SP AUSNET CAN APPLY FOR PRICE INCREASES THROUGH INSURANCE SHORTFALL

Australian utility company SP AusNet can apply to pass onto customers in the form of price increases any losses it incurs from bushfires in February 2009, the Australian Energy Regulator has ruled. Law firm Maurice Blackburn is suing SP AusNet on behalf of survivors and relatives of the dead from the Kilmore East and Murrindindi bushfires in early 2009 (IIN 24, August 20 2012). The Kilmore East-Kinglake trial has begun, while the Murrindindi case is yet to reach the courts. A total of 159 people died and 1,780 homes were destroyed. The law firm is eager that SP AusNet "explore other mechanisms before even considering a price hike", adding that "we don't believe targeting customers with higher prices – including some of the victims of the fires – is a mechanism it needs to, or should, pursue". SP AusNet has said that in certain cases it could be financially more efficient to apply for cost increases after a major catastrophe than to have to impose those costs upfront to pay for insurance premiums.