Ergon bosses in firing line as limit put on revenue: union

THE Australian Energy Regulator yesterday decided to limit revenue to Ergon Energy and Energex, but unions are concerned what is a win for customers may not be good news for employees.

The determination is expected to reduce the amount consumers pay for electricity in Queensland, with bills to fall an average of $95 per household over the next regulatory period.

The move comes after Flynn MP Ken O'Dowd slammed Ergon for its power prices, which then prompted Minister for Energy Mark Bailey to clarify that revenue, which he said had stabilised rather than increased, was determined by the AER.

Yesterday Premier Annastacia Palaszczuk said the State Government would direct Energex and Ergon to not appeal the AER decision.

Electrical Trade Union state secretary Peter Simpson said the move meant the energy giant would likely have to adjust costs in other areas, like staff.

He said any cuts or forced redundancies should be coming from upper management and would be unlikely to hurt the Rockhampton Ergon Energy depot.

Ergon is one of Central Queensland's largest employers with about 1000 staff on the books.

"It is great for consumers obviously, but it is a concern for us. We have already lost 1200 jobs in the past three years... there is lots of fat at the top, not much at the bottom," Mr Simpson said.

"Workers covered by the union agreement cannot be forcibly made redundant.

"The no-forced redundancy commitment is only applicable to award/EBA staff, not the bloated senior ranks of current government-owned corporations."

While Mr Simpson said there was an opportunity for the companies to make "significant savings" in the managerial ranks, a spokesperson from Ergon Energy said it was too early to speculate on what might be done to handle costs.

"While the Australian Energy Regulator has today released its final determination in relation to Ergon Energy revenue for the period 2015-2020, it will take some time to check the determination for accuracy and impacts," the spokesman said in a statement yesterday. "In these circumstances, any comment at this point about how Ergon might achieve the cost reductions from the AER would be premature.

"It should be noted that Ergon has made significant progress in its efficiency programs which provide a strong foundation for meeting ongoing challenges and growth in emerging technologies and customer services."

FAST FACTS

The average Ergon household bill in Rockhampton for the 2014/15 financial year was $460 per quarter, compared to $373 per quarter in the 2009/10 financial year

There are currently about 800 Ergon staff employed in Rockhampton

Ergon Energy CEO Ian McLeod's base salary is $699,001



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