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Engineers warn regulator cuts could jeopardise electricity supply, bushfire safety

Electricity price cuts proposed by the regulator could compromise Canberra's power supply, lead to thousands of job losses and pose "catastrophic" safety risks to NSW and ACT residents if they were introduced, the engineers' union has warned. 

Professionals Australia has weighed in on the Australian Energy Regulator's draft decision to slash operating and expenditure costs on NSW and ACT electricity distributors by more than one-third for 2014-19. 

In November, the regulator said the revenue cuts to ActewAGL, Ausgrid, Endeavour Energy, Essential Energy and TransGrid would contribute to a 10 per cent drop on the costs of electricity bills in 2015/16, followed by small increases over the next three years. 

But union officials have raised concerns over the impact of the pricing restrictions on employment and infrastructure in a submission to the regulator, and detailed "significant and numerous risks to safety, reliability, quality and professional capacity" the proposal could generate across the sector.

A spokesman for the regulator said it was currently assessing the union's submission. 

Professionals Australia chief executive Chris Walton said members were "extremely concerned" the cuts would compromise long-term electricity infrastructure management and "prioritise cost over safety and reliability".


"The regulator is not only proposing savage cuts, but they have given no transition period for the industry to step toward change.

"This will result in important work being abandoned immediately, and increase risk and danger exponentially.

"Professional engineers are very concerned that these cuts would wipe out huge amounts of technical expertise, knowledge and capacity across the industry, and make it very difficult to deliver safe and reliable electricity into the future or in rural and regional areas."

His grievances echoed concerns raised by ActewAGL soon after the draft revenue reduction was announced last year.

While electricity customers would save an average of $162 a year on their power bills, the ACT's energy provider said Canberra's electricity supply would be at risk, the utility's staff numbers would be "slashed and burned" and executives pay reduced by 40 per cent.

The union's submission said staff and funding cuts, coupled with ageing electrical infrastructure in NSW and the ACT, would increase the risk of a major disruption to the electrical supply in NSW and the ACT, the submission said. 

"The NSW and ACT systems have operated for many decades without widespread interruption, but there have been a number of near misses.

"This good performance has been due to the proper provision of human and financial resources and a high level of skill and commitment of staff in utilities to the goal of providing an essential public service.

"It is critical that expertise and skills are not jeopardised due to downsizing and short-term financial restrictions, because once lost, such skills and expertise will never be regained."

The union expected 4000 jobs would go under the proposal, a move which the union said would have a devastating impact on each of the businesses' ability to provide safe, reliable and affordable power.

"If enacted these cuts would heighten risk, danger and the potential for catastrophic failure – in an industry that is at extreme risk of being depleted of professional capacity," the submission said.

"The cuts would also likely mean TransGrid would need to abandon 85 per cent of its bushfire mitigation program.

"Cutting bushfire mitigation work is absolute madness, when you consider the Royal Commission into Black Saturday linked the deaths of 173 people and the $4.4 billion cost of the disaster, directly to Victoria's ageing electricity assets."

The union, which represents thousands of engineers who build and maintain electricity assets, also called for the regulator to meet with professional engineers and to carry out a risk analysis over the proposal.