a secret document to light, State Government-owned electricity provider Essential Energy has agreed to not impose price rises of 15 per cent which it won in a court battle against the Australian Energy Regulator (“the AER”).

Essential Energy was caught out lying over why it went to court to fight price cuts for household and small businesses in regional NSW. NSW Labor revealed this in the media during October and pursued the issue with the AER in writing and during the public hearings of the Legislative Council Select Committee on Electricity Supply, Demand and Prices in New South Wales.

Already under fire for giving its CEO at 15 per cent pay rise while charging its customers stiff price rises, Essential has announced that it will not implement the price rises it won against the AER.

In 2015 the Independent Australian Energy Regulator recommended price cuts of $313 for households and $528 for small businesses but Essential said lower prices would “compromise the safety and reliability of the network service”.

Then-Treasurer, now Premier Gladys Berejiklian, launched a legal action on behalf of Essential, Ausgrid and Endeavour to oppose the reduction in power bills because it wanted to get a better sale price in its privatisation of the poles and wires.

Through Freedom of Information laws, Labor revealed that the State Government lied about its reasons for not wanting the savings to go through.

May 2017 confidential briefing document prepared by Essential – which is 100-per cent owned by the NSW Government – admitted that if it lost the case against the regulator then the “impact of this outcome on the business today would be minimal”.

Up to 800,000 Essential customers across regional NSW faced paying around $200 more for electricity – just to line the pockets of the company with extra profit.

This was revealed during the Cootamundra and Murray by-elections in October. It was also pursued by the Shadow Minister for Energy with the AER and during the hearings of the Legislative Council Select Committee on Electricity Supply, Demand and Prices in New South Wales.

Quotes attributable to Leader of the Opposition in the Legislative Council and Shadow Energy Minister Adam Searle:

“This is a victory for Essential’s 800,000 customers across rural and regional NSW, who will now not have to pay an extra $200 on top of the staggering price rises they have already had to bear.

“But make no mistake: it is nothing short of a scandal. Essential and the Berejiklian-Barilaro Government claimed that if these price cuts went through then there would be catastrophic consequences. Now it is abandoning them, because it is clear they did not need the extra revenue – which was just going to be extra profit for the company.

“The company has responded to customer outrage over this and the payment of an extra 15 per cent/$117,000 plus pay rise to its CEO.

“While the Labor Opposition welcomes this overdue decision, but where were the Premier and the Minister for Energy on this issue? They failed to act to protect customers, leaving it to the NSW Labor Opposition to step in and protect consumers.”

 

See: Letter from Adam Searle to the Chair of the AER concerning the AER final 2014-19 Revenue Determination and Essential Energy, dated 14 November 2017;

And see: Letter from the Chair of the AER in response to Adam Searle, dated 15 November 2017.