Project EnergyConnect

Mr MALINAUSKAS (Croydon—Leader of the Opposition) (14:06): My question is to the Minister for Energy. Can the minister explain to the house how the government's energy policy of supporting Project EnergyConnect will be funded and built as promised at the last election? With your leave and that of the house, I will explain.

Members interjecting:

The SPEAKER: Order, members on my right!

The Hon. S.S. Marshall interjecting:

The SPEAKER: Order! The Premier will cease interjecting. Leave is sought; is leave granted?

Leave granted.

Mr MALINAUSKAS: At the last election, the Premier claimed an interconnector to New South Wales would be constructed at a cost of $500 million, only for that cost to blow out to $1.5 billion and now again to $2.4 billion. Today, without an AEMC rule change, the project will attract a junk credit rating, as stated by the proponents, TransGrid.

Members interjecting:

The SPEAKER: Order!

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The member for West Torrens is warned for a second time.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:07): The Leader of the Opposition would not have asked that question if he actually understood how it worked. He would not have asked that question if he understood how it worked.

Members interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: Let me just go to the end of the explanation that came after the question and deal with that bit first, and then I will come back and give a full explanation of how it actually works. The AEMC has not said anything like the Leader of the Opposition just said.

The Hon. A. Koutsantonis: TransGrid have.

The SPEAKER: Order, member for West Torrens! The minister has the call.

The Hon. D.C. VAN HOLST PELLEKAAN: I reckon the member for West Torrens would understand as well as anybody else in this house that when TransGrid is putting forward an application to say, 'Can you give us more money if and when we build this thing?' they are very likely to have that supported by comments that say, 'It's not going to be good if you don't give us more money.' As I said in my last answer, they are hardly going to say, 'We need more money than the standard rate of return—and if you say no, we'll build it anyway.' They are hardly going to say that, are they?

Members interjecting:

The SPEAKER: Order, members on my left!

The Hon. D.C. VAN HOLST PELLEKAAN: So keep in mind that what the Leader of the Opposition said came from TransGrid. It did not come from the AEMC.

Mr Malinauskas: Which is what I said.

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: I just asked you to keep it in mind. I didn't say you said it differently. I said to just keep it in mind.

The SPEAKER: The minister will not respond to interjections. The minister has the call.

The Hon. V.A. Chapman interjecting:

The Hon. D.C. VAN HOLST PELLEKAAN: It would be dreadful if the two shadow ministers earlier this week did better than the Leader of the Opposition! Anyway, sorry, Mr Speaker, back to the question.

What has it cost taxpayers? We have dealt with this before. The cost of this project is going up, but the net benefit to electricity consumers is also going up. When the project was estimated to cost $1.5 billion, it was estimated that there would be a $69 net benefit to South Australian consumers. Now that the project is estimated to cost $2.4 billion, it is actually estimated that the net benefit to South Australian consumers is going to be $100 per year for the average household.

Just to dig a little bit deeper into this for the Leader of the Opposition, the way it works is that the AER—if it sees fit, and it is working through that process, gives regulatory asset status to the project, which means that the two proponents, one on either side of the border—are given permission to build the project, and they are also given permission to recover the cost over the next decades. What is most important is that the benefit to consumers of reduced electricity prices far outweighs the cost recovered for the project.

In this case, at the most recent update a few months ago, the benefit to consumers was going to be $110. The cost to consumers was going to be $10. The net benefit to consumers after the regulatory return process is calculated is $100 extra per year for the average South Australian household on their electricity bills, without a household laying out 1¢ in advance to have the thing built. That's how it works, so any question that has to do with, what is the cost to South Australians of this project, needs to understand that.