Energy giants say lower prices means cutting jobs
FAMILIES will sit in darkness for twice as long and hundreds of northern NSW jobs will disappear if sweeping slashes to the energy sector spending go ahead, energy retailers warn.
The Australian Energy Regulator has released its draft revenue determination to a chorus of heavy criticism from NSW's three electricity distributors, Ausgrid, Endeavour Energy and Essential Energy.
It plans to cut the state's electricity company spending budgets by up to 38% to bring down power prices - a target Networks NSW head Vince Graham said would result in the loss of 4600 jobs, with 1500 axed from regional NSW.
The push to rein in the companies' expenditure comes from a plan to cut electricity prices by 10% in 2015-16.
Mr Graham said instantly dissolving one-third of jobs was an impossible target when all three energy distributors had agreed not to force redundancies on workers.
"These are both field and administrative jobs and it will have a proportional impact all over the state," he said.
"Customers who wait half a day or a day to get back on the grid after storms, which are not uncommon on the north coast, will be waiting at least double the time to get their power turned back on.
"Any business in the state, facing up to 38% immediate reductions in operating expenditure, would find it to be a very significant challenge.
"For us it means 4600 job losses, with 1500 in regional NSW.
"We simply cannot get rid of one-in-three employees and continue to maintain a viable and safe network."
United Services Union energy and utilities branch manager Scott McNamara said the sector employed more than 2000 workers in northern NSW.
He said the AER draft determination would be impossible to implement.
"They haven't taken into consideration their legal requirements. All of these companies have enterprise bargaining agreements saying there will be no forced redundancies," he said.
"Even if they were successful in reducing so many staff, the organisations that run the network are at their peak load as it is.
"When a storm hit, it's all hands on deck.
"Any reduction means people will be out of power for a lot longer."
Mr Graham said efforts had already been made to reduce costs, with 2300 employees resigning or made voluntarily redundant over the past two years.
Networks NSW made its own submission before the AER draft determination was created, proposing to cut its capital programs - building new networks and infrastructure maintenance - by 40% on its previous regulatory period.
"We proposed 40% and the regulator proposed another 40% on top of that," Mr Graham said.
"We were confident we could sensibly manage our proposal over a five-year period."
Networks NSW also recommended it continue to cut its staff levels through natural attrition of about 5% a year.
"What the regulator is proposing is impossible. It's not practical and it's not legal..." Mr Graham said.
Submissions on the draft determination will be accepted until the end of January, with a final report due at the end of April.