NSW electricity costs to surge with energy sharing deal
NSW consumers could be overcharged hundreds of millions of dollars for a power line that brings wind-generated energy from South Australia and, in return, sends them our coal-fired electricity.
Under the proposal being studied by the regulator, NSW's 3.2 million households would pay nearly three-quarters of the $1.5 billion cost of the interconnector, even though South Australians get more than double the bill savings.
The spread of costs and benefits has been described as "materially unbalanced" in a report commissioned by the nation's top energy consumer group while the Public Interest Advocacy Centre said "it's robbing Peter to pay Paul".
A major power company has also warned the plan could drive up the price of wholesale electricity in NSW.
The 900km interconnector from Robertstown in SA to Wagga has been proposed by South Australia's transmission network owner ElectraNet and is backed by NSW's TransGrid.
The main saving identified by ElectraNet comes from South Australia being able to use coal-fired power from NSW instead of more expensive SA-based gas-fired electricity when the state's energy needs cannot be met by wind and solar.
The aim is to build the line by 2023.
According to ElectraNet documents, SA households would be asked to pay $400 million of the project cost on the promise of a net bill saving of $66 per consumer annually.
NSW households face paying $1.1 billion in return for a net saving of just $30 per consumer. Most of the line is in NSW, which is why its consumers have to pay more, although there are official mechanisms to share the costs and benefits more evenly.
Estimates by The Daily Telegraph suggest shifting about $200 million in costs onto SA households would equalise the net benefits.
A report on the proposal by consultancy The Energy Project, using a grant from Energy Consumers Australia, found "the allocation of costs and benefits between SA and NSW consumers appeared materially unbalanced".
Report author Andrew Nance said NSW consumers would bear most of the risk, adding: "The business case for SA was really good, but the business case I thought, from the NSW consumer perspective, wasn't that strong."
ECA chief executive officer Rosemary Sinclair has told ElectraNet she considers the sharing of costs and benefits to be "uneven".
She said this view had also been expressed to the regulator.
Critics say bringing together the state's power markets would raise NSW wholesale prices.