South Australia’s blackout payments slashed, faulty light incentives remain

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Posted

January 07, 2019 14:50:46

South Australian households will lose $100 “inconvenience” payments for extended blackouts, but financial incentives for people who call in faulty street lights will still be on offer.

Key points:

  • Inconvenience payments for blackouts have been reduced
  • Payments will only go to people who have more than 20 hours of blackouts per year
  • The South Australian Council of Social Services (SACOSS) has welcomed the changes

The Essential Services Commission of South Australia (ESCOSA) has decided households which experience blackouts of more than 12 hours will no longer receive automatic inconvenience payments, which start at $100 and increase for longer outages.

Instead, the Guaranteed Service Level (GSL) payments will be given to customers who experience more than 20 hours in blackouts throughout a year.

ESCOSA chief executive Adam Wilson said the regulator consulted widely on the payments.

“Customers told us that while they broadly like the scheme, they wanted it far better targeted to address those who experience persistent poor reliability, as opposed to the one-off,” Mr Wilson said.

“Really importantly, given that we all pay the cost of the scheme, they said they didn’t want to pay so much.

“We looked to address those two concerns through the reframing of the scheme.”

He said the changes would encourage network improvements by the distributor, SA Power Networks, in areas with the most reliability issues.

The commission estimates the changes, which begin on July 1, 2020, will reduce the cost of the scheme by around 40 per cent, or about $5 million annually.

The savings are equivalent to about $5 for each customer per year.

“I guess every dollar helps in this climate, and this is what we as a commission can control,” Mr Wilson said.

“We’re doing our bit.”

SA Power Networks paid out a record high level of GSL penalties in 2016-17, after the statewide blackout in December 2016.

In that financial year GSL payments totalled $28.4 million.

The distributor will also be required to report more comprehensively on its performance, and give public explanations when it misses performance targets.

Street light entrepreneurs to continue their work

While the GSL penalties are being significantly changed, payments for broken street lights, which have spurned a side industry, remain.

The regulator had initially proposed abolishing the payments, which give $25 to the person who first reports a faulty street light for every five business days it goes unfixed.

“People came in and gave us submissions and told us they did value the scheme and told us it was important, so we’ve listened to those submissions and we’ve changed our mind,” Mr Wilson said.

One of the submissions came from a confidential author, who said they had made 14,000 reports of faulty lights in an effort to collect as many payments as possible.

The author suggested that abolishing the payments would remove the financial incentive for the public to report issues.

“Removal of the GSL payment scheme will remove all incentive for the author to make future… street light out reports,” the author submitted.

SA Power Networks had raised concerns that the scheme was encouraging vandalism of street lights in order to claim payments.

No more improvements required, regulator declares

The commission also told SA Power Networks that it was required to maintain its currently reliability standards, and not spend any more to increase reliability.

It said a customer survey showed consumers were satisfied with the reliability of the network and had “limited willingness to pay for reliability improvements”.

South Australian Council of Social Services (SACOSS) adviser Jo De Silva said the changes would help keep a lid on prices.

“The commission has listened to consumers who really don’t want to pay for overinvestment in reliability,” Ms De Silva said.

“Improvements would have come at a massive cost to consumers and SACOSS has long recognised that reduced prices remains the overwhelming priority for consumers.”

Topics:

electricity-energy-and-utilities,

industry,

adelaide-5000,

sa,

australia



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