POWER companies have been caught trying to grab an extra $500 million from Victorians to pay for the smart meter roll-out.
The Australian Energy Regulator has moved to block a bid by CitiPower, Jemena, Powercor, SP AusNet and United Energy Distribution to charge $1.24 billion to build and run the smart meter system from 2012-15.
The regulator said the cost should be $760 million.
The decision has been hailed a major win for Victorians struggling with soaring electricity costs.
Under the regulator’s draft decision, households would save up to $60 a year during the smart meter roll-out, depending on provider.
St Vincent de Paul spokesman Gavin Dufty said the draft findings were brilliant for customers, provided power companies were not able to overturn them before the report was finished in October.
“It’s good that the AER has knee-capped the distributors,” he said.
“This means that the projected $100 increase on electricity bills next year will be halved. Hopefully the framework is strong enough so the distributors can’t appeal and win before the decision is finalised.”
The Herald Sun revealed in April the total cost of the bungled smart meter program had soared to $2.32 billion, adding $100 a year to power bills.
Power companies had wanted to increase charges by 61.7 per cent between 2011-15 but, if yesterday’s AER draft ruling is confirmed, the rise would be cut to 20.3 per cent.
The future of the smart meter program is still uncertain as the State Government reviews the roll-out to determine if, and under what circumstances, it should continue.
Energy Minister Michael O’Brien said he would ask the regulator to support “fair charges and an affordable and secure electricity supply”.
Energy Networks Association spokesman Hugo Armstrong said companies would not comment before reading the AER draft.
The regulator signalled that power companies had failed to justify the expenditure they claimed was needed for the second phase of the roll-out.
Consumer Action Law Centre energy spokeswoman Janine Rayner said the regulator had served customers well by restricting the power company increases.
“We still have concerns with the fact consumers are still paying for these smart meters and paying these costs before the benefits are being realised,” she said.
“It is a draft decision so the businesses will still have an opportunity to provide extra substantiation.
“We will be asking the AER to continue to provide the same level of scrutiny to ensure the businesses are demonstrating the need for these costs.”