THE STATE government is suing Victoria's largest energy company for more than $20 million in damages caused by one of the Black Saturday bushfires, a move the utility is warning could drive up electricity prices.
The lawsuit has been launched against AusNet Services on behalf of the state and nine other government agencies and departments that had public property damaged or destroyed by the fire in the Murrindindi Shire, including the Marysville police station and primary school.
The fire claimed 40 lives, injured 73 people and destroyed 538 homes in and around Marysville, Buxton and Taggerty.
A separate class action brought by hundreds of Murrindindi locals more than two years ago is due to begin in the Supreme Court in February.
AusNet has renewed warnings that it may try to pass on to consumers the costs of fighting these current compensation lawsuits in an apparent bid to protect its bottom line.
Last year, the utility received special permission from the federal Australian Energy Regulator to apply to raise energy prices if its insurance proves insufficient to cover the cost of bushfire-related legal proceedings.
The strategy has come under fire from former financial analyst-turned-energy industry critic Bruce Robertson, who calls the move "morally indefensible".
"They seem to be able to lump in an awful lot of costs that you would think should actually be born by the corporation itself and pass them onto consumers," Mr Robertson said. "It's heads they win, tails they win."
Victorians are already set to be slugged with a 5 per cent rise in electricity costs next year, adding $53 to $144 to the average annual household bill depending on the service provider.
The increase has been approved by the AER due to the "previous under-recovery of costs, and bonuses the companies have received for overall improved reliability of their services".
The approved rise will wipe out some of the $200 savings in household electricity bills forecasted with the Abbott government's scrapping of the carbon tax.
Premier Daniel Andrews declined to comment on the lawsuits or a potential price rise from the legal actions, saying there were "checks and balances" in place to ensure energy companies are "doing the right thing".
"There's a range of gateways that any of our energy distribution companies need to get through," he said.
"I know there are many people in the community who have views about that, that's why we closely monitor and have a very watchful eye in terms of the price rises that are put in place."
The Murrindindi lawsuits are the latest in a series of class actions filed against AusNet over the 2009 fires that claimed 173 lives and cost an estimated $4 billion in damages across the state.
The utility's insurers recently agreed to pay $378 million in compensation to thousands of Victorians affected by the Kilmore East-Kinglake fire, which is believed to be the largest class action settlement in Australian history.
"Notwithstanding the settlement…AusNet Services considers that its insurance and, if required, a claim to the regulator for pass-through of residual costs ultimately incurred in relation to the Murrindindi proceeding, should be sufficient to cover AusNet Services' liability, if any," the company announced to the ASX stock exchange last week.
The company has steadfastly denied it has any responsibility for the Black Saturday bushfires and has not admitted liability in any previous action.
Victoria's coroner has been forced to suspend its own investigations into the causes of the Murrindindi and Kilmore East fires because of the ongoing lawsuits, which must be concluded before findings can be handed down.
But the State Government offered its official version of the origins of the Murrindindi fire in documents filed in the Supreme Court.
"(The fire) was ignited when one of the conductors failed, fell to the ground and draped across a fence, causing arcing and the discharge of heat and sparks into dry vegetation," the statement of claim said.
It alleges that the conductor near the Murrindindi saw mill was damaged after "inadequate clearance" was left between the conductor and a stay wire, which was due to negligence by AusNet and a company it contracts to do asset inspections.
The State Government has launched the class action on behalf of itself and nine other plaintiffs, including the Country Fire Authority, VicRoads, Alexandra District Hospital, Parks Victoria, State Emergency Services and the director of housing.
One source told Fairfax Media that the State Government was hoping to mitigate the damages it may have to payout after being added as a co-defendant in the Murrindindi action brought by residents.
In the Kilmore East-Kinglake suit, the state of Victoria, CFA and Department of Environment had to contribute $103 million to the settlement.
ASX-listed AusNet, which declined to comment due to the legal proceedings, posted a profit of $178 million in 2014, down from $273.5 million the year before.
