AUSTRALIAN ENERGY MARKET COMMISSION ESTABLISHMENT (CONSUMER ADVOCACY PANEL) AMENDMENT BILL

Committee Stage

In committee.

Clause 1.

The Hon. P. HOLLOWAY: I advise the committee that this bill was drafted by Mr Richard Dennis, so it should be a speedy committee stage. I take the opportunity to respond to the Hon. Dennis Hood who asked several questions to which I undertook to get more information. In relation to his first question, he asked:

Family First is concerned that there is scope for an abuse of this advocacy support system. Namely, that with such high limits at the upper end big business could well take over the advocacy, pretending to be advocating for the small to medium end users. On my understanding, for instance, there was only one small user representative on the panel, which sees them clearly out voted by industry representatives and big business combined, which is a significant problem that will need to be addressed in the summing up.

I have been provided with the following answer. The Consumer Advocacy Panel members will not be representing sectoral interests. Further to the response to the Hon. Mark Parnell to a similar question, panel members are appointed by the minister on the recommendation of the Ministerial Council on Energy and are to be selected on the basis of their skills and expertise, including knowledge of the energy sector, the ability to assess applications for funding against criteria, awareness of public interest advocacy, and the ability to identify areas of research that would benefit customers of electricity or natural gas.

The second question asked by the Hon. Dennis Hood was as follows:

How will the Energy Consumers' Council, which seems to have more than doubled in size, from four to nine members, according to the recent 2006-07 Auditor-General's Report, interface with the Consumer Advocacy Panel created by this bill? Will it recommend or even make appointments to the Consumer Advocacy Panel?

I have been provided with the answer that the Energy Consumers' Council (ECC) has no role in making recommendations or appointments to the Consumer Advocacy Panel; that is the responsibility of the Ministerial Council on Energy. However, the ECC (or any of its individual members) is able to make a grant funding submission to the panel for advocacy and research projects. The current membership of the ECC is 10, and this has been the case since its inception in 2002. The Consumer Advocacy Panel will have five members, including the chair.

The Hon. M. PARNELL: I thank the minister for his response and I would like to tease it out a little further. Whilst I understand that the membership of the panel will not be representative in that it represents particular bodies, nevertheless I think it is important for the interests of very small consumers of electricity who are the vast bulk of consumers to be represented. How does the minister see that this panel will represent the interests of the smallest consumers?

The Hon. P. HOLLOWAY: I think the honourable member has been provided with the draft regulations. If we look at those, under clause 8 schedule 1, Criteria for Grant Allocation, one can see that the conditions there require diversity in the allocation of funding after it has taken into account the number and range of consumers that may benefit from relevant projects and the nature of the interests extended across the projects and the issue to which the projects will relate while recognising the general perspective the panel's objective set out in section 30B of the act. New section 30(b) provides:

(b) the Panel must seek to promote the interests of all consumers of electricity or natural gas while paying particular regard to benefiting small to medium consumers of electricity or natural gas.

So, one takes the criteria for a grant allocation in conjunction with the objectives the committee is required to observe. I trust that answers the honourable member's question.

The Hon. M. PARNELL: I accept that answer, but I make the point made by other honourable members, namely, that when small to medium consumers are defined as those who can spend up to $1 million on their energy I think that they are in a separate category. However, I accept the minister's answer.

Clause passed.

Clauses 2 to 10 passed.

Clause 11.

The Hon. M. PARNELL: I move:

Page 6, after line 25—Insert:

and

(c) without limiting the operation of paragraph (b), the Panel must, in its assessment processes, seek to provide an element of weighting in favour of projects that—

(i) promote the management of demand for electricity; or

(ii) prioritise energy sources according to the extent to which they are environmentally or socially sustainable.

Page 7, after line 2—Insert:

(e) an ability to provide advice on—

(i) energy demand management'

(ii) renewable energy.

I am under no illusion that these amendments may not suffer the same fate as the bill we have been just been discussing. I will not take the time of the council going through in detail again why I believe that demand management is a critical component of any debate in relation to energy and, similarly, why it is important to prioritise energy sources according to the extent to which they are environmentally or socially sustainable. Whilst these laws we have been debating may be national laws, I still think that these amendments are worth while, and I commend them to the committee.

The Hon. P. HOLLOWAY: The government opposes the amendments, which would expand upon the proposed objectives of the panel under new section 30. The government's reasons for opposing them are similar, if not identical, to those in relation to the previous bill we debated when the Hon. Mark Parnell sought to increase the objectives under the Electricity Act.

While environmental objectives are very important, and the South Australian government is actively seeking to take leadership in responding to climate change, the Australian Energy Regulator, the Australian Energy Market Commission and the Consumer Advocacy Panel are not the most appropriate bodies to determine the environmental policy priorities of governments across the energy sector.

As with other policy objectives that are not directly addressed as part of this bill, such as industrial relations, occupational health and safety and specific environmental protection, broad environmental objectives are best addressed via policy specific legislation. I previously gave the example of the commonwealth government's Mandatory Renewable Energy Target (MRET), which has achieved increased renewable energy and directly impacted on the choices being made in the National Electricity Market without having changed the National Electricity Law.

The intention of the bill is to allow the Consumer Advocacy Panel to determine which areas of grant funding would benefit consumers of electricity and gas and to keep the scope of projects that can be funded as wide as possible. This amendment would unnecessarily constrain the members of the panel in their deliberations. This intention to ensure the wide scope of potential projects available for grant funding is also reflected in the draft regulations. As I said, I have covered my arguments against both amendments moved by the Hon. Mark Parnell in those comments.

Amendments negatived; clause passed.

Clause 12, schedule and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.