House of Assembly Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia House of Assembly published Question Time Electricity Price Modelling Electricity Price Modelling Mr TELFER House of Assembly Flinders Electricity Price Modelling Mr TELFER (Flinders) (15:09): My question is to the Minister for Energy and Mining. Why are South Australian households now paying some of the highest electricity prices on record? With your leave, sir, and that of the house, I will explain. Leave granted. Mr TELFER House of Assembly Flinders Mr TELFER: The Essential Services Commission of South Australia publishes annual energy retail offer comparison reports which show that since the former Liberal government energy bills for households have skyrocketed by $776 per year. The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (15:09): I wish the shadow treasurer paid as much attention to the sales on in Rundle Mall as opposed to the changes to wholesale power pricing here in South Australia. The opposition are quick to compare wholesale power prices in the quarterly reports that are published, but it is a disingenuous tactic to compare different seasons where the energy profiles are completely different and costs do not reflect reality. So what the Australian Energy Regulator (AER) does annually is put out a state of the energy market report and it smooths out the jumping around of all the quarterly reports to provide a holistic representation of the state market. So, if you want to look at the average wholesale price in the last calendar year, in NSW the average price was $150 a megawatt hour, in Queensland it was $128, and in South Australia it was $132. Mr Telfer interjecting: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: Well, again, with wholesale power pricing the entire bill is set up by a number of factors. Half the bill— Mr Telfer interjecting: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: He had a toothache yesterday and couldn't speak but today—it's amazing. It's amazing what Nurofen and Panadol can do and a big bag of it too! How many did you buy? Anyway, I digress to the member's habits. I digress. Members interjecting: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: I know he's squeamish about it. It was a great photo, wasn't it? Wasn't it a great photo? Very becoming, I thought. Question time on, walking around Rundle Mall, having a look. Anyway, I will go back to more important things. About half of households' bills are made up of distribution and transmission costs. Those distribution and transmission costs are basically about half, so you are looking at about 40 per cent transmission, 60 per cent distribution costs. That's half your bill: the poles and wires in front of your house and the transmission lines to get the generated electricity to those distribution lines. Then you have the green schemes that are in place and they are about 10 per cent of the bill. The remaining 40 per cent of the bill is made up of retail, which is about 15 to 20 per cent of the bill, and the rest of the proportion is wholesale. So to try to say that this section of the bill is responsible for the outcome of the entire bill is disingenuous. So what I am trying to explain to the member, who is just constantly interjecting rather than trying to listen to the answer, the man who purports to want to run the South Australian economy, who spent most of the day yesterday shopping in Rundle Mall rather than doing his job in here—I think it's a bit rich. What I would like to do is actually tell the opposition that the retail bill is only a small part of the entire component. What South Australia is doing is attempting to lower that. The way we are trying to do that is by getting more gas into the system. What sets power prices in South Australia? It's gas. Why is it gas? Because gas peakers are the ones that set the price. They are the ones who set the last dollar. Whoever bids the last megawatt in the Australian retail energy market sets the price, and they are gas peakers. What makes gas expensive? I will tell you what makes gas really expensive: banning its extraction from the second largest basin in South Australia. And who did that? Members opposite. And then they turn up and they say, 'Why are electricity prices high?' Members interjecting: The Speaker House of Assembly The SPEAKER: The member for Flinders has interjected for the entirety of the answer to the question he asked. You can leave the chamber until the end of question time. The honourable member for Flinders having withdrawn from the chamber: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: You could duck out to David Jones and finish off your shopping. Members interjecting: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: I can do better. Apparently he injured it whilst he pulled his hamstring shopping. Members interjecting: The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Infrastructure and Transport Minister for Energy and Mining The Hon. A. KOUTSANTONIS: Yes. The energy policy in this state is set by gas pricing. Gas pricing is expensive for a number of reasons. Members opposite approved an import facility to be built and gave it state sponsorship to be built at Outer Harbor. That facility, if built and commissioned, will lock in international parity pricing for gas in South Australia, which would be a disaster.