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Bassendean Briefings #58
"The facts on undergrounding power"
 
Underground
POWER
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Improved home values
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Better natural environment












#58   The Bassendean Council circulated the following information in Sept - Oct 2007
in Bassendean Briefings #58. It has some questionable statements.



"Currently the cost per average property to
underground power is $10,000".

"The State Government will pay 50% of the installation
leaving property owners to pay the remaining $5000."


However, in the Joondalup Times, Sept 13 2007, this price
has jumped to $12,700 an increase of 27%. The share  to be
paid by lot owners is now $6,350. See article below.

Joondalup Times


The private corporation Electricity Networks Corporation P/L
(trading as Western Power) pays for 25% and the State Government's
Office of Energy contributes 25%. The State Government DOES NOT
pay 50%.

Another difficulty is that Western Power does the costings and works
out "who pays what amounts".

It raises the question, with the price jump since privatisation of Western Power in April 2006, does Western Power include a profit margin in the costings for the work to underground the electricity supply, and if yes,
does that profit margin actually pay for "Western Power's 25%", effectively giving them an average asset per consumer of $12,700 on today's figures
for no capital expenditure?

And going further, if Western Power was sold (like Alinta Gas), then the
WA State Government might get a capital gain of $12,700, just for
spending 25%, or $3,175. With time, this asset could also increase,
currently around 25-30% per year!


"The community must be consulted and surveyed prior to implementation". "If the community does not see it as a priority
Council will not proceed". "Funding options will be prepared and advertised in the lead up to the 2009 application".


In principle, I have no problem with the above, except the community should be informed about the cost blow outs happening as we read this material TODAY ... not wait until 2009, when the situation could be greatly more than the estimated 50% share of $10,000 that I have estimated before.

Indeed, in 2009/2010, it could be around $12,000 per lot holder.
See revised graph below with the additional correction that includes
the current Joondalup lot owner estimates.