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Lucas blames Labor for $45m power price hike

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A month out from the Marshall Government’s first Budget, Treasurer Rob Lucas says taxpayers are about to be hit by a $45 million spike in the price of electricity supplied to government – and he’s blaming Labor.

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Lucas released a statement this morning arguing the Weatherill Government late last year had signed a “hurried” agreement for the supply of energy to government – a deal that locked in huge electricity price rises across Government this year.

He said the former government had entered single-year bridging contracts with Origin Energy and Simply Energy as a result of its agreement to have Solar Reserve’s planned solar thermal plant at Port Augusta supply power to the government from 2020.

He argued this put the former government in a poor position to negotiate energy contracts for this year.

“Labor left the procurement process for such a critical contract until six months before it was due to expire – leaving them with little time and no bargaining power to negotiate the best possible deal for taxpayers,” he said in a statement this morning.

“As a result, initial analysis suggests electricity costs across government could jump by as much as $45 million to $106 million in 2018: a staggering 73 per cent rise.”

He added that the former government had also struck a deal with Zen Energy for electricity supply and retail services across government starting 1 January 2019 and finishing 31 October 2020.

“While the costs are expected to reduce to $90 million in 2019, and $78 million in 2020, these still represent increases of 47 per cent and 27 per cent, respectively.”

He said some departments would be hit harder than others.

“The Department for Child Protection will see an increase of nearly 150 per cent in its 2018 power bill, while the Country Fire Service’s electricity costs will jump 500 per cent in 2019,” said Lucas.

Opposition energy spokesperson Tom Koutsantonis told InDaily the deal was “the best result that we could have achieved, given the market conditions” and challenged Lucas to produce proof the former Government could have got a better price at the time.

But Lucas said the Marshall Government had not been able to access an independent report detailing how the former government made the deals.

“Despite attempts by the Marshall Government to access an independent report … which the former government used to determine the cost basis and merits of the individual deals, we have been prevented from seeing them because the advice went to Cabinet,” the Treasurer said.

Koutsantonis countered that the Marshall Government was keeping Cabinet documents concerning the Henry Keogh case secret and that it was “a bit rich” unless Lucas was prepared to make all such documents open to the public.

He argued that Lucas was raising the issue today to distract from controversy over allegations Child Protection Minister Rachel Sanderson had acted inappropriately during a visit to a child protection facility – and added that Lucas would benefit from the former government’s investments in renewable energy, which would reduce costs into the future.

He declined to comment when asked about what happened during the negotiations and whether it was true that the Government was in a poor negotiating position as a result of the Port Augusta deal.

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