ELECTRICITY (MISCELLANEOUS) AMENDMENT BILL

Final Stages

The Legislative Council agreed to the bill with the amendments indicated by the following schedule, to which amendments the Legislative Council desires the concurrence of the House of Assembly:

No. 1. Clause 7, page 3, line 20—Delete the definition of designated day

No. 2. Clause 7, page 5, line 29—Delete 'the amount of $0.54 per kWh' and substitute:

the feed in price

No. 3. Clause 7, page 6, lines 13 to 29—Delete subsections (5) and (6) and substitute:

(5) A person is not eligible to receive a credit under this section—

(a) on or after 1 October 2013 in respect of a generator (being a qualifying generator) unless the person is a Category 1 qualifying customer or a Category 2 qualifying customer in relation to that generator; or

(b) on or after 1 October 2016 in respect of a generator (being a qualifying generator) unless the person is a Category 1 qualifying customer in relation to that generator.

(6) If a generator is, on or after 1 October 2011—

(a) altered in a manner that increases the capacity of the generator to generate electricity; or

(b) disconnected and moved to another site,

a credit under this section will not be payable from the date of the alteration or disconnection.

No. 4. Clause 7, page 6, after line 39—Insert:

(9) For the purposes of this section—

(a) a Category 1 qualifying customer is a qualifying customer in relation to a qualifying generator where—

(i) the generator is a qualifying generator before 1 October 2011; or

(ii) a person, before 1 October 2011, has received permission to connect the generator to a distribution network from the holder of a licence authorising the operator of the network and has, within 120 days after 1 October 2011, made arrangements with the holder of the licence for a new meter to be installed on account of that connection; and

(b) a Category 2 qualifying customer is a qualifying customer in relation to a qualifying generator where—

(i) the person does not qualify to be a Category 1 qualifying customer under paragraph (a); but

(ii) —

(A) the generator is a qualifying generator on or after 1 October 2011 and before 1 October 2013; or

(B) a person, before 1 October 2013, has received permission to connect the generator to a distribution network from the holder of a licence authorising the operation of the network and has, within 120 days after 1 October 2013, made arrangements with the holder of the licence for a new meter to be installed on account of that connection.

(10) In this section—

feed in price means—

(a) in relation to a Category 1 qualifying customer with respect to a qualifying generator—$0.44 per kWh;

(b) in relation to a Category 2 qualifying customer with respect to a qualifying generator—$0.16 per kWh.

No. 5. Schedule 1, clause 1, page 7, line 40—Delete paragraph (d) and substitute:

(d) disconnected and moved to another site,

No. 6. Schedule 1, clause 2, page 8, after line 8—Insert:

(ab) will be taken to be a Category 1 qualifying customer under section 36AE (as enacted as part of new Division 3AB) with respect to a qualifying generator; and

Consideration in committee.

The Hon. M.F. O'BRIEN: I move:

That the Legislative Council's amendments be agreed to.

It is my intention, if I get the concurrence of the opposition, to accept all amendments as a package. I have spoken with the deputy opposition leader and he is agreeable to accepting them in totality.

On 31 August the Premier announced that it was his intention to increase the feed-in tariff from 44¢ to 54¢. Since making that announcement, over 45,000 households in South Australia have joined the scheme, and as of three days ago, on 20 June, a total of nearly 73,000 households had joined the scheme in that they were either connected to the grid or would be connected to the grid.

One of the amendments within the group is an amendment that we will reluctantly accept because we want this legislation dealt with tonight. It is an amendment put through by the Liberal opposition, with the concurrence of the Greens, which prevents the Premier's promise and undertaking to 73,000 households in South Australia from being realised. Effectively, the feed-in tariff will remain at 44¢.

I have had extensive discussions with the opposition in working this up. We have talked about the financial modelling that it necessitated. There was a reference to ESCOSA who looked at four different models and I have appreciated the input from the opposition, particularly the member for MacKillop, and also the Greens. It has been a robust process and I can understand their concerns about increasing cost imposts on other consumers of electricity who do not have panels on their roofs.

One of the reasons that we moved to close down the scheme was because we were, as a government, becoming concerned at the cost impost on those households that were financially unable to avail themselves of solar panels, or were not so inclined. I have a good understanding of the Liberal Party's position on this, but the government came to the view that a promise had been made—in this case a promise to 45,000 South Australian households—that had to be honoured.

These households, predominantly, are in the mortgage belt. They are in our new and establishing suburbs in the south, the north and the north-east: households that are struggling to balance the complexities of the family budget and who have made a decision to put the panels on the roofs of their houses to get some control over their electricity prices. We felt that it was unfair to these householders to take away something that influenced their decision to purchase.

There is going to be great disappointment in 73,000-odd households throughout South Australia with the decision that the Liberal Party has made, but we are prepared to accept it, because we believe that these households ultimately deserve some surety, and that the legislation should go through tonight. Also, industry needs the certainty that our step-down scheme over five years will come into effect on 1 October—and for that reason I am prepared to accept the amendment that the Liberal Party, with the support of the Greens, has adopted in the Legislative Council.

We have a suite of propositions within our legislative package: most importantly, the step-down proposition that industry is desirous to see implemented on 1 October. For those reasons, we would like the package of amendments to go through forthwith.

Mr WILLIAMS: Might I say that this is politics, this is pure politics that we have just seen and heard. I do not mind reminding the committee that members of this government love standing in front of cameras and saying that the thing about being a good politician is taking the tough decision and making the right decision. Can I tell the committee that the only people who have done the right thing today by the people of South Australia are the Liberal Party.

Can I say that I am delighted that other minor parties in the other place supported the Liberal Party, but the Liberal Party took the right decision, and the minister knows that, the Premier knows that and everybody in the Labor Party knows that. I know full well that some of those 73,000 people might feel that they have been done over a little, but let's not forget that there are hundreds of thousands of other South Australians, the ones who would have been paying for this nonsensical 10¢ increase, who are going to feel relieved. There are about 700,000-odd individual consumers of electricity in this state. I feel somewhat sorry for the 73,000 who feel that they had an expectation that the Premier had made them a promise.

The problem for the Premier and his government is that they made the promise on 31 October last year and they did nothing about it. I do not blame this minister for this; it is his predecessor who was so slack that he did nothing about bringing the legislation to the house to implement that promise, and in the meantime other factors, principally decisions made in Canberra, saw this industry and the installation of solar panels get out of hand.

That stampede of the installation of solar panels is going to cost South Australian electricity consumers quite a bit of money—those hundreds of thousands I have talked about. The Liberal Party makes no apology for making the right decision. It is something which the government often pays lip-service to but often fails to actually live up to. Let me say that I think the parliament has come to a reasonable decision, a reasonable landing place on this. It is not my preferred option.

The minister has told us it is not his preferred position. I think it is a lot better than the position that the government brought to the house, and I do thank the minister for his work in getting to this position. I made a commitment to the minister about a fortnight ago. We sought some further information, and the minister facilitated that. I made a commitment to him that we would pass this legislation this week if he enabled us to get some further information, which he did, and it was provided by ESCOSA. That, I think, informed all of us.

Also, in the meantime, we saw that this stampede of installations was getting even further out of hand. I understand that the 73,000 the minister just told the committee about—the 73,000 households which have made commitments to install solar panels—is a substantially greater number than that we believed was the correct number even a matter of a few weeks ago. This has moved so quickly that it has required us to actually make the tough decision. I believe we have done that; we have made a tough decision, but it is the right decision. I make no apology for that, and the Liberal Party makes no apology for that.

I remind those members: let's just put the politics aside for a moment. I know what the government is planning to do come the next election. It probably has the names and addresses of all those who have a solar system on their house, and it will probably letterbox them all and blame the Liberal Party—and I note some nodding. That will just confirm that people who enter that sort of process have no feeling for making the right decision and/or the tough decision.

We have saved the average consumer of electricity in South Australia a substantial amount of money today. This one matter will save around about $10 million a year. In fact, on the number the minister has just told the house, I suspect it will be substantially more than that. On the work that ESCOSA provided for us over the 17 years that the scheme is due to continue to run, my best estimate was that it was going to cost about $150 million. On the number that the minister has just provided, I think that would have underestimated it substantially. I suspect we are talking well in excess of $10 million a year that is to be saved off the average electricity account in South Australia—in total; not off each account.

Every industry analyst—I have read a fair few of them over the last few months leading up to these decisions—points out that this is probably the most ineffective and costly way of achieving carbon abatement that we have in this country at the moment. It is well in excess of double the cost of achieving carbon abatement from large wind turbines. It is well in excess of double of what we achieve by using bioenergy technologies. It is not a very effective way of meeting the goals that have been set.

Again, having reined it in a little, the Liberal Party makes no apologies. We are pleased that the government has decided to accept these amendments as they come from the other place. Let's get out there and inform the community of the decision the parliament has made today. Hopefully, come October this year, the industry that has grown around this developing technology will not hit a brick wall but will continue; however, I think we all expect it to slow down substantially. There are a lot of people out there whose livelihoods rely on this industry to keep them going.

I am delighted that the minister has seen the good sense in having a feed-in tariff—albeit a very much modified feed-in tariff—to continue for the next couple of years, and go on for the next four or five years. That will lessen the impact as the industry approaches that brick wall in October. Hopefully, the industry will find itself on a reasonable footing.

We do expect electricity prices to continue to rise, and to rise quite rapidly, just as we do expect the price of PV cells and the system's associated equipment to decrease much further. I think those of us who have made a bit of a study of this industry expect that, within a very short period of time, probably three or four years (it might be a little bit sooner or later) people will not need any incentive at all to go out and purchase PV systems to put on their rooftops. I commend the amendments to the house.

Motion carried.

At 18:34 the house adjourned until 6 July 2011 at 11:00.