December 15, 2015
The merger of Ergon Energy and Energex has been welcomed by unions after a pledge by the State Government that despite a predicted 360 job losses there will be no forced redundancies.
Treasurer Curtis Pitt announced on Tuesday that the two government-owned corporations would be merged into a new single business.
He said the merger would remove duplication in administration, shared services, boards, management and corporate costs and drive new jobs in north Queensland.
Mr Pitt also promised the creation of a “new and innovative energy services subsidiary” – yet to be named – which would combine Ergon Retail and other elements from Ergon and Energex to be based in Townsville.
“The new energy services business will look at options to utilise renewable technologies in regional Queensland, particularly in remote areas, to improve reliability and sustainability of electricity supply,” Mr Pitt said.
“This business will … create up to 500 jobs over the next decade.”
Mr Pitt said the Ergon-Energex merger would improve network efficiency and “ultimately deliver power bill savings for customers over the longer term”.
“Along with a number of other efficiency measures across Queensland’s electricity network and generation businesses, this merger will save around $680 million over the 2019-20 period,” he said.
“A new company is expected to be in place by mid-2016, with the Energex and Ergon Energy brands remaining for the time being, and frontline staff continuing to deliver network services in their respective regions.”
Powerlink – which had been tipped to be included in rationalisation plans – has not been included in the merger.
And power generators Stanwell and CS Energy will also remain separate businesses, after the Australian Competition and Consumer Commission expressed concerns that a possible merger could reduce competition in the electricity market.
“This is consistent with our commitment at the election to consult with the ACCC, but we will undertake a structural review to achieve operational efficiencies within Powerlink, CS Energy and Stanwell ensuring they are well positioned to respond to the needs of the energy market of the future,” Mr Pitt said.
“There will be no forced redundancies, however all four businesses are expected to reduce their staff levels by a combined 366 people between now and 2020 as a result of the merger.
“Frontline staff will continue to deliver network services in their respective regions.
“The merger will mean that the new network business can better leverage scale to invest in new technologies such as battery storage, better manage increasing levels of solar generation and provide regional Queenslanders with greater access to innovative products and services such as smart meters.”
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The Electrical Trades Union welcomed Tuesday’s announcement.
ETU Electricity Supply Organiser Stuart Traill applauded the State Government for honouring its pre-election “no forced redundancies” commitment and said the union was “looking forward to working with the Palaszczuk Government in the implementation of the merger”.
“By committing to no forced redundancies, our members working in Energex and Ergon, and their families, can take confidence going into the Christmas and New Year shutdown that their jobs are safe, and that there is a bright future for their industry from 2016 and beyond,” Mr Traill said.
“The $680 million in savings generated by the merger is practicable and achievable. It also shows the current State Government is focused on service delivery for Queensland energy workers and customers and clearly demonstrates the long-term advantages that can be gained by continued public ownership of our energy assets.
“This approach couldn’t be further away from the short-sighted LNP mantra of flogging off every State-owned asset, with no thought of the future.”
The Union also stated its support for the proposed establishment of a new “Energy Services Division” that would focus on renewable and emerging technologies.
“The New Energy Services division is exciting and shows good vision for the future of electricity supply in this state. By basing the new division in Townsville, it will be a great driver of local jobs in the region,” he said.
The Services Union also welcomed the statement and congratulated the State Government on the decision to form a new Energy Services business in Townsville.
The Services Union secretary Neil Henderson said this would be a significant contribution to the development of regional employment.
“Our union has worked extensively with the government and other energy industry unions in regard to the merger to ensure the job security of our members,” Mr Henderson said.
“This has been reflected in the announcement today.
“Whilst there may be some structural changes and government are anticipating a loss of 366 jobs by 2020, existing employees have the benefit of no forced redundancies as a result of the successful Enterprise Bargaining campaigning earlier this year.”
Mr Henderson said The Services Union would continue to work with the State Government to “ensure a smooth implementation phase of the merger and to minimise impacts on employees”.
