Profit ‘aspiration’ or target? WA energy minister cops grilling over future of Synergy

West Australian Energy Minister Amber-Jade Sanderson has faced a budget estimates grilling over the future of state-owned energy provider Synergy, labelling attempts to return the utility back to a profit-earning entity as an aspiration, before quickly changing the term to “target”.

Sanderson was asked by Nationals leader Shane Love what assumptions the government was working on to assume that Synergy will at any point get back to being a profit-earning entity.

“It’s an aspiration,” the minister said, before quickly changing her tune.

“Well of course it is a target, and reasonable financial management is a requirement under the GTE (Government Trading Enterprises) Act.

“There are a number of subsidies provided to Synergy that the state government will continue to provide.

“One of those is to ensure access to cheaper, cleaner and affordable energy to support the transition, but also to shield households, families from steep power bill rises, and we continue to do that as a government.”

Pressing the issue, Love offered a further question to the committee on the economic direction of the state-owned utility.

“So with Synergy facing, as I understand, a $371 million loss this year, an operating subsidy of $692 million and looks to be in the red for every single year going out in the board estimates, when do you expect that Synergy will be making a profit?” Love asked.

Sanderson said she was not going to put a hypothetical date into the ether.

“From the government’s perspective, owning the retailer and generator on the system is incredibly important to protect households and industries from power bill rises,” she said.

“The government will continue to support Synergy to play that important role in delivering the energy transition for Western Australia.”

Nationals Wheatbelt MLA Lachlan Hunter then brought up a recent billing blunder, where Synergy admitted to overcharging customers to the tune of $40 million over the past 15 years.

“You said now it’s time for Synergy to reset and win back the trust and confidence of Western Australians being its customers,” Hunter said.

“Are you confident that Synergy has done that?”

Sanderson said she was confident the company was in the early stages of delivering that confidence back to WA – but noted the billing issue went back to a time before Labor came into power.

“This is a period of time that goes beyond this government,” she said.

“It goes beyond this chief executive, it goes beyond this board chair, it goes beyond the board, and many iterations of the board, it had been occurring over many years, and it is important that it was found and certainly resolved.

“Synergy has taken significant lengths to pay back the money from overpaid accounts, and to also make good on many of those accounts, and to ensure that that remediation occurs.

Sanderson added that the total overpayments of $5 or less – around $35,000 when added together – had been donated to Vinnies WA.

“Yesterday, $12.2 million was returned to the 37,550 impacted customers,” she said.

“Another $8.6 million in government assistance credits was returned to the department of Treasury.

“Synergy has provided more than $1.2 million in goodwill payments.”

Sanderson said there had been an independent investigation into the overpayment issue, in addition to an investigation conducted by the energy provider.

“We have seen a dedicated team within Synergy, 20 [full time employees] dedicated in Synergy to remediating these payments,” she said.

“Importantly, we have seen processes in place to stop any overpayments when they are immediately identified.”