Premier Mike Baird has been accused of commissioning a publicly-funded report based on fudged numbers and deceptive claims in a last-ditch effort to force his unpopular plan for privatising the electricity poles and wires through meetings of government MPs today.
The report, authored by EY, not only fails to examine the real power prices paid by consumers, instead examining the cost of “network charges”, but it relies on assumptions instead of actual electricity contract pricing, is loaded with exceptions and qualifications, and deliberately omits the most recent publicly available price data.
The document also exposes as a lie statements from Mr Baird and former Premier Barry O’Farrell in recent months that there were “no plans” for electricity network privatisation, with EY confirming they were formally engaged by NSW Treasury to carry out the research on February 21, almost four months ago.
Stop the Sell Off campaign director Adam Kerslake said the report, which compresses two decades of power policy in four states into just 16 pages, contains little credible power price analysis and is little more than a brochure to promote the plan to sell 49 per cent of the publicly owned companies Ausgrid, Endeavour Energy, Essential Energy and TransGrid.
“The reason this report examined network costs rather than the real prices electricity consumers pay is because the Premier knew that the privatised power networks in Victoria and South Australia would have come up short,” Mr Kerslake said.
“This report shows that those states have massively under-invested in their electricity network, yet the fact remains that the most recent report from the Australian Energy Regulator said power prices in South Australia were the highest in Australia, while Victorian prices are the same as those in NSW.
“Our warning that private owners of electricity assets will cut network investment in their quest for increased profits is also confirmed, with the figures showing chronic under-investment in the privatised states.
“This lack of investment was highlighted by the Victorian Bushfire Royal Commission, which found poor maintenance on power lines caused five of the deadly Black Saturday bushfires that claimed 173 lives.
“It is also the reason that during periods of high demand, such as extreme weather, the Victorian and South Australian networks often fail, while our publicly-owned network remains safe and operational.”
Mr Kerslake said the major reason behind increases to network charges in NSW in recent years were changes to the network reliability standard, which had delivered more reliable services.
"NSW electricity consumers have just paid for a comprehensive network upgrade, costing $15.2 billion between 2009 and 2014, to make sure they have access to a safe, reliable power supply,” he said.
“While this investment cycle has just come to an end in our state, it is about to commence in Victoria and South Australia, meaning network costs in those states will need to increase.
“Extraordinarily, now that taxpayers have funded the vital upgrades we needed to take our electricity network into the future, Premier Mike Baird wants to hand over these assets to his private sector mates.”
The EY report has also come under fire for its questionable methodology, reliance on assumptions rather than actual electricity prices, selective timeframes, and use of out-dated reports from the Australian Energy Regulator.
“We’re happy to have a debate built on facts, but what the Premier has delivered is a highly questionable report with holes so big you could drive a truck through them,” Mr Kerslake said.
“It has clearly been commissioned with the aim of delivering a predetermined outcome, which is why it focused on network charges rather than the actual prices paid by consumers.
“The only way to provide a truthful comparison to the people of NSW is by using the actual price consumers pay for their electricity — rather than the network charges which make up just one component of power pricing.”
Mr Kerslake said that the core issue of how privatisation would impact on electricity consumers, power workers, and the broader community had still not been addressed by the Premier.
“A seemingly endless procession of government MPs have come out in the last week to warn that privatisation will cause higher prices, reduced services, and the loss of jobs,” he said.
“The only way to avoid these outcomes is to keep these profitable power companies in public hands.
“Job guarantees are temporary, power price regulations are difficult, and the enforcement of service standards is challenging — as we saw with the Black Saturday bushfires — meaning whatever the Premier’s promises are, there’s no way he can deliver on them.
“Mike Baird seems hell bent on this ideologically-driven privatisation, leaving it up to his Liberal and National Party MPs to stand up to him, defend the best interests of their local communities, and vote down this plan.
“At the very least they must ensure the people of NSW get a say on the future of their most valuable public asset through a referendum on the future of our electricity network.”
Read the highly conditional EY report: Electricity Network Services: Long-term trends in price and cost