The 2009 Victorian Bushfires Royal Commission (VBRC) was established on 16 February 2009 to investigate the causes and responses to the bushfires which swept through parts of Victoria in late January and February 2009.

Yesterday, the VBRC delivered its Final Report. Whilst there were many causes of the bushfires, a staggering five of the eleven major fires that began that day were caused by failed electricity assets.

In its Final Report, the VBRC recommends “major changes to the state’s electricity distribution infrastructure and its operation and management so as to make the distribution system safer on days when fire risks are acute. There are two areas of major change: extending Energy Safe Victoria’s mandate and resources to require and enable it to play a more active role in reducing the risk of electricity distribution infrastructure causing bushfires through strengthening its regulatory capacity and replacing ageing electricity distribution infrastructure with technology that delivers greatly reduced bushfire risk.”

“Knowing that these recommendations will take time to implement, the VBRC also recommends some interim measures aimed at reducing the risk of electricity assets causing bushfires in the short term. These involve reducing the length of the inspection cycle, improving the efficacy of asset inspection, modifying the operation of automatic circuit reclosers (circuit breakers), retrofitting vibration dampers to longer spans of power line, and fitting spreaders to power lines to minimise clashing.”

The VBRC makes it clear that a large part of the reason for under-investment in the electricity network relates to the current regulatory approval process for capital expenditure by the State’s five electricity distributors. As distributors are geographic monopolies, they are subject to close scrutiny to prevent over-charging. So should a distributor wish to upgrade some of its network it requires the approval of the Essential Services Commission of Victoria (ESCV) to make the investment and recover the costs from its customers – the electricity retailers, which then pass the costs on to end users (households and businesses) in the form of higher supply charges and usage charges. The ESCV’s role is to evaluate distributor investment proposals and to make a decision as to which ones are likely to pass the cost-benefit test. For those proposals that are approved the ESCV also determines how much of the cost can be recovered from customers and over what time period.

Whilst this seems a sensible approach, it assumes that the benefits of any investment can be clearly measured or estimated. In the case of distributors’ proposals to place power lines in high-risk bushfire areas underground (called “undergrounding”) the economic benefits to the community of avoiding bushfires was difficult to estimate. As a result the ESCV rejected such proposals as they could not demonstrate a clear cost-benefit case. In its report the VBRC highlights the fact that “in 2004 and 2005 Powercor presented compelling submissions to the [ESCV], seeking revenue to place power lines in high-risk bushfire areas underground.”

In light of the significant contribution of the electricity network to the loss of life and property we would like to share the VBRC’s specific recommendations in relation to electricity-caused fires:

RECOMMENDATION 27
The State amend the Regulations under Victoria’s Electricity Safety Act 1998 and otherwise take such steps as may be required to give effect to the following:

• the progressive replacement of all SWER (single-wire earth return) power lines in Victoria with aerial bundled cable, underground cabling or other technology that delivers greatly reduced bushfire risk. The replacement program should be completed in the areas of highest bushfire risk within 10 years and should continue in areas of lower bushfire risk as the lines reach the end of their engineering lives
• the progressive replacement of all 22-kilovolt distribution feeders with aerial bundled cable, underground cabling or other technology that delivers greatly reduced bushfire risk as the feeders reach the end of their engineering lives. Priority should be given to distribution feeders in the areas of highest bushfire risk.

RECOMMENDATION 28

The State (through Energy Safe Victoria) require distribution businesses to change their asset inspection standards and procedures to require that all SWER lines and all 22-kilovolt feeders in areas of high bushfire risk are inspected at least every three years.

RECOMMENDATION 29
The State (through Energy Safe Victoria) require distribution businesses to review and modify their current practices, standards and procedures for the training and auditing of asset inspectors to ensure that registered training organisations provide adequate theoretical and practical training for asset inspectors.

RECOMMENDATION 30
The State amend the regulatory framework for electricity safety to require that distribution businesses adopt, as part of their management plans, measures to reduce the risks posed by hazard trees—that is, trees that are outside the clearance zone but that could come into contact with an electric power line having regard to foreseeable local conditions.

RECOMMENDATION 31
Municipal councils include in their municipal fire prevention plans for areas of high bushfire risk provision for the identification of hazard trees and for notifying the responsible entities with a view to having the situation redressed.

RECOMMENDATION 32
The State (through Energy Safe Victoria) require distribution businesses to do the following:

• disable the reclose function on the automatic circuit reclosers on all SWER lines for the six weeks of greatest risk in every fire season
• adjust the reclose function on the automatic circuit reclosers on all 22-kilovolt feeders on all total fire ban days to permit only one reclose attempt before lockout.

RECOMMENDATION 33
The State (through Energy Safe Victoria) require distribution businesses to do the following:

• fit spreaders to any lines with a history of clashing or the potential to do so
• fit or retrofit all spans that are more than 300 metres long with vibration dampers as soon as is reasonably practicable.

RECOMMENDATION 34
The State amend the regulatory framework for electricity safety to strengthen Energy Safe Victoria’s mandate in relation to the prevention and mitigation of electricity-caused bushfires and to require it to fulfil that mandate.

The costs of these recommendations are likely to run into the billions of dollars. As a result, if implemented, they would lead to a significant increase in Victorian household and business electricity bills over the coming decade.

We would like to know your thoughts on having to pay higher electricity bills as a result of the costs of implementing the VBRC’s recommendationsabove. You can vote in our poll here.