SA Government hit with $45 million power price hike in 2018 thanks to ‘incompetent’ Labor deal

Electricity costs across government are expected to jump by $45 million to $106 million this year – a staggering 73 per cent hike – thanks to a ‘rushed and incompetent’ deal struck by the former Labor government.

 

Treasurer Rob Lucas said in the latter half of 2017, Labor hurried into arrangements for the supply of electricity to government sites, to replace the existing whole-of-government contract which expired in December 2017.

“Astonishingly, Labor left the procurement process for such a critical contract until six months before it was due to expire – leaving them with little time and no bargaining power to negotiate the best possible deal for taxpayers,’’ said Treasurer Lucas.

“As a result, initial analysis suggests electricity costs across government could jump by as much as $45 million to $106 million in 2018, a staggering 73 percent rise.

“While the costs are expected to reduce to $90 million in 2019, and $78 million in 2020, these still represent increases of 47 percent and 27 percent, respectively.”

As a result of its Generation Project Agreement with Solar Reserve and its Aurora solar thermal generation project near Port Augusta from 2020, bridging contracts were required and one-year contracts entered into with incumbent suppliers Origin Energy and Simply Energy for small metered and unmetered lighting sites, respectively.

An Energy Retail Services and Supply agreement was struck with Zen Energy for electricity supply and retail services across government from January 1, 2019 to October 31, 2020.

“Despite attempts by the Marshall Government to access an independent report, upon which the former government used to determine the cost basis and merits of the individual deals, we have been prevented from seeing them because the advice went to Cabinet,” said Mr Lucas.

“At an individual department level, some of the price hikes are beyond comprehension.

“The Department for Child Protection will see an increase of nearly 150 percent in its 2018 power bill, while the Country Fire Service’s electricity costs will jump 500 percent in 2019.

“Ultimately, it’s the long-suffering taxpayer who will be forced to wear the burden of these increased costs, which is just another example of Labor’s gross incompetence and financial mismanagement.”


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