A federal initiative aimed at cutting household electricity bills has been savaged by providers and unions, claiming it would threaten thousands of jobs and weaken services.
The Australian Energy Regulator on Thursday released its draft determination calling for Ausgrid, Endeavour Energy and Essential Energy to retroactively reduce expenditure by $6.5 billion, or 37 per cent.
CEO of the three companies, Vince Graham, says if implemented the plan will immediately result in 4600 job losses, or 38 per cent of the workforce, across NSW.
He also says customers will be asked to bear the brunt of reduced services.
"Surprisingly, in a new regulatory initiative, the AER is proposing to reduce network maintenance costs and argues customers should accept more local blackouts and be later compensated," Mr Graham said.
"These local blackouts would inevitably occur on the hottest summer days of the year.
"Networks NSW will not compromise on the safety of the public and our employees being our number one priority."
The AER says the proposed changes should result in lower gas and electricity bills for consumers in the ACT and NSW.
But Mr Graham says the AER failed to meet its legal requirements to disclose its benchmarks before September 30, preventing proper public examination.
"This fails both the public interest and procedural fairness tests," Mr Graham said.
The Electrical Trades Union (ETU) says the money ripped out of the system will cause job losses and sink the state into a Third World electricity system, where people using life-saving technology at home will be at the mercy of extended blackouts.
"In my view economists shouldn't be driving the electricity network," ETU NSW Secretary Steve Butler said.
Energy Supply Association Chief Executive Matthew Warren said the AER's draft determination demonstrated a weak understanding by the regulator of how energy businesses operate.
It comes as Premier Mike Baird takes his plan to sell 49 per cent of the state's electricity network to the next year's March election, claiming the sale will raise $20 billion to be spent on major infrastructure projects.