Lawyers for NSW state-owned power networks say they could be forced to cut corners if a recent ruling from the Australian Energy Regulator (AER), which was expected to slash household bills by hundreds of dollars, is allowed to stand.
The regulator is fighting legal challenges on two fronts, with their April determination facing possible appeals brought by the power companies themselves as well as a consumer rights body, the Public Interest Advocacy Centre (PIAC).
The Federal Court, sitting as the Australian Competition Tribunal, is deciding whether to allow the appeals to proceed.
On Wednesday the court heard submissions from Networks NSW - comprising the state-owned Ausgrid, Endeavour Energy and Essential Energy - which says it is facing a $700 million operating expenditure shortfall if the AER determination stands, and that this could mean "outages, pole failures, people being injured, bushfires starting - safety issues which are not trivial".
The court heard that spending restrictions could also force the networks to put off up-keep that is crucial in the long-term: "Where they can cut back on the maintenance, they will do so."
The AER is contesting every ground of the appeal, the court heard.
NSW Opposition Leader Luke Foley has attacked the appeal bid, saying Networks NSW and the Baird government are crying "crocodile tears" when they cite concerns about bushfire mitigation and job losses.
He says the court action is really aimed at assisting the NSW government in securing higher tenders when it puts three state-owned power corporations up for 99-year private leases, beginning with Transgrid.
Essential Energy has been spared from the government's partial privatisation plan but is still a party to the prospective AER appeal.
"A government that came to office preaching against gold-plating in our electricity businesses is now crying crocodile tears over bushfire management and arguing for the costs, when it comes to managing vegetation, to be double what's spent by the electricity businesses in Victoria," Mr Foley said.
Meanwhile, in what has been described as an Australian first, the PIAC is expected to argue on behalf of NSW householders that the AER's decision does not go far enough in addressing expensive inefficiencies in power supply.
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