Councils Oppose Essential Energy Price Increases

Chair of the Riverina Eastern Regional Organisation of Councils (REROC), Cr Paul Braybrooks OAM, has criticised Essential Energy for the scare campaign it is running in an attempt to gain support for massive increases to its service charges for poles and wires.
“In what can only be described as a cynical exercise to manipulate public opinion in relation to this very important issue, Essential Energy has written to all councils in our region warning that if they don’t get the increase they want they will be cutting jobs and downgrading services” Cr Braybrooks said.
Councils in the REROC region have been particularly vocal about the proposed increase to street lighting, the average price increase proposed by Essential Energy for the region is 98% with Temora Shire facing a 118% increase in pricing and Wagga Wagga City facing an 86% increase.
“The proposed increases will mean council budgets will take a big hit. Temora Shire will have to find another $31,500 to cover the additional charges while Wagga Wagga City will see its service charge rise by over $285,000. At a time when councils are rate pegged to 2.6% and are constantly told to do more with less, it is untenable that Essential Energy, a wholly owned State Government entity, should even consider that the proposed charges are reasonable,” Cr Braybrooks said.
Overall, the REROC member councils will pay an additional $565,000 for Essential Energy’s services taking the total annual bill to almost $1.2 million. The proposed increases were subject to review by the Australian Energy Regulator (AER). The Regulator released its Draft Determination in late November which instead recommended a 5% increase for street lighting for the 2014-2015 period.
“We now find that as a result of the Draft Determination Essential Energy is in full PR mode, predicting dire consequences if it doesn’t get its own way. Keeping in mind that Networks NSW generated a $1.4 billion profit in 2013 and that it provides a monopoly service, we believe that it is fitting that the AER closely analyse the proposed increases to determine if they are in fact warranted.”
REROC has now written to the Premier, the Treasurer, the Minister for Finance, local members and the new Leader of the Opposition to voice our concerns about the approach Essential Energy is taking.
“Scare mongering is an inappropriate tactic in the circumstances. There is an independent arbiter, the AER, that looks at the increases that a monopoly provider is proposing and determines whether they are fair and reasonable. The AER has found that there was room for Essential Energy to operate more efficiently and effectively and as a result the Draft Determination has recommended a much smaller price increase. Essential Energy is a wholly owned NSW Government entity and it is not unreasonable to expect that it play by the rules.”
Essential Energy, consumers and councils have an opportunity to respond to the AER’s Draft Determination by 13 February.