Ministerial Statement

ESCOSA Inquiry into Electricity and Gas

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (14:02): I seek leave to make a ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: Consumers and businesses in South Australia are concerned that energy companies are or may be making super profits. The Malinauskas government shares these concerns and has therefore established an inquiry into energy costs and pricing. The inquiry will help the development of better protections for consumers and businesses against a predicted surge in energy prices, including penalties for bad corporate behaviour.

Protection measures must be based on accurate, in-depth information about price dynamics in the energy market. The inquiry will be conducted by the Essential Services Commission of South Australia, using its statutory powers to strip back any veils of secrecy being used to conceal profiteering. It is being established under part 7 of the Essential Services Commission Act 2002, which provides for an industry minister by written notice to refer any matter to the Essential Services Commission of South Australia for the commission to conduct an inquiry into the matter.

By virtue of section 14D of the Electricity Act 1996, the electricity industry is a regulated industry for the purposes of part 7 of the act. By virtue of section 18B of the Gas Act 1997, the gas industry is a regulated industry for the purposes of part 7 of the act. As the minister administering the Electricity Act 1996 and the Gas Act 1997, I have instructed the commission to conduct the inquiry. Establishment of the inquiry is one of a raft of measures being instigated by the newly created National Energy Crisis Committee of Cabinet.

The commonwealth has forecast that electricity prices will increase by 56 per cent over two years and gas prices by 20 per cent annually over the same period. The Australian Competition Consumer Commission is concerned the high international prices for gas may flow through to long-term domestic gas contracts. Russia's illegal invasion of Ukraine has disrupted world energy markets and caused prices of coal and gas to spike. However, there is almost no transparency on exactly how the level and timing of those international prices have flowed through to domestic prices paid by South Australian consumers.

To have confidence in the energy system, consumers must know whether rises are justified and whether all possible restraints are being employed. The Essential Services Commission will inquire whether there is any evidence or potential for a party—that is, a retailer, generator, trading entity or other relevant party in the electricity or gas industry—to be earning sustained super profits to the financial detriment of South Australian consumers.

The commission has the power to demand entities reveal relevant information. It will consider costs, terms and conditions of supply and transport of fuels, financial and physical risk management and any other relevant factors. The commission will invite public submissions to the inquiry. The commission may make recommendations about possible changes to regulations to better protect the long-term interest of consumers. Recommendations could include incentives and penalties. A draft report from the inquiry will be provided to the minister—me—on or before 1 May 2023 and a final report within 14 days after the minister responds to the draft.

The Malinauskas government is fully aware of the risks to the economy and the wellbeing of South Australians from predicted energy price rises in this national energy crisis. This government is not afraid to step up and challenge companies which are not performing in the interests of South Australian consumers. We will use all measures at our disposal to rein in the cost of living and penalise any entity using the global turmoil to exploit energy consumers.