STATUTES AMENDMENT (NATIONAL ENERGY RETAIL LAW IMPLEMENTATION) BILL

Conference

Consideration in committee of the recommendations of the conference.

(Continued from 27 November 2012.)

The Hon. A. KOUTSANTONIS: I move:

That the recommendations of the conference be agreed to.

I will begin by thanking the representatives of this house who participated in the conference for their constructive involvement. Honourable members would be aware that the resolution of these amendments paves the way for the commencement of the National Energy Customer Framework in South Australia. The framework introduces a robust national law to protect consumers' access to electricity and gas, and will improve the energy market for the benefit of energy consumers and suppliers.

Members will be aware that the government initially opposed the amendments of the Legislative Council moved by the opposition, as they would have the impact of increasing power prices for every South Australian. We are, however, strongly committed to providing South Australian customers with early access to the benefits of the National Energy Customer Framework and have therefore decided to support the amendments put forward by the opposition and the Greens in the interest of moving this important national legislation forward.

Once the framework commences, all retailers in the national market will be able to offer South Australian customers with competitive offers. Customers' participation in this competitive market will be assisted by the introduction of national protections to ensure they have continued access to essential energy services on reasonable terms. The government is also particularly committed to ensuring that vulnerable customers have the ability to access the hardship regimes included in the National Energy Customer Framework as soon as possible.

It is in this form and in this context that I can report that the conference representatives agreed to amendment No. 1 of the Legislative Council, which seeks to alter the definition of an 'excluded generator' in the Electricity Act 1996. The amendment requires that there are two or more meters measuring consumption on a site. SA Power Networks (SAPs) must take into account the electricity consumption on the site as a whole when enforcing the provision, excluding solar systems. Information supplied to the conference participants by SA Power Networks indicated that there are less than 107 customers who have been excluded from the feed-in scheme who may, as a result of this amendment, have the ability to redeem their eligibility for the 44¢ per kilowatt hour feed-in tariff.

In relation to amendment No. 2 from the Legislative Council, I can advise that the conference representatives have agreed to a compromise. Amendment No. 2 sought to permit solar customers who received approval from SA Power Networks for an upgrade prior to 1 October 2011 to carry out the upgrade at any time and retain eligibility for the 44¢ per kilowatt hour feed-in tariff.

Honourable members, the compromise amendment that I table today provides that solar customers who received approval from SA Power Networks for an upgrade prior to 1 October 2011, and chose to complete that upgrade by 1 October 2013 will be eligible to receive the 16¢ per kilowatt feed-in tariff for the whole of their solar system until 30 September 2016. The compromise ensures that customers with an approval for an upgrade are able to make an assessment as to whether it is worthwhile to complete the upgrade and receive a feed-in tariff as a category 2 customer, compared with retaining their category 1 status on a smaller system, and represents a significantly lower cost option to the amendment from the Legislative Council.

Conference representatives are also concerned that nine customers with eligibility for the 44¢ per kilowatt hour feed-in tariff sought in good faith to upgrade their solar system but, due to matters outside their control, completed their upgrade a short time after the cut-off date of 30 September 2011. The government has committed to ensure that SA Power Networks implement an administrative solution to ensure that these nine customers retain eligibility for the 44¢ per kilowatt hour feed-in tariff for the whole of their solar system.

I want to give credit to the member for MacKillop. This was his idea. He used his influence within the Liberal Party and the parliament to have this success for these customers—congratulations to him. I thank all those members who contributed to the debate and I look forward to seeing the benefits that this legislation will have for household energy consumers.

I will finish by saying this: what occurred during this debate was perfectly legitimate in terms of the amendments moved by the opposition and the Greens. I do not begrudge them the ability to do that, but what did happen, as a consequence, was that important national reforms were stalled because members opposite and the Greens used a government bill to seek amendments for issues that concern them, and that is fine. The result is higher power prices.

Members interjecting:

The Hon. A. KOUTSANTONIS: Well, it is. It is directly your fault; you moved the amendments.

Ms Chapman interjecting:

The Hon. A. KOUTSANTONIS: The member for Bragg scoffs, but she sits in this parliament knowing full well the implications of her vote and, if she does not, then I am not quite sure what she is doing here. You can scoff all you like. Scoffing does not change your vote. Scoffing does not change the outcome.

The government has accepted the amendments and accepted the hard work of the member for MacKillop and his drive to seek justice for his constituents. I congratulate him for it, he has used his position well, as long as we know that the outcome of these amendments—and the member for MacKillop will argue otherwise—is higher power prices. It is indisputable. Liberal amendments, with the Greens, will result in higher power prices.

This national reform is very, very important and the government needed to pass it. I will also point out that, at the standing committee of energy and resources ministers, on which I am one of three Labor ministers—the rest are conservative ministers—they were very, very surprised that my honourable friend would team up with the Greens to move amendments. I suppose, Mitch, from where you are sitting, you have not got very many friends, so you have got to grab on to whoever you can. Good luck to you; you did it very, very well.

But this is important legislation. I think the point I want to make to the house is that, before the debate even began, the opposition spokesperson and I agreed on the outcome of the bill. What we disagreed on were the amendments and that is the problem with this process. These important reforms, which the member for MacKillop and I both agree are important for the people of this state and for the national electricity market, were caught up in delays based on events that happened in the past. I think that is unfortunate, but he had every right to do what he did. I do not begrudge him doing it and congratulations to him.

The CHAIR: Member for MacKillop, do you wish to say something?

Mr WILLIAMS: I feel obliged, thank you, Mr Chairman, to make a few comments.

The CHAIR: I thought you might say that.

Mr WILLIAMS: Can I say that I wholeheartedly agree with most of what the minister has just said. I certainly do not agree with his comment suggesting that these amendments are having an impact on power prices in any significant way whatsoever. However, I do agree with the minister's comments about the majority of the bill, which introduces the National Energy Customer Framework, the NECF legislation. It is a part of ongoing legislative reform which has given us a national electricity market.

This reform has been ongoing for over 10 years now. It began back in the mid to late 1990s. I think it began shortly after I entered this place, so that is a fair while ago. The reforms have been significant. The minister mentioned that in the last few years power prices have become a pretty hot topic because of their rapid increase. Interestingly—I will take the opportunity—I was looking at some figures which compared power prices across jurisdictions in Australia starting with the base at 1990 up until today's prices. These figures are straight out of the federal government's recently released white paper.

The power price increases from 1990 to, I think, the latest figure was 30 June this year have been almost identical in New South Wales, where the electricity assets are still retained in public ownership, as they have been in South Australia, where the electricity assets were sold off some years ago. The data in the federal minister's white paper puts the lie to this nonsense that there has been a cost impact, or cost impost, by the privatisation of our electricity assets here in South Australia.

Having said that, there is much public disquiet about what is happening with electricity prices. The National Energy Customer Framework will give some benefits to customers, hopefully, but, in reality, we are still facing rising power prices in Australia, and I do not see that stopping overnight because of this legislation. Hopefully, it will give some benefits to customers, but there are a number of factors causing an increase in power prices.

I turn to the amendments that the government has acceded to, which were moved successfully in the other place. There were basically two amendments, and they were to correct some anomalies that had arisen with regard to our feed-in tariff scheme in South Australia and the way that the legislation was impacting on a very small number of households—a very small number. The minister has said himself that the first amendment impacted on, I think he used the word, less than 107 customers, and the second amendment, I believe, has the potential to impact on nine customers; so we are talking about 115, 116 customers or less. The minister is suggesting that by delivering fairness to about 115 customers we are going to have an impact on power prices in some discernible way here in South Australia, when something like in excess of 100,000 customers have taken advantage of the government's feed-in tariff scheme.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: It was your government that introduced it. I have been sceptical of it all the way through, minister. Go back and read the Hansard. The reality is that the feed-in tariff in South Australia is impacting, in this year alone, on the average household customer to the tune of about $110, according to ESCOSA. That is a significant cost impost on the average electricity consumer in South Australia, wholly and solely attributable to the feed-in tariff scheme.

The feed-in tariff scheme was an ill-conceived policy. I said from day one that it was about a headline so the then premier could brag at the February 2008 Solar Cities Conference, held here in Adelaide, that his government was the first government in Australia to introduce a feed-in tariff. That is what it was all about. Once the headline had been achieved by the then premier, the government and successive ministers took their eye off the ball and, instead of reaching a target, and I think the government in the initial stages was talking about achieving 50 or 60 megawatts of installed capacity, we have ended up with a scheme where there are 100,000-plus participants and installed capacity of more like 260 megawatts.

The scheme got completely out of control, notwithstanding the review of the scheme that made recommendations to the government. The government got that review, I understand, some time late in 2009, if not very early in 2010, before the 2010 election. The recommendation of that review was that the scheme should have a shutdown provision like the Victorian government had. One of the triggers in the Victorian scheme was when the cost to the average consumer reached $10 the scheme should be shut down. I have just told the house that the average cost to consumers in South Australia is about $110.

When the minister talks about increasing costs to electricity customers through amendments to the feed-in tariff, he should take on board that it was his government that allowed the scheme in South Australia to get totally out of hand and impose a cost of at least $100 more than what happened in Victoria, and even under a Labor government there they managed to keep on top of the scheme and ensure that it did not do what has happened in South Australia.

Of the two amendments that the government has decided to accept, one impacted particularly on farmers where they had contracted to have a rooftop solar panel system, a generator, installed and the installers came out and said, 'There is no point putting that on your farmhouse because it is surrounded by large trees which shade the roof and the system will not be very effective. Let's put it on the shed.' The reality is that quite often the shed is on a separate meter.

On the very last day of the scheme, 30 September 2011, the government trotted off down to ETSA and told ETSA what the eligibility criteria would be. The government kept arguing that it was ETSA that came up with the criteria but my information (and I believe I am very well informed on this) is that the government said what the eligibility criteria were and ETSA had to accept that, and that made a number of electricity customers who, in good faith, had installed systems ineligible.

The government set an eligibility criteria that a certain amount of electricity had to be used through the meter in the last year and in some cases that had not been used. I am not sure but it was probably a couple of hundred installations that became ineligible. Some were able to correct their ineligibility problem by combining the two meters—by physically connecting through—because quite often the two meters were in the same meter box.

We found that there were a little over 100, possibly 107, customers who found it impossible, without incurring an additional substantial cost, to hook up the solar panel system of generator to their domestic or household meter. Because the numbers were so small and the cost impacts so minimal, the simple solution that I came up with and had parliamentary counsel draft an amendment for, was to simply combine the usage from the two meters on the property in order to determine the eligibility. I am delighted that after significant negotiation—and I did not keep count of the number of meetings that were held in deadlock—eventually the minister saw the error of his ways and agreed to accept the amendment.

The second amendment, as I said a few minutes ago, related to a much smaller group of people, possibly nine, who again, in very good faith, had contracted with a supplier to upgrade an existing solar panel generator. The rules were somewhat different for people upgrading. The rules for a new system allowed until 30 September 2011 for the application to be made and accepted for installation of a system and then gave a 120-day window to arrange for what was then ETSA Utilities (now SA Power Networks) to come and install the import/export meter. It did not have to be installed in that 120 days but certainly an appointment had to be made for it to be done and then there was a further window for the completion of the system. Those who were upgrading did not get the benefit of that opportunity after the close-off date of 30 September. They had to have their upgrade completed by 30 September.

There were a small number of people in the state—we believe, possibly nine—who in good faith had set out to meet the eligibility criteria but were unable to do so due to circumstances well beyond their control. I can cite one example from my electorate where the installer did not come for a week or two after the close-off date simply because the weather was inclement and the installer travelled from Adelaide down to the South-East to do the installation. He was not prepared to send his team down there to do the work whilst the weather was inclement because he thought they would be hanging around for days and days waiting for an opportunity to do the installation.

I suspect there are a number of cases where similar circumstances occurred but there are only, I suspect, a very small number of cases where this actually became known to ETSA Utilities, who then made those customers ineligible. In the case that I have cited in my electorate, the unfortunate householder 'fessed up to ETSA Utilities, when contacted by them, that the work was not done for about a fortnight after the close-off date, and they were made ineligible. I thought that was totally unfair especially when I am absolutely certain that there are other people who found themselves in the same circumstances but probably allowed themselves, if they were ever asked the question, to tell a small white lie and got away with it. The second amendment was aimed at solving that problem.

The minister did point out in the second or third meeting in deadlock that, in fact, the way the amendment was worded opened up a huge opportunity for people. I was unaware at the time of moving the original amendment that there were well over 1,000—possibly a couple of thousand, I think—customers who had put in an application to upgrade their system but had not actually gone through with the work and the amendment would have allowed them until the end of the scheme, many years hence, to upgrade at any time and still become participants in the scheme.

That was never my intention. It was never the intention of those in the other place who supported the opposition's amendment, so we came to an agreement to change the amendment, and that is what the government has put as a compromise. The nine customers who have been identified will be satisfied through an administrative instrument. The opposition, Independents and minor parties who supported the opposition in the other place have agreed to accept the minister's undertaking that that will be sorted out for that very small number of customers. I am delighted that, at the end of the day, the government has accepted those two amendments. It fixes up what was otherwise, I believe, a very glaring problem within the feed-in tariff scheme.

I am delighted that the legislation to allow for the National Energy Customer Framework to progress will now have its passage secured through the parliament. I do not think that we have actually held up the implementation. It is my understanding that it was always proposed to start in South Australia on 1 January. I understand that some other states are not starting until at least 1 July next, and the minister may, indeed, not start the scheme in South Australia until that date. I am unaware of that.

However, I can tell the minister that at the last conversation I had with his federal colleague (Martin Ferguson) I assured him that unless the minister failed to come to his senses he would have it by 1 January, or have the ability to have it implemented by 1 January. So I am delighted that the minister has Adelaide City Council accepted our amendments and I am able to keep faith with his federal colleague Martin Ferguson and that the minister will be in a position to implement it in South Australia by 1 January.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: Beautiful. I am delighted that the opposition was able to—and I can use the word—'force' the government to accept these amendments because I think they are the right thing to do. It has a miniscule impact, I believe—it is probably an undetectable impact on electricity prices, certainly relative to the impact that was caused by the government's what I can only describe as incompetence over recent years in managing the way the scheme has been implemented. However, I am delighted that we have come to this position and the government has accepted these very sensible amendments.

Motion carried.