NSW drops NBN access bombshell

The NSW state government , currently under fire over spiralling electricity costs, has broken off negotiations with NBN Co over access to power poles amid claim and counter-claim over price.

The state’s treasurer, Andrew Stoner, went public on Monday, October 29, with the claim that NBN Co’s offer was $AU400 million less than the state government was seeking.

In a somewhat novel argument, Stoner said because NBN Co would be paying NSW less than the state wanted for access, consumers’ power bills would rise. This is, presumably, separate from the subsidies already paid via power bills to “gold-plate” the network infrastructure.

Most of the NBN fibre network will be underground, courtesy of the multi-billion-dollar deal between NBN Co, Telstra and the federal government. However, where underground ducts aren’t available – in some cases because they’ve only been installed on one side of a street, in other cases because there’s no suitable underground route – the network will use electricity poles. NBN Co has forecast that this could be as much as 25 percent of the network.

The row has become a battle between the Labor federal government and the Liberal state government, with federal communications minister Stephen Conroy claiming that NSW was seeking access payments “six times” as much as other states and territories that have already negotiated agreements with NBN Co.

"If NBN Co were to accept what was on the table, it would cost Australian taxpayers an additional $175 million over the life of the NBN, almost six times what utilities in other states and territories are charging”, he stated.

Mike Quigley, CEO of NBN Co, said: “Putting fibre cables on power poles in NSW brings in more money for the state, not less.

“Where we have an issue is that whereas we’ve negotiated fair and reasonable terms with other utilities in other states, the NSW Government wants to charge us far in excess of anybody else.”

Both NBN Co and senator Conroy have pointed out that the Telecommunications Act could be invoked to keep the network rolling out in NSW.

While the state government continues pointing the finger at the NBN, state-owned electricity network owner Ausgrid has been singled out by the Australian Energy Market Operator for over-spending on its network. The AEMO has said that its billion-dollar over-investment between 2005 and 2009 is already costing consumers around $AU50 a year each.

The AEMO report, prepared by infrastructure consultants Parsons Brinckerhoff, said Ausgrid’s capex was $AU925 million beyond regulatory benchmarks. ®