Short circuit: The trouble with government-owned networks

As the Energy Networks Association gets another CEO, the question lingers: why are government-owned groups lobbying on policy alongside privately-owned organisations?

The Energy Networks Association is the peak body representing the owners of gas and electricity networks in Australia. It represents 26 gas and electricity network organisations – who together own $65 billion dollars’ worth of assets – on issues such as state government policy and regulatory environments under which energy networks must operate.

It’s something of an intriguing organisation in that its objectives are to represent its members on a range of issues designed to, among other things, enhance their business opportunities in the monitoring and development of policy. What’s unusual about this is that when you look at its membership, around two-thirds of its constituents are government-owned entities; actively engaged in an association that is lobbying government.

It’s also somewhat interesting to consider that with so many government entities represented, the privately-owned members could develop a relationship with the bodies that set the policy frameworks which allow them to deliver a return for their shareholders.

Currently, the chair of ENA’s board is Terry Effeney, the chief executive of the Queensland government-owned Energex. Its former CEO is Andrew Blyth who, among other things, was formerly a senior advisor to the federal energy minister.

Blyth left ENA in 2011 and was replaced by Malcolm Roberts who worked in the Queensland Department of Prime Minister and Cabinet during the 1990s, focusing on competition and industry policy. But recently, after working in government and then the ENA, Roberts left and was appointed as chairman of the Queensland Competition Authority.

So with a gap left in the ENA for the top job, it announced last week it had appointed the former director general of the Queensland Department of Premier and Cabinet, John Bradley, to fill the role.

Bradley (who was also at the helm of the Department of Environment and Resource Management) was one of the first axed by Queensland Premier Campbell Newman upon his election win in March 2012, and he reportedly walked away from government with a total remuneration package of $1.016 million for just under a year’s work.

Having a heavily government biased (and indeed membership) organisation which is so closely linked to private interests is bizarre. Having senior executives coming and going from the very departments that have hurt the solar industry in Queensland by axing all of their solar programs and coming up with the almost farcical QCA policies on solar is worrying.

The publically-owned ENA members have a vested interest in mining more coal (to deliver royalties), selling more kWh (to earn returns and feed the state budget) and building more infrastructure (to deliver the asset-based returns). And its non-government members are seemingly in a massively advantageous position as a result.

The association’s membership and entrenched vested interests leave it in a position where bias is inevitable and seemingly makes a mockery of motherhood statements about its interest in delivering electricity cost efficiencies, demand side management or energy efficiency gains. Reading through its policy submissions, one certainly doesn’t get the impression it’s batting for anything of the sort. With so much government participation in the ENA, it could make a charade of renewable action plans and the talking up of greenhouse gas reduction targets.

The states’ support for vastly expanded coal mining (and indeed substantial royalties) and the ramifications for global CO2 emissions came under focus on Monday when prominent US environmentalist and founder Bill McKibben hit the presses with some chilling statistics.

McKibben highlighted that Australian-mined coal burned overseas generates about 711 million tonnes of carbon dioxide a year, but when new mines are taken into account, that total will be up to 1431 million tonnes in 2020, and 1738 million tonnes in 2025.

''It (Australia) wants to burn five times the carbon that the most conservative governments on Earth say is safe. They're not outlaw against the laws of the state … but they're outlaws against the laws of physics. If they carry out their business plans, the planet tanks,'' he warned.

McKibben’s comments are prophetic; they are NOT outlaws of the state, they often ARE the state. 

Nigel Morris is the director of Solar Business Services.

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