STATUTES AMENDMENT (NATIONAL ENERGY RETAIL LAW IMPLEMENTATION) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 15 March 2012.)

Mr WILLIAMS (MacKillop—Deputy Leader of the Opposition) (11:04): I indicate to the house that I will be the lead speaker on this matter, not that I expect to take a long time and not that I expect there to be a significant number of speakers from this side of the house. I have had the great pleasure of being the shadow minister for energy for a significant time now, and I have been the shadow minister at the time when a number of bills have been introduced and debated in the parliament with regard to moving to a national electricity market and then implementing various stages of the development of the national electricity market.

This is the latest of that long line of legislation to transfer regulatory powers with regard to the production, distribution and sale of energy—it started with electricity but it is now called the energy market because it encompasses both gas and electricity—and to move from a state-based regulatory system to a federal, or national, based regulatory system. When I say 'national based', I remind the house that the national market consists of those markets in Queensland, New South Wales, Victoria, Tasmania, South Australia and the ACT. Obviously, the Northern Territory and Western Australia are not connected to the eastern seaboard grid, which the rest of the nation is, including, now, Tasmania via Basslink.

The latest tranche of the change of law, in fact, occurred about 12 months ago. We passed the national energy retail law through parliament to establish the legal framework. South Australia is, and has been through this whole process, the lead legislator and, when we passed the law as a law of South Australia, the other states simply then individually passed an application law which basically says that the law in South Australia applies to, say, for instance, Victoria, New South Wales, or whatever. In this case, we now have an implementation law which basically will implement that national retail framework, in particular, what we call the customer framework, wherein the regulatory functions pertinent to the relationship between retailers and customers is transferred to the national regulatory regime.

There is a pair of bills in this process and this is the first of them, the implementation bill. Basically, as I said, this implements the customer framework under the national energy retail law to begin as of 1 July. The bill does a number of other things, including implementing, and then it makes some changes to the act that was passed through the parliament last year. There are several sets of changes to that legislation. One set is a series of amendments which, I guess, it could be argued, are technical arguments because, since we passed the bill last year, almost 12 months ago, the Australian Energy Regulator has identified some areas where it was thought the act could be modified to make it work better and some small anomalies, which we are now taking the opportunity to sort out. The implementation bill also highlights that there are some aspects of this national retail law which will be unique to South Australia and are not shared by the other jurisdictions.

To the best of my understanding of the changes that have been proposed, we are not actually making changes which will be noticed by anybody in the industry, whether it be a retailer or customer. What we are doing is transitioning those changes from state-based legislation to the federal system but we will also leave in place legislation in South Australia (such as the Electricity Act and the Gas Act) under which we will maintain some state-based regulatory functions, so we need to ensure in this implementation bill that those things are able to occur under the law.

As I said, the relationship is being transferred to a national scheme. To the best of my understanding, there will be little or no change noticed by those customers or retailers. The opposition has liaised with a number of stakeholders in the industry, and we have sought feedback from them. The feedback has generally been supportive of the legislation and the move to shift to this new regulatory regime; the latest was a briefing I had this morning.

I seem to have mislaid the piece of paper I am looking for, so I will have to wing it without it. I had a briefing this morning with Mark Henley. We liaise with a number of groups that represent the customer side of the stakeholder group. Mark Henley put to me a number of issues they had particularly pertaining to disconnections and late payment fees. I was able to assure him that, in my understanding, there was really no change, that these things were being transitioned as they are now in current South Australian law.

I congratulate Kristie in my office (who listens to what I say in this place and supports me greatly) because the piece of paper I mislaid was obviously sitting on my desk upstairs, and it has miraculously arrived. Thank you, Kristie—now I can be much more to the point. One of the issues SACOSS raised with me was that they were desirous of there being a review into this change at some time (they suggested maybe in two years) so that we can be reassured not just that the transition has been smooth but that the outcomes continue to provide for the South Australian community, in particular for those less well off in the community and those who have a real struggle with things like paying utility bills.

I suggest to the minister (and he might even take this on board or it might fall in the lap of a future government) that at some time—maybe in two years' time—a review be undertaken by ESCOSA as to the relative effectiveness of the change to the national system as opposed to the system we have enjoyed in South Australia to date. SACOSS's position is that they believe ESCOSA would be the appropriate body. They spoke quite highly of the role ESCOSA has played and the work it has done to date in South Australia.

They also put to me concerns about disconnections, and I was able to assure them that I was of the understanding that the disconnection regime would not be dissimilar to what has already occurred here in South Australia. They raised an issue—and it is one that is near to my heart because members who have heard me speak in this place before would remember that I raise the issue quite regularly of this parliament passing legislation which, to my mind, puts far too much of the detail in regulation rather than in the act.

I was pleased that the South Australian Council of Social Service (SACOSS) expressed a view with regard to things that impact on energy customers that a lot of the detail is left to the regulation. Indeed, it happens regularly that we do not see exactly what the wording of the regulation is and, therefore, we cannot assess what the likely impact might be until well after the parliament has debated the bill and given the head powers. I agree with the sentiments expressed by SACOSS that, as a parliament, we should redress this and move back to a situation where we put more detail in the act and where regulation-making powers are saved just for those things where you need to make changes on a fairly regular basis and where it would be quite difficult and burdensome to reopen the act and bring it back into the parliament.

In that briefing I was given some interesting figures. In their estimation—we may have been talking about energy customers in general, but it might apply directly to electricity customers—between 0.3 and 0.4 per cent of those customers find themselves on some sort of hardship program. We have a hardship program here within South Australia and that will be transitioned into the new regime.

He also made the point that about 25 per cent of customers struggle to pay their bills and, from the latest information I had, that is about 200,000 of about 700,000 electricity customers in South Australia who are concession holders. It fits within that ballpark. Whenever we make these changes, we have to be very sensitive to the needs of clients and what impact it may well have. I put a question on notice to the minister—and he may make some statement with regard to it in his summing up—which is about the disconnections during extreme hot weather and the inability to pay in the short term. SACOSS was concerned about the impact of that. The minister might explain if he foresees any changes to the regime with regard to disconnections during extreme hot weather and if there is provision in the new regime to protect customers. As we all know, it is one thing for a retailer to seek a disconnection for non-payment of an account but I think we all agree that doing that in the middle of a heatwave is unconscionable.

They asked about late payment of fees, and I was able to give them the information that there are clauses in this bill which ensure that late payment of fees cannot be used as a fining system but only to recover payment costs. They also expressed some concerns about the ongoing level of service standards and they have pointed out that the service standards that customers enjoyed in South Australia were better than in other jurisdictions, and this is in the case where a customer might ring up to complain about an element of their service or to seek redress for some part of the service they expect as a client of an energy retailer. My reading of the legislation is that that is covered off as well, so I passed on that information.

I do not wish to take too much time of the house. The opposition is supporting this legislation. We were in government when this process to establish the national electricity market began and we have been supportive of it all the way through. We think it has helped and supported the delivery of energy, in particular, electricity and gas (particularly electricity) here in South Australia.

We think that the move to the national market reflects the modern world. It has benefited South Australia. There are still plenty of things I think we need to repair and fix up. I am aware that a number of reviews are going on currently as to the way the market operates and with regard to the current rules under which the market operates, and I guess there will be changes as we go forward. Once implemented, the National Energy Retail Law will basically finalise the transition from the state-based regulatory regime to the national-based regime.

The government is retaining price control for electricity here in South Australia. I am not convinced that that is necessary. All the reports I have seen into the competitive nature of the retail market in electricity suggest that Victoria has the most competitive market in the world and that South Australia has the second most competitive market in the world. The very nature of that competitive market means that the continuation of price control here in South Australia is probably no more than a nonsense. I am sure that it is only to service a political end—so that the government can say that it still maintains price control to protect the citizens of the state. The reality is that competition delivers a better control on prices than does the price setting that ESCOSA makes.

One of the other things I am quite pleased about that will come out of this transition is that, as customers' contracts are transitioned to the licensed retailers under the new regime, there has been a move to encourage customers here in South Australia to go on to a market contract, as opposed to a default contract. Through the transition under the new licensing regime, any customers who remain on a default contract will remain on that only as a temporary measure, and the retailer will be obliged to contact those customers and assist them to move to some sort of market contract, which should indeed benefit the customers. I think there is a saving of at least several percent in the annual cost of electricity for people who are on a market contract. That is just one of the little things which I think will be improved by the change. I think I have made enough comments about this bill, and I commend it to the house.

Mr VENNING (Schubert) (11:23): As the shadow minister has just said, this is all about transferring powers from a state-based to a national-based system. All except the Northern Territorians and the Western Australians will be involved in this, because they are not connected. Of course, the question comes to mind as to why not. I know that it is a long way across the Nullabor Plain, but I would have thought that the Territory could have been connected, say, through Queensland. Of course, they probably do not have a huge consumer base at the end of it, but it would be nice to know that we had a true national system.

Madam Speaker, as you know, we passed the national law legal framework here in this house a year ago. This is a follow-up, as we know. It is an implementation law outlining the retail framework to the national regulatory regime and the customer framework as from 1 July this year. We therefore need to change our state laws to facilitate this, and we are assured that the consumer will not notice any difference.

I want to raise now the solar part of this. I am most concerned about what has happened to the eligibility for the solar feed-in tariff scheme. Many of my constituents put in an approved system, as did a lot of people right across the state. It was really taken up very strongly, and it was signed off; that is, it was an approved ETSA installation, in many cases. The trouble is that now they have gone back on that approval and advised that it is up to the customer (my constituents) to fix it at their own expense; that is, install a new meter and arrange and pay for an electrician to transfer the connection of the solar panels to that meter. I have a letter from a constituent (in fact, I have several letters), and I will quote part of one, without any names or addresses:

As per the letter from ETSA this transfer will be at our cost for the new meter and to also arrange an electrician to transfer the connection of the solar panels over to the new meter.

We have also been advised by ETSA in their letter that our [feed-in tariff] payments have been temporarily suspended until our solar PV system has been connected to the alternative connection point.

Our biggest disappointment in regards to this matter is ETSA approved our current installation and have since gone back on our approval and are now advising us that [this] is up to us to fix it at our own expense when we have already paid out a large amount for the installation as it is.

I then sought a copy of the letter written by ETSA Utilities to the constituent:

...the NMI which you requested to have your solar PV system connected to does not pass the test which excludes systems where the generation of electricity is for the dominant purpose of making a profit.

We appreciate that you may have chosen this connection point under advice from your solar installer with the full intent of reducing the overall energy costs you presently incur from this and other connection points or properties you are responsible for rather than for making a profit.

I know we had this debate a year ago, but I still have a lot of difficulty with this. What is wrong with making a profit? After all, these people have spent a lot of money (in some instances), so are they not entitled to get a return on that investment? That is where I have the greatest difficulty. We have changed the rules. We have moved the goalpost after the match has started. A lot of people borrowed money to install solar cells.

At this point in time, I declare that my family has installed solar panels, but by a pure stroke of luck we have them on a single meter and this does not apply to us. I feel for those people whose cells are connected through the wrong meter. The cost to buy another meter and have the connection altered is a sizeable amount of money. So, I have a lot of difficulty with that. I think the government (state or federal) cannot change the rules after people have made a sizeable investment.

Having solar panels at home and being in view of the wind turbines, I know which works and which does not. The solar cells work every day (during daylight hours), even on a dull day the thing is purring away nicely. We ought to be encouraging all of our constituents to install solar panels and to make a profit, otherwise why would you spend the money? Why would you spend thousands of dollars if you are not going to get some return on that? Wind turbines are costing the state millions. They are not the answer, because on a windy day they do not work and on a hot day they turn them off, which is exactly when we need the power.

This is all about protecting the future requirement of power generation in this state. After what happened in Queensland last week, we know that people are really starting to feel the cost of living and one of the biggest costs to our constituents today is the cost of electricity. A lot of our older folk, our pensioners, are turning off their air conditioners because they cannot afford the power bill. The power bill has certainly gone through the roof. So, at this moment, when we discuss a matter like this with regulations of state, I think we have to at least allow our people to have affordable electricity so they can live in some comfort and not be having to sweat it out at home with a wet towel over their head because they cannot afford to turn on the air conditioner.

That is what is happening in my electorate and some members opposite would certainly know about this, so why do you not encourage people to install solar cells and encourage them to make a profit so they get some money back? If they know they can make a profit, they will install them in the first place. They will go to the bank, get a loan to buy the cells and over, say, 10 years, they will get their money back. I cannot understand the logic in that because, in the meantime, until we get new technology that gives us a base load of power, these work. I think that we should be encouraging it more and more.

I am strongly opposed to any more wind turbines, but I am not opposed to individuals having a wind turbine. In fact, if it was worthwhile, I would consider putting a wind turbine on my own house because we always used to have them. In my first 30 years of my life, we lived with a wind turbine—a 32-volt power generator. We get used to that. I would be happy to do it again if it was worthwhile. They will not be obtrusive, we will not be putting them up across the skyline and it will be at my cost. I would have to look after it—there would be no cost to the state to look after it—and I would pull it down at my cost when it is worn out.

What worries me about the huge wind turbines is they are extremely high cost to run, there is a high cost to put them there and they are high maintenance—and we have all paid for that—and what happens when their life is finished? Who is going to remove them? Who is going to restore the site to that pristine condition, usually across the nicest skyline that we have on a high spot? My opposition to these wind farms has been quite obvious. I still say that, if wind farms were the answer, why do we not put them across Mount Lofty? Nobody has given me the answer to that. If it is good enough to put them at Keyneton, if it is good enough to put them on the Hummocks, it is good enough to put them on Mount Lofty. We know why. It is obviously because of the visual impact. Well, why is the visual impact any worse here at Mount Lofty than it is, say, at the northern Hummocks or at pristine Keyneton—the beautiful rolling hills of Keyneton in the Barossa Valley—which I certainly hope does not happen.

Anyway, without any further ado, I know we are supporting the bill. The damage to this was done probably a year ago, but it does not make it right and I still believe that something should be done for those who have put their photovoltaic generators on under the existing situation where they were approved. If they have to be changed, I believe they should be changed at zero cost to the constituent. In fact, I believe that the government or the regulator or ETSA should at least help pay for the extra installation to keep them approved. I know that I am probably speaking to deaf ears but I will keep doing so at every opportunity I can get. These people, I believe, have been dealt a difficult hand. A lot of them are working-class people. They have borrowed the money to put up these things because they think they are doing it for the environment and also doing it for their own pocket and they are now finding that their investment will not be revenue positive. In fact, they will never get their money back because they cannot make a profit out of it.

With that, I commend the shadow minister for his work on this matter. Yes, I agree that, at this point in time, we bring the state into line with the rest of the country and are passing these laws and regulations so we now have a national grid. I think this is where we are all moving to. I have no problem with that but, when you hurt the little people, that is what concerns me. I support the bill.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Manufacturing, Innovation and Trade, Minister for Mineral Resources and Energy, Minister for Small Business) (11:34): I always love following the member for Schubert. He is, without a doubt, one of my favourite Liberal members and a man of great integrity. I think he is the longest-serving member on the opposition benches.

Mr Venning: Bob Such is the only one.

The Hon. A. KOUTSANTONIS: Opposition benches, not Independent benches. I remember the day when then premier Olsen walked into the parliament to announce the privatisation of ETSA. The member for Schubert said to me afterwards in quiet reflection that he never thought he would be here doing this. I listened with interest to his remarks now about electricity, but he has always acted in the best interests of his constituents.

Mr Venning: I don't think so; it was a long time ago, Tom.

The Hon. A. KOUTSANTONIS: It was a long time ago but I remember it distinctly. I would like to thank members for their remarks about the bill. To save some time, and for expediency, I will answer some of the questions on the bill coming up: the National Energy Retail Law (South Australia) (Implementation) Amendment Bill that the shadow minister foreshadowed in the house. He talked about: how would customers be protected from being disconnected on extreme heat days?

The National Energy Customer Framework envisaged in the bill coming up allows for a prohibition on disconnections during an extreme weather event only where the jurisdiction in which the customer is located has defined the meaning of 'extreme weather event' in a local instrument. In the proposed legislation coming up, South Australia will define extreme weather events in a local instrument, and the definition will be the same as the current definition of an extreme heat day used by the Essential Services Commission of South Australia in its Energy Retail Code, so there will be no change.

Just to give members some security about what that is, 'extreme heat day' means any day where the forecast for the Adelaide metropolitan area issued by the Bureau of Meteorology at 4pm Central Standard Time indicates that the following day is the third day in a sequence of three days where the average minimum and maximum temperature for each day equals or exceeds 28° Celsius. I hope that allays any concerns that the honourable member may have. I thank the honourable member for his remarks.

As I said in the second reading explanation, this bill forms part of the government's package of legislation to implement a national framework for regulating retailers and distributors who sell and supply energy and gas to customers. The National Energy Customer Framework is an important component of national energy reforms, to which this government is committed.

I thank all honourable members. I understand that we are going into committee because there are amendments which attempt to exclude generators. There are a number of regional generators, in terms of photovoltaic cells, where multiple meters are on a farm. I am guessing what the member is trying to do—for which I have some sympathy—and I would like the member to indicate whether I am right or wrong. Where some farmers have put photovoltaic cells on places that are more prominent in terms of the sun and on meters that are further away from the house, they are getting some grief from ETSA about it being a profit-generating scheme rather than what it was intended for.

I understand the concerns that a lot of regional members have about this. I share some of those concerns, but I do not think there is one blanket tool that can fix this. We want to have legitimate photovoltaic generation for those people who genuinely want to conserve electricity and reduce greenhouse emissions. What we do not want to see—and what we want to try to stamp out—is profiteering. What is my definition of profiteering? It is people attaching photovoltaic cells on meters out in the middle of nowhere generating electricity for which there is no use; for example, somewhere in a field.

The Farmers Federation has approached me about this. There are some sheds that farmers use maybe once or twice a year. When they use those sheds, they generate a lot of electricity because they use a lot of heavy machinery. I have a lot of sympathy for that argument. What I do not have sympathy for is placing field generators (in terms of photovoltaic cells) out in the middle of nowhere just to generate revenue. That is the difference.

I know that some people do not want to understand this, but we are trying to protect other consumers. I note that the shadow minister is on the record as saying that renewable energy is increasing the cost of electricity for all South Australians; however, I note with interest his amendments here today and look forward to hearing his explanation for these amendments in committee.

Bill read a second time.

Committee Stage

In committee.

Mr WILLIAMS: Can I first apologise to the house, Mr Chairman. As I think I said in my opening remarks, there are two bills to implement what we are doing today; I was speaking to the National Energy Retail Law (South Australia) (Implementation) Amendment Bill when, in fact, we are debating the Statutes Amendment (National Energy Retail Law Implementation) Bill. They are similarly named.

The CHAIR: So we are dealing with item 5 in the Notice Paper; is that right?

Mr WILLIAMS: Yes. But I just want to make the point that I was confused; I hope I did not confuse anybody else in the house. I am sure that, as they were listening to my contribution, some of them may have been a bit confused, but I am surprised that nobody jumped up and pointed out the error of my ways.

Clauses 1 to 13 passed.

New clause 13A.

Mr WILLIAMS: I move:

Page 6, after line 22—Insert:

13A—Amendment of section 36AC—Interpretation

Section 36AC—after its present contents (now to be designated as subsection (1)) insert:

(2) For the purposes of the definition of excluded generator, if there are 2 or more meters for measuring the consumption of electricity on 1 site, in assessing the purpose of the installation of a generator on the site to determine whether or not the generator is an excluded generator, the operator of the distribution network must take into account the electricity consumption of the site as a whole (despite the fact that, for example, most or all of the electricity consumption on the site is recorded by a different meter from the meter to which the generator is connected).

I am proposing two amendments to the Electricity Act under this statutes amendment bill, principally because there a number of anomalies arising from the implementation of the latest changes to the feed-in tariff scheme. Let me say from the outset that I note the minister said I had been on the public record suggesting that renewable energy has increased the cost of electricity to South Australian consumers; that is absolutely correct.

The feed-in tariff has increased the price of electricity to South Australian consumers. The feed-in tariff is paid for by all electricity consumers. The cost of the scheme is not paid for out of the generosity of the government, nor is not paid for out of Treasury; it is paid for by every electricity consumer in South Australia. Every time they get their bill, a component of that bill pays for this scheme.

Notwithstanding that, I think it is beholden on this parliament to ensure that the scheme operates in a fair and equitable way. There is nothing worse than having a scheme, albeit costly, that is both more costly on some individuals and grossly unfair to some individuals. I think the minister understands the situation. He spoke briefly about it in his summing up at the second reading stage and he said exactly right.

In the farming community, historically, there was a separate rate charged for rural power. Quite often in a farm situation you have the homestead and a series of sheds, maybe including a shearing shed, nearby. Quite often, there is one meter box and a number of meters in it: a meter for the domestic supply and a meter for the rural supply, because they used to be charged at a different rate. Now they are charged at the same rate. The tariff is the same and it would be no problem to consolidate all those services to the one meter, except that it would come at a cost to the consumer, so they have not done it.

What has happened in a number of situations where people under those circumstances have chosen to install a rooftop photovoltaic generator is that their supplier has come out to the farmhouse ready to put a system on the roof and they have said to the client, 'I don't know why you are putting these on the roof there, because you have that great big tree there shading the house that your grandfather planted 100 years ago to shade the house because he wanted to save on energy costs in 100 years' time, so you would not have to run the air conditioner all the time.' That means—

Members interjecting:

Mr WILLIAMS: I take the point. I do want the house to understand that the grandfathers of farmers were very smart people and very forward looking; they knew what was coming. The reality is that it is very common for farmhouses to have extensive trees planted around them to try to shade them. They are often not in a coastal situation, where most of our urban communities are, and they do not enjoy the afternoon sea breeze, so they have extensive plantings of shady trees around them.

That is the reality, and the installers of the solar panel systems in many cases said to the farmers, 'Let's do this a little differently. Instead of putting the panels on the house there, let's go over and put them on the shed down in the yard where you haven't gone to the trouble of planting trees and the shed gets the full glare of the sun all day long.' That is exactly what has happened. I suspect one of my colleagues has made the same decision. The unfortunate consequence of this is that the solar system is then connected through the rural power meter.

One of the other things that have happened in rural Australia over recent years is that the wool industry has been in the doldrums for the last 20 years. Shearing sheds, which would have been a hive of industry on the average farm right up until the early 1990s, quite often lie relatively idle these days and there is very little electricity consumed in those sheds; that changes from time to time depending on what is happening on the farm.

We have the situation where a farmer who has put his solar panels on the shearing shed roof, or a machinery shed roof and it runs through his rural power meter, in a number of cases has been excluded because part of the legislation has an excluded generator clause, which says that you will be excluded if the prominent use is to feed electricity back into the grid.

That definition has been taken, as I understand it, in negotiations between the government and ETSA on how that would be applied. Those negotiations occurred on 30 September last year, the very last day that the feed-in scheme was available for people to become approved. The criterion was set that there was a minimum usage at that meter of 400 kilowatt hours per year, which is not a huge amount of electricity. However, the anomaly has now arisen where one farmer who does not use his shearing shed and uses, maybe, a light occasionally when he is in the shed of an evening and might use 250 kilowatt hours per year misses out. He does not qualify for the feed-in tariff—he misses out. His neighbour down the road with the exact same circumstances but for one reason or another maybe has a beer fridge in the back corner of the shed—

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: —yes—and consumes more than 400 kilowatt hours of electricity per year qualifies. Mr Chairman, 400 kilowatt hours is not very much. It is about the amount of energy which would be consumed by one 60 or 75 watt light bulb in a year; so, it is only a small amount of electricity. You might have a third scenario whereby the shed and the house were established more recently and actually operate through one meter, and the usage through that meter, obviously, including the house, is over the 400 kilowatt hours per year threshold and they qualify. So we have a number of farming families who in good faith have spent in some cases tens of thousands of dollars and who find themselves excluded from the feed-in tariff.

Another clause in the bill seeks to prevent people from using the feed-in tariff simply as a money-making exercise under the Electricity Act, and that clause says that, notwithstanding how much electricity your system generates, you can only be paid the feed-in tariff for up to the maximum of 45 kilowatt hours per day, and, if you generate more than that, you do not get paid the feed-in tariff for that in any case. I would argue that that should be enough to stop those who have used the feed-in tariff system simply as a money-making exercise.

Might I also make the point—and I think that I expressed this at the time we debated the last lot of changes to the feed-in tariff—that I think it is a nonsense to say that anyone out there has not put in their system without the intent of feeding electricity back into the grid. If that was the case it makes a nonsense of having the feed-in tariff. Why have a feed-in tariff if there is no expectation that electricity is going to be fed back into the grid?

What I have proposed in new clause 13A is a provision which adds to the definition of 'excluded generator' and, in fact, picks up on the point that I have made about you having a supply on one site which has been fed through two separate meters. What I am suggesting by this amendment is that, for judging whether there has been 400 kilowatt hours a day, you amalgamate the usage through the two or more meters at that site. I am sure that in 100 per cent of the cases that would mean that those people who find themselves excluded under the circumstances that I have described would, indeed, not be excluded and they would be treated in the same way as their neighbours who for one reason or another are treated differently.

I commend this amendment to the house. I will talk to the other amendment in a moment, but these two amendments, I believe, would resolve over 90 per cent of the issues that have arisen from the implementation of the feed-in scheme as amended mid last year and as applied from 1 July 2011. I commend the amendment to the committee.

Mr GRIFFITHS: I speak in support of the amendment of the member for MacKillop and deputy opposition leader. It is interesting because, as a regional MP also, I have been contacted by people concerned by this, and I know that other members have also been contacted. I have a rather interesting scenario to put to the minister, and I am grateful for the fact that he understands the concerns that we have had. In his brief contribution to the second reading he said that many comments had come back to him about this and that he understands the issue.

The chap who came to me, though, has a bit of a different scenario. He has sheds on his property but no farmhouses. So, no-one actually resides in those. He has had $100,000 worth of tools stolen in the last 10 years. Because nobody is on the property permanently, these scurrilous devils who go around and spot the properties that are remote go in and have stolen all these things. He wants to put up big lights that will illuminate the whole place every night, but he does not want to be responsible for the electricity cost of doing that unless he knows he can put in the photovoltaic cells to have some level of compensation for his costs.

That is his scenario, which is slightly different from what the member for MacKillop is talking about, but just another example of what is out there in regional areas with people who want to protect their property. He is not doing it as a money-making concern, but just wants to ensure safety and to reduce theft from his property. Other members would have other examples like that too. The challenge is to ensure that the regulations cover the absolute majority of people so that you give fairness and equity to those who have invested large sums. I declare that I have 20 photovoltaic cells on my roof, and I am very happy with the rate of return.

The Hon. A. Koutsantonis: Twenty?

Mr GRIFFITHS: Only 20, not like the member for Schubert, who probably has a lot more than that.

The Hon. A. Koutsantonis interjecting:

Mr GRIFFITHS: We did so on the basis of actually helping the environment, minister—purely that.

The Hon. A. Koutsantonis: He doesn't believe in climate change!

Mr GRIFFITHS: Yes, he does. You are putting words into the member's mouth now, minister—that is just it. We had a good chat yesterday in our portfolio meetings about these amendments proposed by the member for MacKillop. I asked a question, which he does not support if there is any reluctance from the minister to accept the amendment, if there can be some form of averaging where, if there are multiple meters on a property you can look at an averaging situation to ensure that, when the average is above the 400-kilowatt hours per year per consumption per meter, these people who have spent a lot of money have a chance to get some level of return on their investment.

Mr PEDERICK: I rise to support the comments by the member for Goyder and our deputy leader, the member for MacKillop. In a lot of ways what has happened with the solar panel rebate scheme has been farcical. There has been no clear direction for anyone out there buying photovoltaic cells and no clear direction from industry. We have seen some players on the industry side of the market go broke, but we have also seen some interesting factors with regard to the cost of photovoltaic cells. With the previous scheme that finished on 1 October 2011, when the 44¢ rebate scheme ran out, a five-kilowatt system could cost close to $20,000. Now you can buy the same system for about $7,500 under the 16¢ rebate, which is applicable at the moment. It is interesting how, with market forces and the change of value, somehow photovoltaic cells are worth a lot less than they were. I find that an interesting point of view.

With regard to the amendment the member for MacKillop has put up, it is a very real amendment and should be agreed to by the committee. As has already been stated, there could have been a shed—whether a shearing shed, an implement shed or large hay shed—that was in a far better position to have an array of photovoltaic cells to catch the northern aspect so power could be put back into the grid but also used on the property as well. I note that perhaps the only way people with shearing sheds or implement sheds with photovoltaic cells on the roof can qualify is to put in a beer fridge or, as a lot of shearing sheds have, a fridge for vaccines and other gear that has to be kept cold for their sheep husbandry actions. They have to make sure something is in there generating power.

It seems odd that you have to be using that power before you even qualify, while obviously somewhere on the property you will have a house that will be using lots of power but may not have been the best site to put the photovoltaic cells on its roof. I fully commend the motion. It has been very confusing for everyone involved. I know I have thought about putting photovoltaic cells on the roof of my place, but during the debate things were moving around and I was not sure where it was going to land, so I have not made the investment. I commend people who have made the investment, but there are a lot of people right throughout the rural areas who look like they are missing out on the ability to get the rebate. I think this is a sensible amendment so that these people can get some payback for the quite large investment they have made. I support the amendment.

Mr VENNING: I would like to speak briefly to the amendment. I support this; it is exactly what I talked about earlier, and it covers the concern I raised, except that I am concerned about where it says 'on one site' and would like someone to clarify that. I was not present in the party room yesterday when it should have been clarified—whether or not it was I do not know—but the question I have, and the shadow minister may want to tell me when he is on his feet in a moment, is: is that just for one owner, one title? What happens if you have two houses?

The member for Mount Gambier and I were having a discussion about this a moment ago, doing a mathematical on this one. If there are two houses together on separate meters—such as with an outhouse or a cottage, usually a workingman's cottage—and on the one title, is that included in this? I hope it is, otherwise you will see people running the proverbial extension cord across the yard from the shed to the other user.

Just to clarify it, the minister was aghast a moment ago that our family has a rather large solar array. Yes, we do, and I did declare that. I am a born-again climate change person—

An honourable member interjecting:

Mr VENNING: Seriously, as a family we made the decision—against my son's judgement—to spend the money because we thought we should do the right thing for the environment. That is what it was for, that was the first consideration. The second consideration was power security, to make sure that we always had power. Of course, when we did this we also planned to have a full set of batteries and a wind turbine as well as a diesel generator, so we would have all the bases covered. We have not gone there yet; we were to fit our own wind turbine about now, but with this legislation hanging around it was totally counterproductive. I am all for personal wind turbines, absolutely; but I am not for wind turbines across our beautiful horizons.

That is what it was all about, and all I can say is that it works. Go down there on a cloudy day and the thing is humming away. It is the answer. Of course, we still need base power at night because it does not answer the question at night, and hopefully that is when the little wind generator might just keep things ticking over. But, again, in the end we should be encouraged to put in the batteries because then there is power security. I can see big problems in the future. We do not want to see power cords across the yard from the shed to the house, because that is what you are asking people to do—run the power cord across the yard so that they can get the cheaper power into the house. That is not on.

Many years ago we had some instances like this when we nearly electrocuted someone—in fact, it was me—so we now have no visible powerlines on the farm at all. They are all underground, where they ought to be, because when you are mucking around with augers, etc., it is so easy to have an accident. I did that one day, and I nearly was not here. I was pushing an augur around the yard and pushed it onto the powerline above me. Luckily, I pushed it onto the earth wire first and then pushed it onto the active one; if it had been the other way around, I would not be standing here today.

In a matter of five days, those powerlines were gone, underground as they ought to be, particularly in areas where you are moving things like that around the yard. We have signs up—and thanks go to ETSA for printing those little signs—saying 'Please look up'. How many instances have we had like that? I lost a good friend who stood up on top of a stock crate, loading stock under a powerline, and he is no longer with us. However, that is digressing. With that one qualification about what is one site, I support the amendment.

Mr PEGLER: I have a question regarding a property where if, at the moment, there are two houses and one of those houses does not use a lot of power but it has the cells on it, there is a great advantage in that the power that is generated there returns to the owner of the property a lot more money than if the cells were on, say, the main house that uses the most power. I wonder if this amendment is going to affect those properties or not.

Mr WILLIAMS: Before I go to the question I want to point out that I only filed these amendments this morning because we only had them drafted yesterday. It is probably unfair to expect the minister to give a full response now. I am sure there will be opportunity to do that in the other place so I will not blame the minister if he is somewhat dismissive of the amendments at this stage. They will obviously go through the process in the other place and it will give the minister a bit more time to be fully briefed on these amendments. I meant to make that point clear earlier.

With regard to the question from the member for Mount Gambier (and I think a similar question was posed by the member for Schubert), the point of the amendment is to ensure that on a property where there are two meters—and essentially it was where there was a shed and a home and the owner was encouraged to put the cells on the shed because it was obviously going to capture more sunlight and be more effective—you could combine the meters.

Depending on the circumstances as to whether it was a house and a cottage, the member said that it was not really the intention that this would allow the combination of those two meters and, again, it would depend on the circumstances: if the house was lived in it would not make any difference because it would go over the 400 kilowatt hours per year threshold; if the house was used as a weekender it would go over that as well. It would only be if the cottage or the second house on the property was not being lived in and did not have any electricity consumption, did not have a fridge running it in or a freezer or something like that, that the question would even arise.

I must admit that in drafting this amendment it was not my intention to pick up that particular circumstance. It was a circumstance where there were two meters because of the historic context of there being two rates of power supplied generally for a farm business and you had two meters: one for the farm business and one for the domestic residence. Quite often the two meters were in the same meter box, as I said.

Sometimes, for convenience at the time of installation, they might be a couple of hundred metres apart, where the meter is physically in the shed. That is the anomaly that we are trying to cure. To be quite honest to the member for Mount Gambier, I have not been approached by anybody in circumstances where they had two houses on the property and they put the cells on one house which had not historically been utilising at least 400 kilowatt hours per year, so that was not my intent.

The Hon. A. KOUTSANTONIS: I have a great deal of sympathy for farmers in this situation. When my little girl was in hospital we became quite close friends with two other rural families (one from Broken Hill and one from the Mid North of the state) who had babies in a similar situation, and they had both encountered these same problems. I have a great deal of sympathy for them and I know firsthand some of the examples that members are talking about.

I have given undertakings to the Farmers Federation to personally take up a lot of these issues with ETSA. However, I will point something out to members, especially to the member for Schubert—probably one of the most comfortable members of this house. I say that generously—good luck to him, and so he should—he has worked very hard and deserves everything he has earned. I am in no way denigrating the member for Schubert; I have a great deal of respect for him.

However, this scheme was set up as a net scheme; that is, it was designed to be linked to your power bills. It is linked to household use of electricity. What that means is that you put the photovoltaic cells on the roof; it is linked to your power bills and it is there to offset the high cost of electricity and, if you generate more than use, you get a rebate which goes towards the infrastructure.

It is not designed as a profit-making instrument. I know that a lot of people say, 'Well, why not? We're doing the right thing by the community. We're not using fossil fuels. We're not emitting carbon into the atmosphere. Why can't we just put on these solar panels and get the full rebate?' It is because they are subsidised by your neighbours.

The member for MacKillop quite rightly says that a lot of these farmers have a historical incidence where there are two meters. I accept that. Absolutely, he is right. He is right that a lot of homesteads are built around very large shaded areas, because in rural communities air conditioning is a relatively new concept in the last 40 or 50 years, so they did their best to make do in a very hot landscape. They planted a lot of trees around the homesteads, so it is very difficult to get good sunlight for the photovoltaic cells.

When farmers did the right thing economically—because, let us face it, 44¢ per kilowatt hour is not bad; it is a very good return on investment—they put it in the place with the best aspect. That is in conflict with the intention of the bill. The bill was designed to allow residential users to offset their household consumption. What do we do in residential areas in metropolitan Adelaide where, through no fault of anyone's, they are not north facing, or you live in on one of the communities that the opposition represents where there are a lot more trees and there is a lot more shade over houses? What do we do in those cases?

Do we allow people to move them or centralise them in a park somewhere else to get a greater return? There are always going to be issues around photovoltaic cells, but while they involve subsidies from your neighbours—paradoxically, when the member for MacKillop is not in here arguing for greater subsidy to increase power costs on his neighbours: he is out there saying, 'Vote for me, because renewable energy increases your power costs, and cost of living is a big issue.' So, we have these two opposing arguments from the opposition: one saying that the poor old farmer cannot get the full subsidy and the other argument saying, 'You're paying more for your electricity because of photovoltaic cells.' Which one is it?

I say that with all due respect for the member for MacKillop, because he is actually trying to do the right thing by his constituents here, as there are some very unfair circumstances. However, I say to the member for MacKillop that the best way to go about that is not by changing a net system to a gross system. What that will mean is that people who have photovoltaic cells under the circumstances that he is talking about will go from a net system, where they get the difference back on their power bills, to a gross system, so it is just generating electricity and it is not linked to power consumption.

I know there are anomalies. I know that there are individual circumstances that are unfair, and I accept that. I am working with ETSA on a case-by-case basis to try to fix it. Let us face it: if your house is surrounded by trees, you live in a rural or remote community and you have put your cells on the shed 500 metres from the homestead, where you have two meters, it is unfair that you do not get the subsidy. I accept that, and we have to work with ETSA to try to remedy that, but this is not the solution. The member for MacKillop has very good intentions but a very blunt axe. This needs a scalpel.

In terms of what the member for Goyder talked about, where people in rural and remote communities have properties with large sheds and lots of equipment, and they want to use lighting, I understand that. It is a big security risk. I know in a lot of rural communities, especially where the partner works great distances away from the homestead and the house is near the road, people get quite concerned at night, and lighting can be a good thing or a bad thing.

I have a lot of sympathy for that argument. However, again, photovoltaic cells are not a security measure: they are a measure to try to help generate an industry to help reduce the impact of fossil fuels on our climate. So, what we did was to kickstart an industry. We initially only wanted the feed-in tariff to apply for five years. Members opposite moved amendments in the upper house to have the feed-in tariffs apply until the year 2028, I am advised, but they go out and argue that the feed-in tariffs increase power prices. So, you move the amendments to increase the period you can have for feed-in tariffs but then argue that renewable energy increases power costs.

I am dealing with the politics of energy, which is fine—the opposition is entitled to have its view on energy—and then I am dealing with mums and dads who have gone out and done the right thing and put photovoltaic cells on their roofs to take advantage, quite rightly, of a very generous scheme. And why wouldn't they? So they should. I do not begrudge anyone and I do not accuse any of them of pushing up our power prices. They have done the right thing by trying to limit their impact on the climate.

South Australia elected to implement the feed-in scheme on a net basis. That is, a consumer only received a feed-in tariff on its system regeneration after offsetting their household needs. There is another solution for regional communities; it is not this. I would ask regional communities for a little bit of patience.

I have given an undertaking to the Farmers Federation that they give me every single case that they have of people who have bought into the scheme before the cut-off and have had issues with ETSA. I have given them my word that I will undertake to deal with all those personally with ETSA. I am not saying that I can solve all of them, I am not saying there will be a happy answer to all of them, but I will do my best.

As for the member for MacKillop's solution, I give him credit that he is not expecting an answer today. My initial reaction is to oppose the amendments, but I will look at them between houses. I will give my undertaking to the committee that I will look at them between the houses, but it seems to completely disconnect the principle of linking this to household consumption.

The important thing about energy consumption, before it becomes a profit-making scheme, is that we link it to use. It is very important that we link it to use. I know what you are saying about the meters being separate—I understand that—but maybe a solution here is that the feed-in tariff is very generous, much more generous than people would get now. The cost of doing business is, perhaps, changing their meter. I am not sure of the exact cost of changing over the meter. I know it is substantial; they are not cheap.

Mr Griffiths: $600 for a three-phase and—

The Hon. A. KOUTSANTONIS: $600; so we are talking about someone who has put—and this is an estimate, so do not hold me to it—a five-kilowatt system with 20 panels on their house, and they would be making a fair bit of return.

Mr Griffiths: 20 panels is 3.8 kilowatts.

The Hon. A. KOUTSANTONIS: Depending on the size—

Mr Griffiths: Most of them are 190.

The Hon. A. KOUTSANTONIS: Yes, say you have 250, the premium solar panels. You have changed to 250 kilowatt solar panels with a five-kilowatt inverter. Unless you are running 15 plasma TVs nonstop and some sort of illegal activity involving hydroponics, I suspect you are not going to be using all of it, and you would be making a nice return, comfortable with paying off the returns. I would say that the $600 to change meters is not a bad investment to maintain the subsidy until 2028.

I know in your heart of hearts you probably think, 'Yeah, I probably would,' but maybe some people cannot afford it. So, I undertake to all members of the committee that if you have constituents who have invested in solar panels and bought an inverter and are having difficulties with ETSA, refer them to me and I will deal with ETSA on a case-by-case basis. I ask members not to support the amendment, but I will consider the amendments and enter into negotiations with the Deputy Leader of the Opposition between houses.

Mr WILLIAMS: I think I am having a bad morning. I told my colleagues that we would get through these bills in a matter of minutes this morning, and we have been here nearly an hour and a half. I apologise to my colleagues. Notwithstanding that, I want to do justice to this particular matter. I totally agree with the minister: I am saying that this feed-in scheme has driven up the price of electricity. That is irrefutable. I still make the point that this is about equity. This is about everybody who has gone out in good faith being treated identically. The minister has not refuted the comment I make, because he cannot, that the criteria with regard to the 400-kilowatt hour usage in the last year was established on 30 September last year, which was the last day. Many people had already committed themselves and, if they were going to go into establishing this, were obliged to commit themselves before they knew that criteria. So they went in in good faith.

The Hon. A. Koutsantonis: The government made it public well in advance of that.

Mr WILLIAMS: But you had not made the criteria. The minister says that the government made it public. Let me just come back to that, because there was one press release issued by the then premier on 31 October, the year before, 2010. If the minister wants a history lesson on this I can give it to him. When the feed-in scheme was started, the government announced that when we got to installed capacity of 10 megawatts there would be a review. That target was hit in May of 2009. The review was not announced until, I think it was, 29 or 30 October 2009. It was supposed to be concluded by the end of 2009.

The industry expected that it would be the subject of debate in the ensuing election campaign running up to 14 March 2010 but there was not one mention of it. The first mention of a response to that review was on 31 August 2010 and the premier, amongst other things, said, 'Yes, we will do something to stop people using the installation of solar panels as a money-making exercise,' and the press release, amongst other things, had a statement to that effect in it. The next thing that the installers and community knew about it was on 30 September when then minister O'Brien announced the criteria, which were established that day.

So, I do not accept the argument that the community was made aware of it. People were given, in my opinion, very little forewarning and they went out in good faith. This is where the problem has arisen, because I believe these people have gone out in good faith. I do not think they have gone out with the intention of ripping off the system. They have gone out in good faith, and this is why I have moved the amendment.

I think there were getting towards 100,000 applications across South Australia to install solar panels and I understand this probably impacts on less than 1,000, so we are talking about less than 1 per cent, or about 1 per cent. That is my understanding. So the impact is not going to be huge. The minister has already said he has given an undertaking that he will work one on one, and some of them I am sure he will get across the line. I suspect there will be a significant number that will not get across the line. I wonder what the actual impact would be on the whole scheme as far as the cost to other electricity users. I am making the assumption that it would be quite minimal. Given that people acted in good faith and on the best knowledge they could ascertain at the time, I think they deserve a break, to be quite honest, and that is what this is about.

Let me also make it quite clear that in the photovoltaic or solar panel industry, you have to have an understanding of how these machines work if you are going to make an argument about it being a net scheme or a gross scheme. Basically, my understanding is that if you have a solar panel sitting on your roof with the average pitch of a roof and the direction they are facing, the panels will give a fairly good output for four or five hours a day—that's about it—maybe from 1 o'clock in the afternoon to 4.30 or 5.30. Their efficiency drops off quite rapidly when the incidence of the sun's rays falling on them becomes acute. I did see one the other day on a large tracking frame that tracks the sun. This was a farmer who has obviously got it all right, and I am sure his panels work at maximum efficiency for most of the daylight hours. However, he is still subject to the cap that I mentioned earlier—he can only be paid the feed-in tariff on 45 kilowatt hours per day—so that captures him.

I would argue that the reality is that, in the average household, during the time of the day when the cells are producing electricity there is very little activity in the house. As we know, a significant number of houses these days have both people living in a two-person household working in the workforce and maybe the only thing that happens during the day is that the fridge or the freezer might cycle in for short periods.

In effect, most of the electricity that is generated by a large number of the solar panels that are on people's roofs is fed straight back into the grid. Their electricity usage is at a different time of the day—by and large, it is after 5.30 in the evening. When you look at the graph of our demand curve of electricity usage in South Australia, you very quickly pick up that the demand goes up dramatically late in the afternoon as people come home from work.

The reality is that very, very many of the installations of rooftop solar panels that have met all the criteria are basically working in a gross feed-in way. I suspect that a number of people might even slip down to the shed and switch the beer fridge off during the day and only run it at night-time.

The Hon. A. Koutsantonis: You can't do that!

Mr WILLIAMS: What do you mean you can't do that—

The Hon. A. Koutsantonis: It's the beer fridge!

Mr WILLIAMS: —if you're not going to it every five minutes? I am sure people out there are doing things to minimise the amount of energy their house uses during that afternoon period when their solar panels are most actively generating electricity. I do not buy the argument that the individuals who would be helped by this amendment in some way have a gross feed-in tariff whereas everybody else is doing the right thing and operating in a net system.

I do not want to hold up the house any longer on this. I have put the position, the minister has put his position, and I am sure it will be debated similarly in the other place; the minister has given an undertaking that he will consider the matter between here and the other place. This is a real problem, as I and my colleagues on this side of the house have pointed out and as the minister has acknowledged.

Mr GRIFFITHS: I want to ask a question for an update, not to debate anything. As part of the briefings we had prior to the end of June when the legislation was being debated, I have a very clear recollection that some 93 per cent of households in South Australia did not have photovoltaic cells. My colleague the member for Hammond and I have talked about how, as we drive around, our perception is that a lot more than 7 per cent of consumers now have photovoltaic cells. Is the minister able to update the house on what level of take-up there has been amongst consumers?

The Hon. A. KOUTSANTONIS: I can get you an exact number, but on recollection—and I do not want you to move any motion that I misled the parliament—I think it is about 113,000 households. I will get back to the house with an exact number, but I saw a figure of 97,000 households. There are 97,000 households installed, I am advised, and I am advised that there are 113,000 who have the inverters or have approvals—I am advised, which is subject to change.

Mr WILLIAMS: To help my colleague the member for Goyder, my understanding is that there are about 700,000 electricity customers in South Australia, so I am sure the member for Goyder can do the maths.

Mr GRIFFITHS: I guess 15 per cent, so we are getting pretty close, aren't we?

The Hon. A. KOUTSANTONIS: I want to read out a standing order before we vote on this:

No Member to vote if personally interested—

This is standing order 170—

A Member may not vote in any division on a question in which the Member has a direct pecuniary interest, and the vote of the Member who has such an interest is disallowed.

Rule 303!

Mr VENNING: I seek to make a personal explanation in relation to this matter. This motion moved by the member for MacKillop does not affect me in any way whatsoever because we are on one meter. The whole thing was changed when we put it in there. It is all through one meter, so it makes no difference whatsoever.

The ACTING CHAIR (Ms Thompson): Not having examined the electricity accounts of every member, I ask members to note the standing orders.

New clause negatived.

New clause 13B.

Mr WILLIAMS: I move:

Page 6, before line 23—Insert:

13B—Amendment of section 36AE—Feeding electricity into networks—requirements on holder of licence authorising operation of distribution network

Section 36AE(6)(a)—after 'electricity' insert:

, unless the alteration was approved before 1 October 2011 by the holder of the licence authorising the operation of a distribution network to which the generator is connected

This is to overcome another small anomaly that has arisen. I will briefly explain it. I hope we will not take as long as we did on the previous matter. We have another set of circumstances where there was a cut-off date on 30 September to get approval to install a PV system to qualify under the feed-in tariff.

We have two sets of people who were able to apply for PV installations prior to that date. One set was somebody applying for a new system. So I could have come along on 30 September last year and applied to install a five-kilowatt system on my house. I would have got the approval and then, under the legislation, I would then have to fulfil that approved application in a certain time frame and a certain way.

I applied to install a certain size inverter. The inverter is the piece of machinery between the solar panels and the grid which changes the direct current (DC) which is created by the solar panels into an alternating current and feeds it into the grid. The key point about the inverter is that you get different sized inverters depending on how many solar panels you want to put on your roof, how much you want to invest and how much electricity you want to generate. The approval was for the inverter. So, I might have got an approval for a five-kilowatt inverter, had that installed, had it ticked off and only put two kilowatts worth of panels on my roof. I could have then come along six months later, reinvested and put some more panels on the roof and then months later (and it might not have been for a number of years) I got to the point where I had the capacity of solar panels on my roof to match the capacity of my inverter.

Basically, what I could have done is bought the inverter, bought the part of the capacity of that inverter in panels and made that level of investment and then each few months (or each set of six months or 12 months) built up my array of solar panels until I got to the capacity of the inverter. No problems. You can do that quite legitimately and be paid the feed-in tariff at the end of that process on the amount of electricity that I feed in to the grid up to 45 kilowatt hours per day.

The other person may well have been an early mover. They might have been the person who invested a significant amount of money way back in 2008 because they had a genuine desire to do something about the impact of electricity generation on our planet and they might have put in a one-kilowatt system. As the price of the systems came down and as the price of electricity came up, they may well have been convinced that they needed to put in a larger system. So, on 30 September, that person may well have gone in and received an approval to increase the capacity of their system from one kilowatt to five kilowatts.

This is where it starts to get complicated. Because there is another section in the act that provides that you cannot alter your system to increase its generating capacity after 1 October 2011, that person who had got an approval to increase the size of their system actually had to have all of the work done before 1 October. So, the early mover who decided to increase the capacity of his system is treated completely differently from the person who comes along and gets their approval on the last day. It is an anomaly, it is a nonsense and, again, it has caught people out.

I indeed have several examples of the second category who were caught out because they had every intention of meeting the deadlines but, for one reason or another, their supplier and/or ETSA (I think it was their supplier, not ETSA; I should not blame ETSA for this) did not meet the appointment to fulfil the upgrade of the system by the date that it had been agreed, and they have fallen off the system. I have one constituent who has been told that, at the very best, she might be left on the system and receive the feed-in tariff if she goes out and takes the panels off the roof and goes back to the size system she originally was approved for, notwithstanding that she had an approval before the due date to increase the size of the system.

It is a small anomaly. The second amendment would add that section 36AE(6)(a). The first part of it says that, if you do any work after 1 October to increase your generating capacity, you fall off the feed-in tariff system. I would like to add, via an amendment, the following words:

...unless the alteration was approved before 1 October 2011 by the holder of the licence authorising the operation of a distribution network to which the generator is connected...

What it would mean is that those people who made the decision to increase the size of their system are treated exactly the same as those people who came in and just made a decision to put in a system and get approval, both of them on or before 30 September last year. There is one little point which has now escaped my mind, but it is essentially so that these people are treated exactly the same as those who were installing a new system and, as I said, there are a number of people.

I have talked about some of the numbers of people who I thought were impacted by the earlier amendment or may be impacted by that scenario. I suspect that this scenario would affect very few people. I have had a few calls about it, probably fewer than 10. I do not know; I would be guessing, but I do not think there are hundreds, but there could be possibly up to 100 people across the state who are caught up by this.

Again, it is about equity; it is about treating people the same. Again, I accept the minister's point. I think the system is costly. I think the system is a bad piece of public policy—I have said that publicly many times—and it adds to the cost of householders' electricity bills. That is no reason not to make it such that the system is equitable and treats everybody fairly.

The Hon. A. KOUTSANTONIS: The government moved amendments (I do not have the exact date) that provided:

If the generator is, on or after 1 October 2011—

(a) altered in the 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.

It is clear. The member for MacKillop is a politician, and politicians are allowed to make points to try to get votes, and I understand that. I understand that perfectly, probably more than he does; hence why we are here and you are there—and I mean that in terms of the popular vote. What you are out there saying publicly is: this renewable energy stuff that Mike Rann and Jay Weatherill are pushing on you pushes up your power prices.

The Deputy Leader of the Opposition has come up with a new wind policy that is about giving people the right of veto over wind developments within a certain distance of their property. Every time there is a study done on electricity prices in South Australia, he is out there arguing that the reason your power prices are going up is because of carbon tax and this climate change stuff and that the lefty loonies in the Labor Party are putting up all these alternative schemes to combat carbon, which personally I think he does not really believe is a pollutant, but I will take him on his word that he thinks it is. Yet, he comes in here and says, 'By the way, you know how I was out there in the public saying that solar rebates, wind power, geothermal and all these renewable energies increase your power costs, I want to open that up to more people.'

Mr Williams interjecting:

The Hon. A. KOUTSANTONIS: Then why does the member go out publicly and say that these things increase electricity prices and then come in here with amendments to allow more people to get the subsidy which, according to him, is increasing power prices? There is a definition for this. It starts with an H. It is a Greek word. It is 'hypocrisy'. If you are talking about equity, you would be supporting a price on carbon that delivers compensation to people on an equitable basis. If you are talking about equity, you would be supporting more means testing, but you do not. What the member for MacKillop wants to do is ensure that those people in this scheme who are already getting a benefit cannot increase their benefit, which he claims is adding to the cost of electricity prices for people who do not have photovoltaic cells.

It was clear: these were the rules. The member for MacKillop does not want anyone new getting the 44¢. He says that will increase our power prices, and he does not believe in that. What he says is that if you already have the 44¢ and you have a five-kilowatt inverter that was approved, then he wants you to be able to increase your capacity. So, if I take his argument to its logical end, he is happy, according to him, to increase power prices on the neighbours to subsidise that increase in capacity, but he will go on Leon Byner's show and Matthew Abraham and David Bevan's show and say, 'These photovoltaic cells are the spawn of Satan, they are increasing prices, climate change is rubbish and the carbon tax is going to end the world.'

Quite frankly, I know what he is doing. He is trying to speak to two constituencies at once. It is not going to work. I will expose you. I prefer it when the Liberal Party is pure. They believe in private capital, we believe government plays a role. They do not believe in subsidy, we believe in co-investment. I prefer it when they are pure. This mixture of all things to all people according to the audience does not work. You will be found out.

Here is my tip for the day, Koutsy's tip for the day: be pure in your message. If you think renewable energy increases the cost of electricity for ordinary South Australians who do not have access to the subsidy then perhaps you should not want to increase the amount of subsidy going out. If you do not think it increases the cost then stop saying so and back it up. My dad always said to me, 'Believe what a man does, not what he says.' The member says that solar energy, wind energy, geothermal and renewable energies increase the cost of power, yet he is here in parliament today increasing the subsidy for more people. So, I will believe what you do, not what you say.

Mr WILLIAMS: I suggest the minister go back and read what I said in proposing this amendment and get a good briefing. I also recommend he reads my contribution in the Hansard going right back to, I think, late 2007 when we first started debating feed-in tariffs. I think I have been fairly constant, saying that I was very sceptical about the whole scheme and I thought that it was being promoted for the wrong reasons and it was going to be costly. I think I have been fairly consistent in saying that.

I said a few minutes ago that that does not mean that we should have a system which is not only bad but is also unfair. I think the minister failed to understand the point I was making.

The Hon. A. Koutsantonis: No, I understand the point.

Mr WILLIAMS: No. Minister, if I got approval to put in a five-kilowatt system on 30 September last year, I could have had my inverter installed and put one kilowatt of panels on it. I could go out next week and put another kilowatt of panels on it and I could go out next year and put another kilowatt on until I got to five.

The Hon. A. Koutsantonis: Until you couldn't.

Mr WILLIAMS: Until I got to five.

The Hon. A. Koutsantonis: Yes, that's right.

Mr WILLIAMS: Right; nothing to stop me. But if I installed a one-kilowatt system and then got the approval to upgrade that to five kilowatts on or before 30 September last year, I am treated completely differently. I had to have installed those panels by 1 October. So, I am treated differently, and this is the anomaly. You have created two classes of people, and the people who you are really kicking in the guts with this are the people who have decided to invest more because they were the early movers when the things were really expensive. They were the genuine people. They were the early movers who went and put their system in way back in 2008 and 2009 when they were really expensive. When the price came down, they said, 'We can afford to upgrade.' All these other people who have come in late on the scheme and who have taken advantage of the scheme to make money out of it, as opposed to genuinely wanting to do something for the planet, went out and put in the largest schemes they could possibly put in—maybe a five-kilowatt system—but when those early movers, the genuine people, sought to increase the size of theirs, they got caught out and they are treated differently.

All I am trying to do, minister, is make your scheme, which is a bad scheme, not quite so bad. It has always been a bad scheme, minister. It has always been bringing an additional cost to the average electricity consumer in South Australia. It is the highest cost carbon abatement scheme you could ever come up with. It is the highest cost technology that you could utilise to abate carbon. It does nothing to reduce the cost that we see on people's electricity bills attributed to the cost of maintaining and upgrading our distribution networks. It is a scheme that has delivered very, very little benefit—in fact, I would argue, no benefit—to South Australia, but it has come at a great cost.

That does not mean that I accept that it should also be unfair. It is also unfair on the level that it treats people differently. It treats those who were early movers, and then decided to upgrade their system a little bit, differently from the late movers who decided to come in and make a profit. Minister, I urge you to go back to your ministerial office, talk to your advisers, get somebody in your office to read the Hansard and read the argument that I have put and then reflect on what I have said because I think your contribution a moment ago completely misinterprets what I have said.

You have created two classes of people and you are treating one of them unfairly, in my opinion. I would like that the committee agrees with me rather than you and I am sure the other place will. Anyway, minister, as I said a while ago, I do not want to hold up the committee. We have both put the position. You have the numbers here. I am fully aware of that and you alluded to that moment ago. As I said, I have brought this on fairly late in the period and I acknowledge that you have not had the opportunity to be fully briefed on these couple of matters. I have put them here so that, certainly by the time they get to the other place, there will be a full understanding of the implications of the matter.

New clause negatived.

Remaining clauses (14 to 38) and title passed.

Bill reported without amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Manufacturing, Innovation and Trade, Minister for Mineral Resources and Energy, Minister for Small Business) (12:51): I move:

That this bill be now read a third time.

Bill read a third time and passed.