SA Power Networks has responded to suggestions made by The Australian newspaper that the company’s CaMS/NBN work was drawing resources away from the regulated business.

SA Power Networks says that The Australian approached them with these suggestions and after several conversations the newspaper forwarded an internal document which involved an IT assessment of the potential impact of CaMS/NBN-related IT work. According to SA Power Networks this was a first draft of a working paper that changed substantially before publication and which was used as a basis for determining what ADDITIONAL skills would be required to support the IT project needs of CaMS/NBN as well as the regulated business.

The company says that contrary to the Australian’s suggestions, no resources have been diverted from undertaking operational activities including Vegetation Management, Asset Management and capital projects.

SA Power Networks says that what they advised The Australian was:

• CaMS is a division of SA Power Networks that operates and competes in the competitive market (bids for project work for private and government funded projects).

• CaMS is ring-fenced separately from the regulated part of SA Power Networks’ business. There is regulatory oversight of this ring fencing with a Cost Allocation Methodology approved by the Australian Energy Regulator and compliance with the methodology audited externally on an annual basis.

• CaMS has its own workforce supplemented by third party contractors. Where it uses SA Power Networks staff from the regulated business CaMS pays all costs to the regulated business. In relation to NBN we are recruiting up to 400 employees (mainly contractors) to undertake NBN work. Only three employees from the regulated part of SA Power Networks business are now assisting CaMS with the NBN activities — these personnel are being paid for by the CaMS business and will be backfilled within the regulated business.

• There is a benefit for the regulated business (and our customers) in that CaMS gives us access to a wider resource pool when we need it (for example in responding to multiple outages in extreme weather events) and we can spread overhead costs against external business activity.

• The allocation of IT resources involves contractors who are allocated to projects as they ebb and flow. The draft document in the possession of The Australian was an early assessment of a range of potential implications on IT resources associated with developing additional systems required for work to be done by CaMS for NBN. This is part of an ongoing and appropriate assessment of IT resource requirements and allocations.

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