Ergon poles a ‘safety risk’

STATE-OWNED power corporation Ergon wants to spend more than $250 million a year replacing assets such as power poles and lines in regional Queensland it says are a risk to community safety.

But the nation’s regulator has questioned the spending, saying there is a material difference between what Ergon proposes and what it considers efficient spending.

Ergon has disclosed the spending in a revenue proposal to the Australian Energy Regulator, initially with a $1.09 billion replacement program over five years to 2025 and then with a revised proposal increasing it to $1.28 billion.

In a draft decision, AER wants to limit the replacement program to $834 million and has cut a further $300 million from Ergon’s planned capital spending on augmentation, ICT, property, fleet and overheads.

“We are particularly concerned with the AER’S Draft Decision reductions to Ergon Energy’s repex (replacement expenditure) program,” Ergon says in its revised proposal. “We have also received new information since lodging our Regulatory Proposals in January 2019 that indicates a higher repex is required for Ergon Energy.” The additional spending relates to increased defects in Clearance to Ground and Clearance to Structure compliance — relating to the safe distance between powerlines and the ground or structures — and pole failure rates for 2018-19 that have exceeded Code of Practice targets.

“Increases in pole replacements are essential to address pole failure rates and (are) fundamental to mitigating community safety risks,” the revised proposal says.

Asked why the extra money was needed for pole failure, a spokeswoman said more sophisticated aerial survey technology had given Ergon a clearer picture of the number of defects on the network.

The Electrical Safety Office and Electrical Trades Union support the spending but the Chamber of Commerce and Industry Queensland says the costs should not be passed on to consumers.