ETU Media Releases

The introduction of a ‘Code Warm’ protocol by the Berejiklian government, aimed to have the public sector reduce electricity demand during extreme weather, will do little to address the impact of years of mismanagement that have drastically reduced energy security for the people of NSW.

The Electrical Trades Union said the privatisation of electricity generation, transmission and distribution assets had stripped the NSW Government of the ability to directly address the threat of large-scale blackouts.

The union also highlighted the fact that several privatised power stations had been shut down by the new owners, reducing the state’s baseload power supplies in an attempt to drive up the prices their remaining power stations can achieve.

ETU secretary Dave McKinley said announcements such as the ‘Code Warm’ protocol were little more than window dressing and would do little to address the underlying issues.

“In February this year, NSW residents narrowly avoided large-scale rolling blackouts in the midst of a heatwave,” Mr McKinley said.

“The only reason the lights stayed on was that power stations in neighbouring Queensland and Victoria produced huge amounts of electricity that was transferred to NSW, while the state’s largest industrial power user had their supplies forcibly cut.

“With climate change, we know that weather events like this one are becoming more common and more extreme, yet the NSW Liberal and Nationals have spent the last six years selling off the generation and transmission assets that are vital to keeping the power on.

“Among the examples of government mismanagement is the sale of Wallerawang power station, near Lithgow, in 2014 to Chinese-owned Energy Australia. One of the first actions of this new private owner was to mothball the power station, which was capable of producing 1,000 megawatts of baseload power, to increase the profitability of their other generation assets.

“As a result of this sale and closure, the state’s electricity supplies were substantially reduced and our ability to address periods of peak demand was lost.

“While the Liberals and Nationals promised electricity privatisation would mean lower power prices, what we are increasingly seeing is less reliability and higher prices as profit-hungry foreign investors seek to maximise the return from these essential services rather than acting in the interest of the people of NSW.

“The Berejiklian government needs to admit that their claim that the private sector are better placed to provide an essential service like electricity was wrong, and start the process of directly investing in the power generation and distribution resources we need to keep the lights on in future.”

The axing of more than 2,600 front-line power workers since 2012 has left NSW at risk of falling victim to similar chaos to that experienced in South Australia during the past 24 hours, the Electrical Trades Union has warned.

The union said cuts overseen by the state and federal governments over the past four years had drastically reduced the number of skilled workers available to respond to major incidents, natural disasters and wild weather, leaving the public at risk of lengthy power outages.

ETU assistant secretary Dave McKinley said the number of front-line power workers across NSW had shrunk by a quarter since 2012, leaving the state increasingly vulnerable to the kind of extreme weather event that struck South Australia.

“What has occurred in South Australia in the past 24 hours could easily happen in NSW,” Mr McKinley said.

“While it is impossible to prevent network damage caused by wild winds and extreme weather, the ability to restore power for consumers is dependent on having the skilled workers available to respond.

“In NSW, we have seen more than a quarter of the entire workforce slashed in the last four years, including 1,385 workers at Ausgrid, 446 from Endeavour Energy, and 800 from Essential Energy.

“When the next disaster inevitably hits, this loss of skilled workers will have a devastating effect on response times and the speed at which power can be reconnected, particularly in the event of a state-wide natural disaster.

“The situation had been exacerbated by the NSW Government’s decision to respond to a recent ruling by the Federal Government’s energy regulator by further slashing the number of front-line power workers.

“The people of NSW have been hung out to dry by the NSW Government, with these massive cuts inevitably going to lead to major disruptions when future disasters strike.”

Mr McKinley said the union was urging NSW power companies to send immediate assistance to South Australia, in the form of workers and specialist equipment.

“Right now, our focusing needs to be on helping the people of South Australia by diverting all available resources and skilled labour to assist with restoring electricity services,” he said.

“The union is calling on the NSW distribution and transmission network companies to provide urgent assistance to our neighbours in their time of need.

“We are also urging them to take a good hard look at the resources they have available moving forward so they can ensure they have the skilled workers and specialist equipment needed to respond to similar events when they occur in NSW.”

The NSW Government is under pressure to close a potential loophole in legislation guaranteeing five year job protections as part of the Baird Government’s electricity privatisation program after Ausgrid revealed plans to overturn the agreement.

Christian Democrats MLC Rev. Fred Nile secured the five year employment guarantees as a condition of his support for the sale of majority stakes in Ausgrid and Endeavour Energy following concerns that jobs could be slashed by new private owners.

The Electrical Trades Union last week held urgent discussions with Rev. Nile after the largest of the companies, Ausgrid, wrote to the union revealing it would be pursuing a potential loophole which it believes will allow the introduction of forced redundancies.

The union welcomed Rev. Nile’s commitment to ensure the Baird Government lived up to the spirit of his negotiated job protections and indicated that he would be seeking to have a clause inserted into sale contract for the 99 year lease to ensure that the job protections are adhered to.

Rev. Nile also indicated that he would seek to amend the Electricity Network Assets (Authorised Transactions) Act when parliament resumes next month to close the loophole.

ETU secretary Steve Butler commended Rev. Nile’s commitment to ensure the job protection provisions he negotiated last year were adhered to by the NSW Government and potential buyers.

“When Mike Baird wanted his privatisation plans approved, he had no problem agreeing to the provision of five year job protections at Ausgrid and Endeavour Energy,” Mr Butler said.

“Yet a year on, and while Ausgrid is still in public ownership, we have already got management indicating they plan to exploit a loophole that they hope will allow unfettered cuts to jobs.

“The Baird Government needs to show good faith and ensure the job protections, which were negotiated by Rev. Nile as a key component of the privatisation going ahead, are in fact enforced.

“We welcome Rev. Nile’s proposed solutions, with the combination of a legislative amendment along with a strongly worded clause in the sale contract ensuring certainty for thousands of NSW power workers and the communities they serve.”

Mr Butler said Ausgrid had informed the union that it did not believe the job guarantees would be binding if it could succeed in having the Fair Work Commission agree to the introduction of forced redundancy, possibly through the termination of their current workplace agreement.

“This runs completely contrary to the intention of the NSW Parliament, which voted to support an amendment to legislation that unequivocally stated: ‘there are to be no forced redundancies of continuing employees during the employment guarantee period’,” he said.

The NSW Government has handed down an unsustainable Budget reliant on volatile income streams that will undermine the State’s economic position in the medium to long-term, the Electrical Trades Union has warned.

NSW Treasurer Gladys Berejiklian has relied on one-off cash injections from electricity network privatisation and a stream of volatile stamp duty income from an unprecedented housing bubble to deliver a modest budget surplus, rather than secure sustainable long term income sources.

The union said that without the sale of electricity transmission company TransGrid, the Budget would have been in deficit to the tune of $7 billion, while Treasury will miss out on hundreds of millions of dollars in future tax and dividends the company previously generated.

“Prior to the 2015 election, our union warned people about the negative fiscal impact caused by privatising income generating assets,” ETU secretary Steve Butler said.

“It was a concern that was shared by many others in the community, including merchant bank UBS that issued a warning that privatising the state’s electricity networks would be bad for the state budget in the medium to long term.

“Today’s budget confirms these fears, with the one off cash injection from the sale of TransGrid propping up otherwise ailing state finances.

“If you remove the one-off sugar hit from the privatisation of the electricity transmission network, todays budget tells a very different story: one of revenue short-falls, deficit and poor economic management.

“The NSW Liberals and Nationals are relying on voodoo economics to hide their ongoing failure to act on creating sustainable long term revenue streams to fund our state’s future needs.”

The ETU challenged both the NSW Government and Opposition to rule out further privatisation of the remaining publicly owned electricity assets.

“The government and opposition cannot rely on unsustainable one off cash grabs in the future delivered through the privatisation of essential services.”

“Today’s budget is a clear example that privatising income generating assets for a one-off cash injection is not the silver bullet to solving the state's long term infrastructure and financial challenges,” Mr Butler said.

“We are demanding the Premier and NSW Opposition Leader rule out further privatisation of the remaining publicly owned electricity networks, including regional electricity provider Essential Energy and the remaining 50 per cent of Ausgrid and Endeavour Energy.

“It is disappointing to see that we were right when we said privatisation was bad economic policy, and it is now up to the NSW Government to correct its mistake by halting the sale of Ausgrid and Endeavour Energy and ruling out any further privatisation of the remaining publicly owned electricity assets.”

The Australian Energy Regulator is being urged to strike a better balance between affordability, reliability and safety after the Australian Competition Tribunal today ruled there were flaws in the modelling and assumptions used to set NSW power prices required the process to be conducted again.

The Electrical Trades Union, which represent the workers that maintain and operate the state’s electricity network, said the decision vindicated their argument that massive cuts imposed by the AER were wrong and would negatively impact on service delivery and network reliability.

ETU secretary Steve Butler urged the AER to take a more sensible approach when remaking their determination, with a greater emphasis on striking a balance between price, safety and reliability.

“The people of NSW don’t just need an affordable energy supply, they need one that is reliable, well-maintained and safe,” Mr Butler said.

“Unsustainably slashing the money spent on maintaining, repairing and operating the network simply leads to inadequate infrastructure that may spark bushfires, fail in periods of extreme weather, or result in a growing number of blackouts and service disruptions.”

Mr Butler also hit out at Opposition Leader Luke Foley over his support for the flawed AER process.

“Luke Foley simply has no idea when it comes to delivering an affordable, safe and reliable electricity network that best serves the interests of the people of NSW,” he said.

Steve Butler also said the decision should now force a rethink of the significant job cuts being pursued by Essential Energy, Ausgrid and Endeavour Energy.

“Thousands of proposed job cuts being pursued by the publicly-owned electricity companies Essential Energy, Ausgrid and Endeavour Energy, were based on the flawed AER determination and should now be abandoned,” Mr Butler said.

“The loss of loyal, highly-skilled workers across the state is short-sighted and will inevitably impact on consumers through poorer services in the future.”

The decision by the Tribunal includes an order that the AER go back to the drawing board and remake their operating expenditure decision using a broader range of modelling and benchmarking using a "bottom up" approach.

That ruling aligned with the findings of an extensive independent review — commissioned by the ETU and conducted by economist Thomas Devlin —  that identified serious flaws in the AER’s modelling and assumptions including:

  • the use of customer density instead of line length;
  • a failure to breakdown operating expenditure into subcomponents, making it impossible to credibly identify potential drivers of inefficiency;
  • an over-emphasis on labour costs, based on questionable research;
  • a simplistic approach to asset life when comparing networks; and
  • relying on benchmarking rather than a ‘bottom up’ approach considering process and structure.

You can read Thomas Devlin's report and findings here.

As NSW gears up for a period of hot weather the Electrical Trades Union (ETU) has raised concerns over the NSW Electricity Network’s ability to cope in what will be forty degree days as we approach the middle of summer.

ETU Secretary Steve Butler said that cuts to staffing levels and a reduction in network investment by the NSW Government have left the network vulnerable to periods of high demand like those presented this week with extremely hot weather forecast.

“What we have brewing is the perfect storm where the Baird Government has drastically cut investment in the NSW electricity network over the past 18 months while at the same time they have sacked more than one thousand frontline electricity workers across the state.” said Steve Butler.

“When the mercury rises to levels around forty degrees and above what we see is thousands of businesses and households crank up their air conditioner which puts and enormous amount of pressure of the electricity network as the demand for power peaks.”

“In the past the electricity network has coped well during these extreme weather periods but we now hold serious concerns about the Network’s ability to cope due to cuts to investment and massive staff reductions.” said Mr Butler.

“In the past year alone Ausgrid have slashed 879 electricity workers while Endeavour Energy has cut 155 staff and regional network operator Essential Energy has axed more than 350 regional jobs”

“Coupled with frontline staff cuts is a reduction of almost $500 million in network investment in the past year meaning the network we had twelve months ago is expected to cope with the demands of today.”

“The feedback from electricity workers is that the network is not in good shape and recent cuts to staff numbers and investment is having a material effect.” Mr Butler said.

“So today we are simply warning members of the public not to be surprised if the air conditioner stops working or your refrigerator is blacked out because we believe the decision of the Baird Government to cut staff numbers and slash network investment will come home to bite the general public at some time.”

“On top of these cuts, last year the NSW Government quietly reduced the amount of compensation customers can claim in the event of prolonged blackouts to a measly $80 per year but only when certain circumstances are met.”

“When your air conditioner, refrigerator and lights go out this summer remember to thank Mike Baird and his government for the deep cuts they have made to the NSW electricity sector but don’t bother emailing because your computer and internet connection will probably not be working.” Mr Butler finished.

Executives at publicly-owned electricity network operator Endeavour Energy received almost $4.6 million, including bonuses of up to $165,474, at the same time they claimed challenging financial conditions left them with no choice but to axe 120 jobs across Sydney, the Illawarra, and Southern Highlands.

The company’s annual report, quietly released this month, also revealed that after tax profits for the last financial year were $243.6 million, while the company paid a total of $270.8 million to the NSW Government.

In addition to superannuation and other benefits, Endeavour Energy chief executive officer Vince Graham’s wage and bonuses totalled $953,444, while chief operating officer Rod Howard was paid $558,147.

In total, executives at the company received almost $4.5 million, with base wages of $3,857,176 along with $443,222 in bonuses.

The Electrical Trades Union slammed the culture of executive greed, saying it was extraordinary that at the same time apprentice programs were being axed and 120 jobs cut, management were pocketing huge salaries and annual bonuses that were much larger than most employees’ total salaries.

“Endeavour Energy is meant to be a publicly owned company delivering an essential service to millions of people in Wollongong, the Southern Highlands, Blue Mountains and much of Sydney,” ETU secretary Steve Butler said.

“Instead, it is being run as a profit-making machine, with the NSW Government gouging $270.8 million from the electricity bills of homeowners and small businesses, while senior management take home huge salaries and massive bonuses.

“The community was told Endeavour Energy had no choice but to slash jobs and services because of the financial challenges it faced, yet now we see that those cuts were only necessary because the Baird Government and the individual executives have been lining their pockets.

“What is even more disturbing is that this executive management team and their actions have been supported whole-heartedly by the NSW Government, including local Liberal and National Party MPs.

“These are the actions of a company and executive team that are totally out of touch with the communities they are meant to serve, and quite frankly completely out of touch with the expectations of voters about how publicly-owned utilities should behave.”

Click here to read a copy of the Endeavour Energy 2014-15 Annual Report.

Endeavour Energy management has today revealed details of 120 job cuts from workplaces in Sydney’s west, Wollongong, and the Southern Highlands.

In a briefing to unions, Endeavour Energy confirmed that these cuts were in addition to 115 staff who had taken voluntarily redundancies since July and that a further phase of 135 job cuts would take place later this year.

The Electrical Trade Union and United Services Union, which represent Endeavour Energy workers, expressed concern that alternative options to maintain employment had not been explored, and that the company was pressing ahead with forced redundancies for the majority of the cuts announced today.

The company revealed that 39 jobs would be cut in western Sydney, 7 in the Illawarra, and 3 in the Southern Highlands, however it did not disclose the location of 30 staff labelled “redeployees”, or the location of a further 41 voluntary redundancies.

ETU deputy secretary Neville Betts criticised the fact that the company had only released location details for a fraction of job losses.

“Between the job cuts announced today, and the 115 people who have already taken voluntary redundancies, there have been 235 positions cut across western Sydney, the Illawarra and the Southern Highlands,” Mr Betts said.

“Yet Endeavour Energy has provided the locations of less than 50, meaning the true number of jobs cut from each area could be four or five times what has been revealed today.

“The company also confirmed that another phase of 135 terminations can be expected later this year.”

Mr Betts said the union had written to government and opposition MPs in electorates impacted by the cuts, urging them to support a plan to save local jobs at the publicly-owned electricity network company.

“It is extremely disappointing that Endeavour Energy management have not taken up a range of union proposals that would have substantially reduced today’s job cuts,” Mr Betts said.

“We have provided details of these proposals — including roster changes, job sharing, expansion of non-regulated work, and a mix and match voluntary redundancy program and re-entering the contestable works market — to MPs and urged them to make urgent representations to Premier Mike Baird on behalf of local Endeavour Energy workers.

“We have also called on them to publicly oppose these job cuts, support the retention of highly skilled front-line power jobs, and raise the alternatives to job cuts in their party room meetings.”

USU energy manager Scott McNamara challenged claims that job cuts had been forced on management by the Australian Energy Regulator.

“Endeavour Energy claim their hands are tied, that they need to cut these jobs, but it simply isn’t true,” Mr McNamara said.

“TransGrid, which operates the high voltage transmission network, had a 25 per cent reduction in their regulated revenue, yet by implementing the kind of policies we have advocated for at Endeavour Energy they have said there will be no need for job cuts.

“AER CEO Michelle Groves made the same point earlier this year, when she told a NSW Parliamentary Inquiry that: ‘We have not made decisions requiring particular staffing levels for these businesses’.”

Mr McNamara said the public needed to understand that these cuts were just the first phase.

“Endeavour Energy have confirmed today that they expect to announce another wave of 135 job cuts by the end of the year,” Mr McNamara said.

“In total, with jobs cuts announced today and staff that have left over the last two months, that will mean nearly a fifth of the company’s workforce gone in just six months.

“Not only will this have devastating impacts on many local communities, it will result in a reduction to services for consumers, slower responses following emergencies and natural disasters, and poorer maintenance.”

MEDIA COMMENT: Neville Betts 0408 520 400

 

ENDEAVOUR ENERGY JOB CUTS BY LOCATION*

*Job losses at each location likely to be higher as Endeavour Energy have not announced the location of 30 "redeployees" and 41 voluntary redundancies.

Endeavour Energy employees face a sleepless night as they await the announcement of 120 job cuts that form part of the "first phase" of a total 254 job cuts at the publicly-owned electricity network company, which will be revealed tomorrow afternoon.

The Electrical Trades Union said the announcement was expected to involve the loss of positions based in Sydney’s south and west, Wollongong, the South Coast, Southern Highlands, Blue Mountains, and parts of the Central West.

Earlier this week the union wrote to government and opposition MPs whose electorates are impacted by the cuts, urging them to support a plan to save local jobs at the publicly-owned company.

The ETU proposal includes roster changes, job sharing, expansion of non-regulated work, and a mix and match voluntary redundancy program — all of which would result in a reduction to forced job cuts.

In the letter, the union called on MPs to make representations to Premier Mike Baird on behalf of local Endeavour Energy workers, raise the issue in party room meetings, and to make a public statement opposing these job cuts and supporting the retention of highly skilled front-line power jobs.

The correspondence also outlined how TransGrid, which operates the high voltage transmission network, had implemented similar proposals, resulting in no jobs being lost despite the Australian Energy Regulator imposing a 25 per cent reduction in the company’s regulated revenue.

ETU deputy secretary Neville Betts said Endeavour Energy workers have been told they will be notified tomorrow afternoon (Thursday 10 September) if they are among the first phase of job cuts, with the company also due to release a full list of which depots will suffer staffing reductions.

“Several thousand men and women will lay in bed tonight, unsure whether they will still have a job tomorrow, and how their families will survive if they are among those facing the chop,” Mr Betts said.

“This is the first round in what are devastating cuts on any scale and we are calling on all MP’s, whether from the government or opposition, to stand up and protect local jobs.”

The union will provide further comment tomorrow afternoon following the notification of Endeavour Energy workers.

Disclosures by NSW Government-owned electricity network companies have revealed almost five million dollars was spent in just four years to hire external law firms and private investigators to attack their workforces over disciplinary and industrial matters.

Documents released under the Government Information (Public Access) Act revealed Ausgrid, Endeavour Energy, Essential Energy and TransGrid spent $4,604,703 on external legal services between 2010 and 2014.

An additional $223,832 was spent on private investigators in 2014, with Essential Energy revealing that more than 90 per cent of their spending on these services involved workers being investigated for “alleged non-compliances” with the company’s code of conduct.

The GIPA documents showed Ausgrid had spent $1,276,013 on industrial matters, $181,673 on disciplinary matters, and $40,569.20 on private investigators. Essential Energy paid $1,457,824 for industrial matters, $21,398 for disciplinary, and $67,847 for private investigators. And Endeavour Energy reported $1,420,000 for industrial matters, $150,000 for disciplinary matters, and $48,149 for private investigators.

Representative from the Electrical Trades Union and the United Services Union said it was outrageous that millions of dollars in public money, that came directly from consumers, had been spent by the management teams at the four public companies to attack their own workforces.

Electrical Trades Union secretary Steve Butler also highlighted the vast difference between the amount spent by the four companies, with those under the control of Networks NSW chief executive Vince Graham spending on average nine times as much to attack workers and unions.

“Networks NSW have been crying poor in recent months, announcing that 2,800 jobs at Ausgrid, Essential Energy and Endeavour Energy need to be slashed,” Mr Butler said.

“What they haven’t revealed is that they were able to find more than a million dollars a year to spend on external law firms and private investigators solely to attack the hard working men and women who maintain our electricity network and respond during natural disasters.

“Transgrid, who announced no job losses following the determination of the Australian Energy Regulator, has also been shown to have far more modest spending habits compared to the remaining three electricity network companies who are currently slashing jobs.”

United Services Union energy manager Scott McNamara said it was particularly concerning to discover that in addition to the large amounts spent attacking workers and their conditions, private investigators had been recruited to spy on employees without any disclosure.

“Last year alone, nearly a quarter of a million dollars in public money was handed over to private investigators so they would spy on the hard-working employees of these four companies,” Mr McNamara said.

“The fact that such large sums were involved, and the spending was spread across all four companies, shows this approach has become common practice among management teams at war with their own staff.

“The NSW Government tries to blame workers for electricity prices, but what they don’t tell consumers is that millions of dollars from their power bills have been poured into the pockets of large law firms and private investigators.

“This kind of behaviour may be commonplace in communist North Korea, but it is not acceptable in NSW, where committed workers dedicate their working lives to serving the public by ensuring they have a safe, reliable and affordable electricity supply.”