AER rejects significant price rises by Victorian electricity distributors. SPAUSNET is one for the electricity distributors.

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AER rejects significant price rises by Victorian electricity distributors. SPAUSNET is one for the electricity distributors.

For more detail, click here

SP AusNet said on Friday that it has filed its defence with the Supreme Court of Victoria concerning the Feb 7, 2009, Black Saturday bushfire known as the Kilmore East fire.

SP AusNet denies it was negligent and claims that its conduct was at all times reasonable as well as in compliance with technical regulations.

The company is facing a class action with more than 600 claimants against it. The action claims that proper maintenance and correctly identifying a damaged power line could have avoided the Kilmore East fire.

SP AusNet has also made counterclaims against several parties: the Department of Sustainability and Environment, the State of Victoria (Victoria Police), the Country Fire Authority and a contracted inspector of electricity assets.

The purpose of the counterclaim is to join other parties where they may be relevant to the Court's consideration of the causes and consequences of the Kilmore East fire.

If SP AusNet's defence of the claim is successful, the counterclaim will become irrelevant and will not be pursued.

SP AusNet aims to grow asset base

SP AUSNET will continue to focus on growing its regulated asset base, with the aim of being a stable and secure investment for security-holders.

Chairman of the electricity network operator in Australia, Ng Kee Choe, said at the company’s annual general meeting (AGM) yesterday that the group will aim to meet increasing customer demand and connections, as well as focus on expanding and commercialising its asset services business.

Mr Ng highlighted some emerging developments that are likely to have a positive effect on financial outcomes this year.

On June 4, 2010, new Australian tax legislation came into effect. This new tax law confirms the availability of additional tax deductions or carry forward losses available to SP AusNet, which enables the company to book a benefit of around A$10 million (S$12 million) this financial year.

In addition, SP AusNet has been able to utilise the Federal Government’s investment allowance incentive. The company expects that this will also yield a tax benefit this financial year.

SP AusNet is also starting to see the benefits of its enhanced reliability programme, with incentive payments being received under the AER’s S-Factor incentive scheme. These payments are received two years after the network’s reliability performance is assessed.

Apart from highlighting the positive financial effects, Mr Ng also highlighted certain events that caused uncertainty.

SP AusNet is involved in court proceedings in respect to two of the fires that occurred on Feb 7 last year in Beechworth and Kilmore East.

More than 600 victims of the firestorm sued SP Ausnet in Victoria’s Supreme Court, alleging that the fire was caused by the company’s failure to maintain its 43-year-old power line and install a safety device, known as a vibration dampener.

Mr Ng said the company continued to extend its full support and help to the 2009 Victorian Bushfires Royal Commission.

‘Many SP AusNet employees were involved in providing evidence to the commission. The commission is due to release its final recommendations at the end of this month,’ he said.

As the matters were before the courts, it was not appropriate to comment on them, Mr Ng said.

SP AusNet is 51 per cent owned by Singapore Power.

MELBOURNE – Victims of Australia's deadly 2009 firestorm have launched legal action against a Singapore power firm alleging poorly-maintained electrical wires sparked the blaze, reports said on Saturday.

Lawyers representing almost 600 people lodged a class action in Victoria's Supreme Court against Singapore Power for allegedly failing to maintain an ageing line, which fell and started the Feb 7 fire at Kilmore East.

It was the deadliest blaze of 'Black Saturday', Australia's worst natural disaster, claiming 119 of the 173 lives lost. Legal firm Maurice Blackburn said the suit could be worth hundreds of millions of dollars.

'We have heard strong evidence at the Royal Commission (into the fires) that Singapore Power could have taken a number of steps to prevent the devastating Kilmore East-Kinglake bushfire,' firm chairman Bernard Murphy told The Age newspaper.

'Electricity distribution companies are commercial enterprises that have a responsibility to ensure that public safety is not compromised simply in order to keep costs down. Singapore Power's failures have had very tragic consequences.'

The action currently has 598 plaintiffs but could grow to as many as 1,300, including people who lost family members in the fire, suffered physical injuries and lost property, or had ongoing psychological damage, The Age said.

It will allege Singapore Power failed to fit a A$10 (US$8.70) anti-vibration device to guard against metal fatigue and that the circuit-breaker system was not adequate for a dry, windy, fire-prone area.

The 1.1-kilometre single-strand line, one of the longest in Victoria, was only checked every five years and rust and wire deterioration could not be detected by ground crews, the case will also claim.

Unusually for an Australian civil case, Maurice Blackburn has asked that it be decided by a jury instead of a judge.

The Black Saturday fires rushed into small communities with little warning, killing 173 residents as they sheltered in their homes, or fled in cars. Entire towns were razed, reducing more than 2,000 homes to ash. — AFP