Essential Energy jobs in limbo: company considering how to slash expenditure

16/08/2018 Posted by admin

POWER PLAY: Jobs are on the line in the electricity battle over operating expenditure.ESSENTIAL Energy employees in the Orange electorate are still no closer to finding out whether their jobs are safe, with management of the electricity distribution business still working on a response to draft restrictions on the revenue it can charge customers.

In November, the Australian Energy Regulator (AER) released its draft decision to slash Essential Energy’s operating expenditure by 38 per cent across five years.

Essential Energy management asked to charge $5.56 billion, but the regulator only allowed $3.68 billion – the electricity distributor has since flagged 1500 jobs could go and it would be unable to place its graduating apprentices.

According to Electrical Trades Union (ETU) estimates, 170 people in the Orange electorate are employed across five Essential Energy depots – 90 in Orange, 40 in Mudgee, 20 in Wellington and 10 each in Canowindra and Molong.

Based on a total estimated workforce of 3500, the ETU estimates as many as 73jobs could go within the electorate.

An Essential Energy spokeswoman did not confirm the estimates, saying Networks NSW was working with the three NSW electricity distribution businesses – Essential Energy, Ausgrid and Endeavour Energy – to submit responses to the regulator’s draft decision.

“If approved, the AER’s decision would see Essential Energy’s operating expenditure cut by around 38 per cent over the five years to 2019 and possibly mean lengthy response times to power supply interruptions,” she said.

In its report, the regulator did not accept Essential Energy’s capital expenditure forecast of $2.6 billion or its operating expenditure of $2.3 billion, estimating forecasts of $1.9 billion and $1.4 billion respectively.

Essential Energy’s request to increase public lighting charges by 100 per cent in some local government areas was also knocked back in favour of a smaller increase.

The report said a lower rate of return – 7.15 per cent, down from 10.02 per cent during the height of the global financial crisis – would reduce Essential Energy’s revenue requirements and help reduce electricity prices.

Prices for the average residential household are expected to drop by $346 in 2015-16 if the changes go ahead.

ETU NSW secretary Steve Butler said energy reliability would be affected if revenue streams were cut and the regulator failed to account for risks to safety in its assessment.

“Blackouts will be more likely on the hottest and coldest days, as power demand surges, reconnections will be slower following natural disasters, bushfire risks are likely to increase, and the safety of workers and the public will be put at risk,“ he said.

“It will also see thousands of jobs cut, as well as all but eliminate any intake of apprentices across the sector over the next five years.

Networks NSW chief executive officer Vince Graham will present on behalf of Networks NSW at an AER pre-determination conference on December 8 in Sydney and revised proposals are due to the regulator by January 20.

The final decision on revenue will be made in May.

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This story Administrator ready to work first appeared on Nanjing Night Net.

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