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Failed power scheme could cost consumers


Households could end up footing the bill after one of Victoria's biggest power companies lost hundreds of thousands of dollars on a failed metering system.

The Age has learnt that in 1997 Powercor, which supplies electricity to much of Victoria, spent thousands of dollars designing and installing a new hot water metering system in 80,000 homes.

Powercor confirmed that the devices, designed to heat water off-peak, were plagued with problems and were removed just months after the installation program was completed.

A spokesman said they were installed in 1997 and early 1998, and soon after customers notified the company of problems. He said it was decided it was more cost effective to scrap the devices rather than try to rectify the problems, and they were removed during 1998.

An electricity consumer group, Energy Action Group, has raised concerns that customers may eventually pay for the failed venture, and says the episode highlights flaws in the regulatory system.

Energy Action president Andrea Sharam said that under current regulations companies could argue for electricity price rises on the basis of capital expenditure, but Powercor should not be able to win an increase because it lost money on a failed system.

A Powercor spokesman said its customers would not foot the bill.

-- Martin Thompson (, April 17, 2000

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