ELECTRICITY PRICES, COOBER PEDY

In reply to the Hon. T.J. STEPHENS (22 March 2011).

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling): The Minister for Energy has advised:

1. The Government advised the three Independent Operators under the Remote Areas Energy Supplies (RAES) scheme the tariff increase on 18 February 2011 for implementation from 7 March 2011, with a staged roll out in line with the Independent Operators' normal meter reading cycles.

2. A press release was issued to regional media outlets on the same day that Independent Operators were advised of the revised tariffs. Information, including a suggested letter to customers, was provided to the Independent Operators for them to use in communicating with their customers regarding the tariff changes.

3. The impacts on customers in the 13 remote area towns under the RAES scheme, including both households and businesses in Coober Pedy, were carefully considered prior to the decision to implement new tariffs that reflected the increased cost of service provision under the scheme.

4. The South Australian Government will continue to make a significant funding contribution towards the RAES scheme with around $5.5 million per annum contributed toward the provision of safe and reliable electricity supplies to 2,600 customers across 13 remote area communities.

The Department for Transport, Energy and Infrastructure (DTEI) is currently finalising new agreements covering future subsidies to the Independent Operators, including the Coober Pedy Council. These agreements, based on regulatory principles used by the Essential Services Commission of SA to regulate on-grid electricity businesses, should provide a solid basis for future energy supplies.

Consistent with the long standing RAES policy, small to medium domestic customers will continue to pay no more than 10 percent above the on-grid regulated standing contract tariff for reasonable levels of consumption. In fact, even with the recent tariff increases, small to medium domestic customers will be charged on average about 4 percent higher than equivalent on-grid customers.

Larger domestic and General Supply customers will move toward tariffs reflecting the full cost of supply at high levels of consumption. A significant subsidy is still being provided for all General Supply customers. For large customers this subsidy is being provided for the first 160,000 kWh of their annual consumption. Above this level they will pay the full cost of supply to encourage appropriate business decisions based on the true cost of supply.

5. Businesses have been offered energy audits and subsidies for changes to their infrastructure to improve energy efficiency and thus reduce their energy consumption via the Commonwealth Government funded Renewable Remote Power Generation program administered by DTEI.

The State Government will undertake a review of the RAES scheme to determine what opportunities there are for connecting towns to the national electricity grid while also considering incentives to lower energy use and the potential for alternative and renewable energy.

Energy Division within DTEI has worked closely with Department of Premier and Cabinet and the Coober Pedy Council in the past to investigate investment in solar photovoltaic (PV) systems in Coober Pedy. Consideration was given to both large scale and domestic PV systems seeking to utilise incentives available from both the Federal and State Governments at the time. Unfortunately no projects have proved viable to date.

The South Australian Government provides a range of concessions for eligible domestic customers. Low income households who meet the criteria can receive a concession payment of up to $210 annually on their water rates and up to $150 annually on their energy bills through the Department for Families and Communities.