For many South Australians first quarter electricity bills will reach new heights driven up by record levels of electricity consumption during the recent heatwave. Some households however, will have lower bills than expected, not because they are being more energy efficient, but rather because they lost power for long periods of time during the blackouts. The blackouts forced thousands of households and businesses to go without power for hours in the middle of sweltering heat. A preliminary report on the blackouts by the Essential Services Commission of SA (ESCOSA) shows that the number of customers affected far exceeded the initial estimate of 50,000. In fact around 63,000 customers representing nearly 10 percent of the SA customer base were affected. Around 1000 customers were without power for over 12 hours. Not surprisingly ETSA was flooded by calls from concerned residents seeking assistance. Over the four days of the heatwave it handled over 50,000 calls. Normally it gets around 1200 calls per day. The ESCOSA report reveals that callers experienced long delays and that the information provided by call centre staff was "not up-to-date and accurate". This is not surprising given that the back up call centre is based in Victoria and staff are not likely to have as intimate an understanding of local conditions as you might hope for. It is clear from the preliminary report by ESCOSA that there were serious shortcomings in the management of the crisis by ETSA. In particular it appears that ETSA did not have adequate risk management strategies in place to help minimise the spread of blackouts and rapidly solve them once they had ocurred.
The new ETSA Utilities Chief and former head of the body that policed electricity industry performance standards, Lew Owens was rightly apologetic but there are few signs that he is going to take the necessary action to ensure that it doesnt happen again. The privately run ETSA is responsible for ensuring reliability of the electricity delivery system, the poles, wires and transformers that transport electricity safely into our households. Periods of prolonged extreme heat place pressure on this system requiring ETSA to put in place risk management strategies that help to minimise disruptions. No system is fool proof and not every set of circumstances can be anticipated, but the recent blackouts could have been prevented and much better managed if ETSA Utilities had fulfilled its commitment to ensuring system reliability and timely management of blackouts. It should have ensured that its transformers were capable of withstanding the required loads and expanded its emergency maintenance crews to cope with summer blackouts. ETSA boss, Lew Owen's should not dismiss calls to move his Victorian based emergency call centre to Adelaide. The move is likely to improve the quality and timeliness of advice provided to customers and aid communication between ETSA and it's call centre management. ETSA must not compromise its capacity to provide the best quality advice and support to its customers.
A final report on ETSA' s performance during the January blackouts is currently being prepared by ESCOSA. It is essential that it be a more rigorous one than the preliminary report which was overly reliant on ETSA's perspectives on the event. These have not been subject to independent scrutiny and obviously need to be, before ESCOSA releases it's final report.
ESCOSA may not be the appropriate body to take sole responsibility for the preparation of the report given that it's former head is now the CEO of ETSA Utilities. This is not to suggest that ESCOSA will be anything other than fearless in the execution of its duties or that Lew Owens will seek to use his inside knowledge of the workings of ESCOSA to advantage in his new position. It would be prudent however for the Minister to appoint a two person panel of experts with no current or previous relationship with ESCOSA or ETSA to review the ESCOSA final report. This would provide the Minister with the fullest possible assessment of the causes, consequences and policy implications of the January 2006 blackouts.
Rather than introduce a range of reforms to better prevent and manage summer blackouts within its existing budget, don't be surprised if ETSA uses the January blackouts to try and get a better financial deal for itself from the national industry regulator. It is worth remembering that on the back of a 30 percent increase in electricity prices in 2003, ETSA and AGL were advocating measures that would result in further price increases in 2004. ETSA argued that this would make it possible for them to increase there capital expenditure by around $130 million. The argument was rejected by ESCOSA which determined that ETSA already had sufficient income to fund its infrastructure upgrade program. Had ETSA Utilities and AGL got their way, average annual household power bills would have risen by around $100 last year.
As we approach the State election, ETSA Utilities will come under enormous pressure to improve its performance. The State Opposition cannot escape the reality that their privatisation policies have led to less affordable and reliable electricity for many South Australians. The State Government on the other hand has made a commitment to do something about it. It has the power to levy a fine of up to $1million on ETSA Utilities if it finds that ETSA has a case to answer, which clearly it does. The electricity giant will need to be put under more pressure than this to force change. A tougher regulatory structure and stiffer penalties for poor performance are required.
See http://www.adelaidereview.com.au
