Profit First Service Second

Welfare groups call for power discounts for battlers after Aurora profit announcement

BATTLERS should be given power price discounts after the State Government’s windfall $76.5 million profit from Aurora Energy, Tasmania’s peak welfare body says.

Aurora Energy yesterday announced the record profit amid continuing outcry over mounting power prices in the state.

Tasmanian consumers have endured a 100 per cent increase in electricity prices since 2001, including a 10.56 per cent increase in July last year.

Tasmanian Council of Social Service chief executive Tony Reidy said the State Government should help lower income and disadvantaged Tasmanians with its $25 million dividend from Aurora.

“The cumulative increase in electricity costs over the past decade has placed an often intolerable burden on low-income households,” he said.

Mr Reidy said assistance could include additional resources for emergency relief, provision of additional affordable housing and support for better thermal efficiency of low-income households.

“This would show an increased commitment by the Government to alleviating the impact of electricity costs on the health and wellbeing of vulnerable Tasmanians.”

For its part, Aurora attributed the increased profit largely to a reduction in costs and strong management.

Chief executive Peter Davis said: “Profit before tax for the year increased significantly to $84.5 million and reflects the benefit of prior years’ efficiency and restructuring and increased tariffs partially offset by electricity reform costs.”

The company had 994 staff at the end of 2010, but has slightly more than 1000 now.

Energy Minister Bryan Green said the Government did not have plans to give power discounts from Aurora’s profit, saying the dividends would pay for schools, hospitals and police.

“The Tasmanian Government already has one of the most generous concession schemes and hardship provisions in Australia – worth $38 million last year.”

Aurora’s revenue rose 4.3 per cent to $1.56 billion and energy and transmission cost 5.4 per cent more at $1.063 billion.

Energy from Hydro Tasmania cost $52 million more and distribution from Transend $2 million more.

Electricity prices are set by the Tasmanian Economic Regulator, which has approved a price reduction of 5.23 per cent for next year, saving the average household about $140.

ACIL Allen consulting director Stephen Weston saw nothing too problematic about Aurora’s level of profit.

“Aurora is overseen by an independent regulator and its revenue determinations are in the public domain,” he said.

Mr Reidy said that it was important to remember that a price increase of nearly 11 per cent had prevailed during the period of Aurora’s profit, which was unsustainable for ordinary Tasmanians. He said the recent moves to minimise price increases were welcome but had come after a sustained period of annual increases.

Aurora chairman Geoff Willis said the $76.5 million profit before tax was $20.1 million higher than the previous year.

Total returns to the Government including dividend and taxation equivalent would be $38 million, up 36 per cent.

Liberal energy spokesman Matthew Groom said: “Given that power prices have gone up 65 per cent over the past seven years, it would be a worry if Aurora wasn’t making a profit.

“The Government has had over a decade to put downward pressure on power prices but they had to be dragged kicking and screaming towards reform.”

Sourced from The Mercury

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