Essential Energy blames regulator’s cut: Jobs “surplus unfunded”

The jobs of two electricity workers in Cowra are described as “surplus unfunded” in a press release issued this week announcing Essential Energy redundancies.
Nanjing Night Net

The jobs are among 700 job cuts announced in what is described as phase 1.

A further 695 jobs will go in phase 2.

Jobs will also be lost at Bathurst (18), Blayney (2), Canowindra (1), Forbes (3), Orange (4), and Parkes (1).

Essential Energy deputy chief executive officer Gary Humphreys said the job cuts are a consequence of the regulatory determination by the Australian Energy Regulator (AER).

“We must now commence a significant period of transformation to safely align our workforce with the AER’s cuts to our capital and operating programs for 2014-19,” Mr Humphreys said.

He said the regulator’s 30 per cent cut in operating expenditure had left Essential Energy without funding for an estimated 1,395 positions from 1 July 2015 – costing the business approximately $15 million per month.

“Following an extensive review of business operations, Essential Energy has provided details to employees and the unions around the number of proposed unfunded positions in the first phase of workforce reductions required for our business to remain sustainable,” he said.

“A period of consultation with potentially impacted employees has begun and will continue over coming weeks to explain processes and how they may affect individuals.”

The 700 positions proposed in this first phase cover all Essential Energy regions and employee categories, and include a 20 per cent reduction in senior management positions. Almost 300 of the reductions comprise employees who have elected to take a voluntary redundancy.

A second phase of reductions of a further 695 positions will be assessed once the outcome of Essential Energy’s appeal of elements of the AER’s determination is known. This is expected in late 2015.

“Our revised regulatory proposal submitted to the AER in January this year had proposed a sensible three-year transitional approach, utilising natural attrition and further productivity improvements to reduce our costs to customers. However, the AER rejected this and backdated the funding cuts to 1 July 2014, leaving 1,395 positions unfunded. Essential Energy’s network charges to customers reduced by an average of $313 per annum on 1 July 2015,” he said.

“As a consequence, we’ve got to start operating our business within the AER’s funding constraints and with fewer employees, while maintaining network safety and reliability and delivering a satisfactory level of service to our customers.

“These proposed workforce reductions are regrettable yet unavoidable. We appreciate this is a difficult time for all Essential Energy employees and are committed to treating them with the highest level of respect and support throughout this process.”

A new Essential Energy regional structure and other organisational changes – including the proposed consolidation of 10 under-utilised depots identified as surplus to business requirements – were also announced.

Mr Humphreys and his Executive team will hold briefing sessions with more than 3,200 employees across the State from next week to provide further information about the business transformation and provide an opportunity for feedback and questions.

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