How Victorian power companies could be forced to pay you for blackouts

Energy distributors could be forced to compensate customers who lose power, after a report into recent storms that cut off more than half a million homes warned that companies need to be pushed into better maintenance and repair of the network.

The Victorian government released on Thursday its interim report into the February 13 storms that knocked out transmission towers near Geelong and power lines across the state, cutting electricity to 530,000 homes.

Transmission towers came down in Victoria’s You Yangs following strong winds in February.Credit: Jason South

The report found about 90 per cent of those households had power restored within 72 hours, but areas such as Mirboo North, Cockatoo, Gembrook and Monbulk experienced prolonged outages and distributor AusNet took too long to restore its entire network.

While the report did not make any findings about whether towers and lines were properly maintained before they were damaged, it warned that severe weather was becoming more frequent and extreme, and would be the new normal.

This meant there was a need to reform the current rules so electricity distributors were held more accountable for maintenance, repair and emergency responses.

To support this, the report recommended these companies pay all compensation to customers. State and federal governments currently fund prolonged power outage payments for those without power for seven or more days.

“Accountability for the distribution businesses to build, maintain, mitigate, prepare their networks, and respond quickly and effectively during these events is important,” the report said.

“The Victorian government provides financial support at significant cost to taxpayers during each event, when the impact of these events could be reduced.

“This was less problematic when these events occurred once every 10 or 20 years, but they are now happening much more frequently.”

The government review also found there was no incentive for distributors to invest in poorly performing parts of the network.

“The increasing severity and frequency of severe storm events of recent years is not something the ‘steady state’ regulatory framework that provides incremental and progressive efficiencies and improvement was designed to address. Faster and more targeted change is required,” it said.

Electricity distributor AusNet’s communications to customers were found to be “overly optimistic”, offering “authoritative customer restoration times at a time when the extent of network damage and repair was not known”.

“The information provided to customers changed multiple times as new information became available, undermining customer and the community’s confidence and ability to make good decisions about how best to manage their circumstances,” the report said.

AusNet executive general manager of network operations Andrew Linnie said it had already introduced changes to benefit communities that would be affected by future weather changes and was committed to further improvements.

“In the longer term, we’ll work with local governments and the community to help them become more energy resilient, so they are better prepared to withstand future weather events,” he said.

AusNet has bought four mobile assistance vehicles to provide charging facilities and internet to areas that lose power. Another independent review commissioned by the company into its response, undertaken by the consultancy firm NOUS Group, has also been completed.

“We are also continuing to consult with customers and other stakeholders on our longer-term plans to strike a balance between reducing the impact of extreme events and energy costs,” Linnie said.

By the end of March, the Energy and Water Ombudsman of Victoria had received at least 253 complaints related to the storms – a 445 per cent increase in unplanned-outage complaints compared with the same period last year.

The main reasons for complaints were issues with accessing compensation and communication during the storms.

“It’s clear that improvements must be made in the way privately owned power companies respond to extreme weather events and how they communicate with the residents and businesses who rely on them,” Energy Minster Lily D’Ambrosio said.

Network Outage Review chair Rosemary Sinclair said it had heard from the communities hit worst during the February storms as part of the process. “There are lessons for all distribution businesses from these experiences to improve outcomes for Victorians in the future,” she said.

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