ENERGY BLOWOUT REWARDS BIG SPENDERS

Monday, 07 June 2010 10:24

The cost of living for Victorian families will skyrocket unnecessarily due to last Friday’s approval by the Australian Energy Regulator (AER) of a massive spending spree by the state's five electricity distribution companies. The determination, released late on Friday, approves $3.4 billion being spent on building more expensive, polluting energy infrastructure in Victoria, locking out bill-reducing energy savings, Total Environment Centre (TEC) and Environment Victoria said today.

TEC Senior Campaigner Jane Castle said: "This is a slap in the face for Victorian families by energy ministers Peter Batchelor and Martin Ferguson who are rewarding energy companies for ignoring bill-reducing energy efficiency. The AER must send Victoria’s distribution businesses back to the drawing board, and have them propose real demand management and energy efficiency programs."

Victoria’s five electricity distribution companies, Jemena, SP AusNet, Citipower, Powercor and United Energy, have had over $3.4 billion of capital investment approved in the AER’s Victorian Draft distribution determination for 2011-2015, released last friday. The companies, however, propose to spend less than 2% of this amount on energy saving measures, despite their being many times more cost-effective than building more ‘poles and wires’. The $3.4 billion investment program will be covered by rising electricity bills.

“Energy ministers and regulators are presiding over an energy policy disaster. This is an expensive and irresponsible addiction to infrastructure. Electricity market laws must be radically reformed so that retailers and networks are rewarded for delivering energy savings, not higher bills and more greenhouse pollution,” said Castle. “The Prime Minister’s Task Group on Energy Efficiency has a real opportunity to step in and recommend a complete overhaul of the National Electricity Market, something long overdue."

Environment Victoria Campaigns Director, Mark Wakeham, said: “Instead of approving expensive investment in new infrastructure that will drive up household electricity bills, the regulator should be requiring that distributors get serious about reducing demand for electricity through energy efficiency and load shifting. For example businesses could be paid to reduce their energy use and both businesses and consumers would be better off and greenhouse pollution would be lower.”

The Victorian determination puts total network capital expenditure in NSW, Victoria, Queensland, South Australia, ACT and Tasmania at over $40 billion over the next five years - on par with the National Broadband Rollout, but with virtually no public consultation.