South Australian electricity distributor ETSA Utilities has said it will not pay compensation to businesses that lost trade as a result of it cutting their supply on January 1.
ETSA Utilities cut off power to nearly 3500 homes and businesses from Victor Harbor to Hindmarsh Island, along the south coast of South Australia, at 10:30am. This left businesses without power for up to six hours.
ETSA said this was necessarily in order to limit the fire risk.
The region relies on seasonal tourism at this time of year, and many businesses claimed they were not given sufficient notice.
Port Elliot grocer Suzie Vincent told ABC News the timing of the supply cut was particularly bad.
“I think someone has to be made accountable because we wait all year for this. This is the busiest week of our year,” she said.
Goolwa bakery owner Rosie Hage told the broadcaster her shop lost 80% of its usual takings.
“I understand that it’s a hot wind day but I really think we need a little bit of forethought put into it,” she said.
But ETSA spokesman Paul Roberts told SmartCompany this morning the company is not liable for any lost businesses as a result of the outage, as laws introduced after the 1982 Ash Wednesday fires allow the company to cut off supply when it fears a fire risk.
The Electricity Act of South Australia specifically says it would incur no liability for doing so.
Roberts said this clause was necessarily in order to ensure that safety is the only consideration when such decisions are made.
“Without that, it would be a complicating factor in our decision,” he said.
“But can I add we don’t take this responsibility lightly. We recognize the importance of these decisions, but the safety of people and property comes first.”
Roberts disputes that insufficient warning was given, saying at 8am on the morning of the blackout ETSA told the media it was monitoring three areas in South Australia for fire danger and Roberts himself did an interview with ABC radio at 8:30am.
“By 10am the [Country Fire Service] said there were catastrophic conditions on Hindmarsh Island, including winds up to 80 kilometres per hour,” said Roberts.
“Subsequently the decision was made.”
High winds had by this stage brought down four trees in the area, led to ETSA fearing power lines could blow over and spark bushfires.
Business SA chief executive officer Peter Vaughan said in a statement that the lobby group had not yet received any communication regarding the impact of the power outages on businesses.
However, he stressed that while such events were not common, early communication was vital.
“It is important that an effective early warning system is implemented so that businesses are able to put in place the appropriate measures and be prepared for any cuts to power supply,” he said.
The row has prompted the Victorian government to promise residents they will get plenty of warning if any such outages are required in Victoria.
Acting Premier Peter Ryan told The Australian yesterday that “we have means in place whereby that can be done should the need arise, but at the present time we don’t have that need upon us”.
“If it does develop . . . we will deal with it as and when we need to, but there will be plenty of warning given to people should it eventuate.”
ETSA says people need to have contingency plans in place for power outages
“People can’t assume they will always have electricity supply,” said Roberts.
“You can have a fault on the line, a bushfire, or we can turn off the power. People should make assessments of their reliance on supply.
“For example nursing homes and hospitals have backup generators in place for when they might lose power. It’s really a risk-management contingency.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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