Electricity Prices

Mr MARSHALL (Dunstan—Leader of the Opposition) (14:28): I like how you slowed down to add that emphasis, sir; it gives a real gravity to the situation.

The SPEAKER: A bit like Rick McIntosh's race calling.

Mr MARSHALL: I am not familiar with that body of work. My question is to the Minister for Mineral Resources and Energy. Is the minister aware that the AER has forecast that over the next three years, contract electricity prices will be a whopping 32 per cent higher in South Australia than the national average, and what is the minister doing about it?

The SPEAKER: I suppose 'whopping' could be seen as a comment. Treasurer.

Mr Marshall: How would you describe it, sir? Gargantuan?

The SPEAKER: Treasurer.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:28): Thank you very much, Mr Speaker. The Australian Energy Regulator, as part of its market monitoring and enforcement, publishes a weekly report on the operation of the NEM, which includes a graph and forward prices for energy in each of the regions.

In 2014-15, about 8.8 terawatt hours were contracted throughout the entire National Electricity Market. The forward contracts that the Leader of the Opposition is talking about in South Australia make up 2 per cent of that entire 8.8 terawatt hours.

Mr Marshall: Just answer the question. Are you aware that they are higher, and what are you doing about it?

The Hon. A. KOUTSANTONIS: I am answering that question. I know you don't understand it—I know he does not understand it, so I will explain it to him slowly.

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: This is exactly what—

Mr Marshall: You didn't answer the last question because you've got no answers.

The Hon. A. KOUTSANTONIS: Oh dear. The Leader of the Opposition is talking about the AER's—

Members interjecting:

The SPEAKER: The member for Mitchell is warned.

The Hon. A. KOUTSANTONIS: The Leader of the Opposition is talking about the AER's contracted prices. I am talking about how many of those are done nationally every year: it's about 8.8 per cent.

Mr Marshall: The question is about the contract price.

The Hon. A. KOUTSANTONIS: Exactly—I am getting to it.

Mr Marshall: Are you aware or not, and what are you doing about it?

The Hon. A. KOUTSANTONIS: I think the desperation in the voice of the Leader of the Opposition is telling because while I am trying to answer his question he is just yelling out, blowing Botox all over the carpet. It is looking refreshed, but it's not what it's there for.

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: I am trying to answer, but you just keep on yelling. Yelling doesn't make it any better, Steven. Yelling doesn't make it any better. Let me answer the question.

The SPEAKER: The Treasurer is warned for provoking the Leader of the Opposition, who hardly needed any provocation and was already carrying on.

The Hon. A. KOUTSANTONIS: Thank you, sir. I see the fluorescent vest is on again today.

The SPEAKER: Yes, and the fluorescent shoes as well.

The Hon. A. KOUTSANTONIS: Excellent, good, sir. So on average, of those contracts the Leader of the Opposition is talking about, I am advised that 2 per cent of all those contracts signed every year are within South Australia. That means a vast majority of the South Australians who are contracted don’t sign up to the prices the Leader of the Opposition is talking about. They have long-term hedged contracts.

The forward price of the Australian electricity futures market is highly volatile and very hard to predict. In fact, it is very rare indeed that those prices that are predicted in the forwards market are actually ever met; indeed, they always generally come in under. If you are looking at the average demand in South Australia in any one day, it is about 1,500 megawatts per day, and on a peak demand, say, in summer, it goes up to about 3,000.

The contracts the Leader of the Opposition is talking about make up, on average, in 2014, about three megawatts for a day. They are the contracts that he is talking about.

Mr Marshall: Just answer the question.

The Hon. A. KOUTSANTONIS: I am answering the question. Most South Australians are not exposed to the prices he is talking about. What he is attempting to do is to say to everyone in South Australia—

Members interjecting:

The SPEAKER: The leader is warned for the second and final time, and the member for Morialta is warned.

The Hon. A. KOUTSANTONIS: The truth is that most residential customers and most business customers are not exposed to the volatility in the wholesale market. They have signed forward contracts. Those companies have hedged against these volatile prices. They are not paying them. What he is talking about is a very small section of the market that most people are not exposed to, but he doesn’t understand that, probably because his dad did all the purchasing of the power prices.

Mr Marshall interjecting:

The SPEAKER: The member for Wright.

Members interjecting:

The SPEAKER: The leader will shortly be out and the Treasurer is warned for the second and final time.

An honourable member: That’s three, sir.

The SPEAKER: Yes, I know how many it is. I give the deputy leader many lives before she goes.