Electricity Companies Off the Hook for Failing to Save, Again

Thursday, 10 June 2004 10:00

The Tribunal has allowed $8 billion in spending while approving the networks' failure to undertake efficiency. While its measures for demand management are a small step in the right direction, its failure to penalise electricity companies for inefficiency reflects regulatory failure.

"The Tribunal should stop sitting on the fence and decide whether it is a rubber stamp for network spending or a regulator with the backbone to prevent monopoly excess," said Jeff Angel, TEC Director. "Allowing networks to recover costs on demand management is of little consequence in the face of an $8 billion spending spree. IPART must be weaned off its habit of allowing lazy, build-focused investment if they want to see any real efficiency."

"Networks have shown little interest in pursuing demand management and IPART is happy to approve this inefficiency year after year. It is consumers and the environment that are paying for this failure to regulate."

"IPART's disallowal of 'learn by doing' programs puts real pressure on the Government to fast-track the Demand Management Fund promised to the people of NSW. Electricity demand in the state has reached crisis proportions. If nothing is done to reign in network expansion, the state is set to be one of the most greenhouse polluting in the world."

"It is clear that the Demand Management Code of Practice has failed to encourage greater efficiency by networks. The Code of Practice should be upgraded to become a mandatory requirement, and DM targets for networks should be embedded in legislation."

The inefficiency of the networks is well documented. For example, 10 per cent of Energy Australia's network is used for less than 1 per cent of the time.

Demand management investments have a proven benefit to cost ratio of over 10:1. The Federal Government has confirmed that there is potential for up to 70% savings in the residential sector, huge reductions in electricity bills and greenhouse emissions, the creation of new jobs and massive GDP savings.
 

For further information

Contact
:
Jane Castle or Jeff Angel
Phone
:
61 2 9299 5680
Email
:
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WWW
:
http://www.tec.org.au/