Australian Power Company Caught Overcharging Customers to Make Up for Lost Revenue Due to Solar
CAPITALISM, 29 Sep 2014
Kelmeny Fraser & Sarah Vogler - The Courier-Mail
Energex is set to claw almost $470 million from consumers for electricity they never used.
Energex documents reveal that the company last year planned to “recover” $469.8 million in “under-recovered revenue” over the next two years, with the amount to be tagged on to future prices.
The figure reflects the shortfall in actual revenue compared with what the Australian Energy Regulator allows the energy distributor to recover, with a new revenue cap set every five years.
It means householders pay for power they do not actually use, with the energy distributors able to reap revenue based on forecast demand rather than actual demand.
An Energex spokesman said yesterday that $274 million under-recovered as at the end of fiscal 2013 was due to reduced customer-driven works and lower than forecast energy consumption.
But he said another $240 million was due to solar PV costs and $43 million due to network performance exceeding targets.
The Courier-Mail yesterday revealed Energex managers are facing a looming revenue crisis amid tumbling demand, forcing it to continue to raise prices the more demand falls.
It has sparked calls for a parliamentary inquiry.
Solar energy growth has been a key factor, with a May 2013 Energex presentation showing solar energy production growth rose by eight times that of 2009.
Demand for energy was flat over the same period.
The newspaper also revealed allegations by Energex whistleblower Cally Wilson that Energex had examined ways to artificially increase revenues – and power prices.
Ms Wilson, a treasury analyst with seven years’ experience, said she was forced to manipulate data to reach targeted weighted average cost of capital (WACC) – a key factor in setting revenues and therefore household electricity bills.
She said she found the debt rate on Bloomberg mid-last year when Energex was crunching the numbers ahead of its revenue proposal next month to the Australian Energy Regulator.
Premier Campbell Newman yesterday committed to meet Ms Wilson to hear her claims. He said getting power prices under control was the “next big project on his to-do list”.
Energex yesterday insisted the 2013 WACC calculations were not for the AER proposal.
“Modelling and forecasting is a routine part of business planning,” acting CEO Peter Price said.
Energex also told media yesterday that there were two separate teams working on the WACC, one finding a low rate the other a high rate.
Queensland Competition Authority head Malcolm Roberts told ABC Radio yesterday that it was “natural for them (energy companies) to be seeking an allowance that’s on the high side but equally the regulator has the authority to decide what that rate is going to be.”
But he said the AER ultimately set the WACC and “simply doesn’t rubber stamp these proposals.”
AER acting chairman Andrew Reeves said the proposed Energex WACC “wouldn’t bear on our decision”.
PRICE: Whistleblower claims Energex execs manipulated data
Go to Original – couriermail.com.au
DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.