Mum and dad left to pay …

AURORA SAYS THEY WERE GOUGED $20 MILLION FOR FCAS BUT HYDRO SAYS IT WAS ONLY $300,000

Why Did Labor Ministers Fail to Defend Hydro or Correct the Record?

The Tasmanian Greens today called on Energy Minister Bryan Green to explain why he, or his Labor predecessor, failed to defend Hydro Tasmania from allegations that it gouged Aurora Energy over the fee for Frequency Control Ancillary Services (FCAS) in 2009, following today’s (Tues) stunning revelation that the amount of money in question was $300,000 and not the $20 million publicly claimed by Aurora at the time.

Greens Energy spokesperson Kim Booth MP queried how the Minister could allow Aurora to apparently blatantly misrepresent the truth, mislead the public, and damage Hydro’s reputation, without intervening to sort out the issue, defend Hydro Tasmania, or correcting the record about the $300,000 that Hydro was actually charging Aurora for FCAS.

Mr Booth said it was also revealed under questioning that Hydro spent $700,000 defending itself from Aurora’s allegations, and said that the expenditure of that money raised serious probity issues for the Labor government which remained silent during the entire FCAS controversy.

“Last year Aurora claimed that Hydro was ruining its business through the imposition of a $20 million FCAS fee, and made complaints about Hydro’s behaviour to the ACCC and to the Economic Regulator, but according to sworn evidence given on oath today, we find that the actual amount was only $300,000. The Minister now needs to explain this disparity, as well as the reason why Labor has stood back and failed to correct the record about the amount of this fee,” said Mr Booth.

“Now that the FCAS payment has apparently been revealed as $300,000 and not the $20 million originally claimed, Minister Green needs to explain why he has taken so long to correct the record, and why he has only done so now under Parliamentary scrutiny in Government Business Enterprise hearings.

“This issue once again raises questions about the appropriateness, or not, of having the same Minister responsible for both of these squabbling GBEs.

“The only losers from this bizarre two-headed circus are the mum and dad electricity users who will ultimately pay Hydro’s $700,000 bill to defend what now appear to be unfounded allegations made by Aurora,” said Mr Booth.

And,

5% POWER PRICE CAP EXPOSED AS POOR PUBLIC POLICY
Greens Only Party Consistent- Before & After Election
Kim Booth MP
Greens Energy spokesperson

The Tasmanian Greens today welcomed the release of the Auditor-General’s Special Report, Election promise; five per cent price cap on electricity prices, saying that it made clear the proposed cap was not affordable in the short-term, and would result in higher prices in the future.

Greens Energy spokesperson Kim Booth MP said that the Greens were the only Party who consistently warned that a one year cap on power prices was poor public policy as it would only defer sharper price hikes in the future while doing nothing to address the underlying cause.

Mr Booth also said that it was due to these serious concerns of future power price hikes that the Greens negotiated the current independent review of the State’s Energy Sector, which will contribute to the formulation of a long-overdue State Energy Strategy, as well as secured the Cost of Living Strategy currently underway.

“The Greens have consistently maintained that imposing a short-term five per cent on power prices was bad public policy when Labor announced it as an election commitment, and one that would only result in higher power prices down the track, which we reiterated when the Liberals attempted to revive it recently, and our position has been vindicated by this report’s findings,” Mr Booth said.

“In relation to imposing a five per cent price cap the Auditor-General’s report concludes, ‘even if it had been delivered as originally promised, it would not shield Tasmanian electricity consumers from rising prices in the long term’.” [1]

“Instead of short-term knee-jerk political opportunism, the Greens put our effort into establishing a mechanism to drill down into the causes of our energy sector’s failings, and negotiated the independent Energy Review currently underway. This was the constructive and responsible approach.”

“This report makes clear that a quick fix band aid solution, most recently pushed by the Liberals, would have been financially irresponsible and would clearly leave the Tasmanian consumer worse off.”

“Rather than exploit the hardship experienced by many in the community for political grand-standing purposes, we need to focus on getting to the bottom of the problem, identify real long-term solutions and get our energy sector onto a sustainable and equitable footing as soon as possible,” Mr Booth said.

[1] Auditor-General Special Report No. 94, Election promise: five per cent price cap on electricity prices, November 2010; pg 26.