The Victorian Opposition is claiming that the Brumby Government’s decision to shelve its smart meter initiative will add as much as $8 million to the cost of the program.
Claiming information revealed under a Freedom of Information application, the Opposition cited advice from Jemena managing director, Paul Adams, to the Minister for Energy and Resources and the Arts, Peter Batchelor, that “the increased costs associated with the four week delay to the program are estimated to be $2 million at this preliminary stage.”
The Opposition also noted that “additional costs and risks are still under evaluation” by Jemena, and could exceed this figure.
The Opposition also cited advice from United Energy Distribution chief executive officer (CEO), Hugh Gleeson, that the impact on its program could be greater than some other distributors due to the timing of the decision at a critical stage of its testing.
“The costs associated with this change are estimated to be in the order of $3 million at this stage to cover the costs of re-work, re-testing, re-scheduling and increased installation costs,” Gleeson is quoted as advising. “We have also identified some further potential flow-on effects that could double the estimate.”
In a media statement, Shadow Minister for Energy and Resources, Michael O’Brien, claimed Batchelor was willing to add millions of dollars to the cost of smart meters project to avoid the having a time-of-use (TOU) model of electricity pricing coming into effect before the forthcoming state election.
“Labor has had years to get this project right but on the eve of the introduction of TOU pricing, announced a short-term moratorium hoping to cover up its incompetence until after the November election,” O’Brein said.
“The Minister was told this delay would add millions to a project cost that started at $800 million and is now as high as $2.25 billion, yet still went ahead because he needed to cover up his own incompetence.”
The comments follow the news in March that Victoria’s roll out of smart meters had been put on hold following lobbying from advocacy groups over concerns that the scheme’s TOU pricing model could adversely affect consumers.
As reported by Computerworld Australia, the moratorium was put in place following a meeting between Batchelor and representatives from the Utilities Advocacy Centre (CUAC), Victorian Council of Social Service (VCOSS) and St Vincent de Paul.
At the time, St Vincent De Paul National Council CEO, Dr John Falzon, said the organisation had called for a halt to the roll out as it believed the use of time-of-use pricing could hurt aged pensioners, the unemployed and sole parents.
“The time-of-use pricing rang alarm bells for us as disadvantaged households – people who are stuck at home during the day - will be disproportionately negatively impacted by time-of-use pricing. They will be unable to alter their energy consumption patterns,” he said.
In February, Batchelor claimed Victoria had significant momentum in its rollout of smart meters, and was the only Australian state to have started deploying advanced metering technology to every household.
The ministerial and electoral offices of Peter Batchelor were approached for this story, but were unable to provide comment.