ELECTRICITY consumers and environmental groups have reacted angrily to an announcement by the NSW Energy Minister, Ian Macdonald, that power companies will be allowed big price increases to pay for the largest energy expansion program in the state's history.
The head of the Energy Users Association, Roman Domanski, said the NSW power industry was becoming more inefficient and needed reform, not excessive spending.
"You won't solve the problem by throwing money at it," he said, adding that companies had not justified the big spending programs they were asking for.
Yesterday Mr Macdonald pre-empted the announcement of the independent energy regulator by declaring $18 billion would be spent over the next five years to replace, renew or upgrade the state's electricity network.
The money will come from electricity consumers. Domestic users in Sydney are expected to have to pay extra $2.50 per week.
Environment groups and energy-efficiency experts joined a chorus of criticism over the program, which is expected to be formally approved by the Australian Energy Regulator on April 29. The groups say it will increase greenhouse gas emissions and work against energy efficiency programs.
The NSW Total Environment Centre described the price increase as a money grab by the power distribution companies, Energy Australia, Integral Energy, Country Energy and Transgrid.
"Federal Energy Minister Martin Ferguson and NSW Minister Ian Macdonald need to be called to account for the colossal waste of money," said the centre's Jane Castle. "In NSW energy efficiency and demand management have proven to be four times cheaper than building more poles and wires.".
The price increases for Energy Australia customers are expected to begin with a 16 per cent rise this year followed by an 8 per cent rise for the following four years.
A spokesman for Energy Australia, which will spend $8.5 billion on its share of the program, said the spending would renew and upgrade an electricity system built in the 1960s and 1970s.
"It's now time to start renewing and replacing that network. It's got nothing to do with wanting to expand for the sake of expansion," said a spokesman, Anthony O'Brien.
The independent regulator had been through the company's submission "with a fine tooth comb", he said, and Energy Australia needed to comply with its licence conditions to run electricity distribution safely and reliably.
The NSW Environment Minister, Carmel Tebbutt, recently introduced an energy efficiency target for power retailers to cut electricity use in NSW.
But Ms Castle said the new infrastructure spending could counter these efforts.
Part of the spending increase is to provide more power for the increased use of air-conditioning, which is boosting demand in peak periods. Energy Australia says it is using off peak pricing and other techniques to increase energy efficiency.
