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House of Assembly - Fifty-First Parliament, Third Session (51-3)
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NATIONAL ELECTRICITY (SOUTH AUSTRALIA) (SMART METERS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 September 2009. Page 3762.)

Mr WILLIAMS (MacKillop) (11:27): I indicate to the house that I am the lead speaker on behalf of the opposition on this bill and that the opposition will be supporting the bill as presented to the house without amendment.

Smart meters is a new piece of technology which has become available in recent years. Back in February 2006, COAG came to a conclusion that smart meters should be rolled out across Australia basically to perform two functions. It would give consumers of electricity the opportunity to get a real-time pricing signal on their consumption and then modify their consumption according to that, which should in theory deliver benefits to consumers through those price signals.

Also, in doing so, obviously the price rises under the national electricity market at times of high demand, so it would ameliorate demand at those times and flatten out the peakiness of the demand curve on supply, therefore lessening the amount of investment that needs to be put into new generating capacity. That is something that we are very aware of here in South Australia having probably the peakiest demand curve of any electricity network certainly in this nation and possibly worldwide.

The National Electricity (South Australia) (Smart Meters) Amendment Bill is the third in the latest suite of bills which has been brought to the parliament in recent times with regard to the national energy marketing system that we have now embraced, encompassing both electricity and gas. This particular smart meter rollout has already begun. Pilot programs, I understand, have begun in both New South Wales and Victoria. The minister here in South Australia has consistently told the house that he does not believe that the benefits outweigh the costs, certainly in the South Australian context.

The Hon. P.F. Conlon: I think they are rethinking it in other places.

Mr WILLIAMS: He is suggesting across the chamber right now that he thinks that some of those other states are rethinking their position on smart meters. In recent discussions I had with ETSA Utilities, Lew Owens told me that rather than having smart meters, which would give individual consumers the power to modify their consumption, ETSA Utilities is working towards what we would refer to as 'smart networks'.

We have already seen demand management technology put in place in a couple of trials—at Mawson Lakes and Glenelg, I believe—where the load to certain high energy appliances (principally air conditioners) can be turned off for short periods during times of peak demand to lower the overall load. Again, I understand that happens at the individual household or business level, where smart networks would operate by having intelligence regarding demand on individual transformers gathered at a central point. It may be a particular street or couple of streets, and the distributor could manage the load transformer by transformer or area by area. That would provide a way to manage load, as well as ensuring that particular nodes in the system were not overloaded—probably the greatest cause of blackouts in peak demand periods in South Australia.

Lew Owens told me that, since the initial discussions on smart meters back in 2006, their cost has fallen dramatically; at the time I think it was about $600 per metre to install, and it is probably under $400 now. He also told me that the technology used in their demand management scheme could well be incorporated into a smart meter; so both pieces of technology could be bundled into one for installation, again giving greater flexibility to the management of load and networks. I look forward to seeing further developments in that area.

I remind members that this piece of legislation has been brought to this place because South Australia is the lead legislator with regard to electricity and gas law. It is not necessarily directed totally at the South Australian jurisdiction, but will allow those other jurisdictions—New South Wales and Victoria—to have the legal backing to continue with their smart meter rollout. It also gives the South Australian minister the power to make a ministerial determination with regard to other demand management technologies, such as the ETSA trials of direct load control to which I have just referred.

The electricity industry is moving forward very rapidly with these new technologies, which will smooth out our demand curve. We are also seeing many new technologies being applied on the generation side. I will not go into those today, but I think this is a significant step forward. Indeed, in South Australia we may rethink our position on smart meters as we go forward as well, but I acknowledge the briefing I received from Lew Owens, which suggested that there is great potential for us to modify our load characteristics for the benefit of South Australian consumers, both domestic and business. I commend the bill to the house.

Mr VENNING (Schubert) (11:33): The opposition supports this bill, as the shadow minister (the member for MacKillop) has indicated, and I congratulate him on putting the case for the opposition. This is good legislation—and how often have honourable members heard me say that in the last 7½ years?

The Hon. P.F. Conlon interjecting:

Mr VENNING: The minister interjects; and, yes, I have to say that this minister probably has more pluses on his plate than any of the others—particularly when it comes to ports and rail. At least he has delivered; he may not be very friendly sometimes, but he has delivered.

An honourable member interjecting:

Mr VENNING: Well, he has had the most important portfolios as well. This is good legislation; it is proactive, and it will send the right message to consumers regarding the efficient use of electricity and the government's ability to supply it. It gives consumers the opportunity to modify their consumption. It gives people the choice to use only low-priced offpeak power, medium level power or high peak power. I have always believed this because, when you look at your meter, if you are able to say that you will not use high peak power or medium power, you could probably cut your power bill by as much as 75 per cent. It will mean, though, that on those high peak days you will have to make alternative arrangements, and many people would do that.

In this instance, if some larger consumers worked out what it would cost, depending on how much they use, it may be smart business for them to install their own electric diesel generator, especially if they are a high use consumer, or to share one with some neighbours. If you are a high user of premium power, you certainly would. It ought to be tried. It would depend on what the rates of the tariffs are and your supplier, but it certainly would be an interesting exercise. Again, I think it is a great opportunity for us to move forward on this legislation.

It also will give the supplier, depending on the technology of these meters, the opportunity to send messages to its meters and, therefore, to the user. It also enables the supplier to switch off meters in times of critical emergencies to smooth out the demand curve. Like everything else, the more people who come online and have these installed the cheaper they will become; so, the rollout needs to be accelerated. I am sure that a large percentage of South Australians will embrace this, even though it would be very expensive to install in the first instance. I believe that, for the sake of expediency and the environment, South Australians will embrace this and pay the cost to have them fitted because they will have the flexibility of using the cheaper grade powers if they choose. Certainly, the opposition supports this bill; it is good legislation.

Mr HANNA (Mitchell) (11:37): I want to make a few remarks about the government's legislation concerning smart meters. These are devices to be fitted into people's homes and businesses. They will allow information to be passed back to a central point so that electricity planners can find out what people are doing in their homes with their electricity usage, but something else is tucked away in this bill called the direct load control device. That allows remote control over people's air conditioning, pool pumps, water heaters and so on, and these can be activated by the electricity supplier, I think, to cut out people's equipment at home.

If we need to do this for the conservation of electricity, so be it; maybe we are in such a desperate state that we need to take these measures. But when this sort of extraordinary intervention in people's homes takes place, I am always surprised that the Liberal Party is so far departed from its origins in liberalism that it passes these measures without blinking. I think the community would be shocked to find out what is in this legislation, and they certainly will be shocked when it becomes mandatory as opposed to merely a test pilot run. It is one thing to test it but another to bring it in and make it mandatory. If we go down that track, there will be a lot of upset people because a lot of people do not want big brother telling them when they can and cannot have their air conditioner on.

The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (11:39): I thank everyone for their contribution. First, to work through smart meters, COAG was moving to a rollout of smart meters some years ago, and it was the Premier of South Australia who asked for an amendment to the COAG decision and said that smart meters would be rolled out where a cost benefit analysis justified it. I think it was a very smart thing for the Premier to have done because, having been adopted, the consequent cost benefit analysis pointed to very little (probably negative) benefit to South Australia.

There are other jurisdictions where that cost benefit analysis looks different, and that is why we as a lead legislator are happy to promote this legislation; it will allow those trials in other places. I point out to the member for Mitchell that these matters are ongoing; this is merely the legal background to it. Both the smart meter rollouts in other states and direct load control trials have occurred here.

The member for Mitchell needs to understand that it is completely wrong to suggest that direct load control is about a shortage of electricity; it has nothing to do with it at all. It is an entirely voluntary program where people in those trials sign up for a reduced tariff in order to trial controlling peak demand, which costs everyone a lot of money, by their progressing through turning off some items in the home for a short time. What is measured through that is whether you can, by direct load control, control some of those items, including air conditioning, without making any difference to the comfort in the home—the comfort of people who undertake these trials. They remain trials, and the results are very strong.

There is absolutely nothing in this bill that suggests a mandated rollout of direct load control; it is not necessary. We are talking about a large marketplace and what this allows retailers to do. You have to remember that, at the moment, it is a distribution company conducting the trial. What it will allow us to do, in the fullness of time, is to have retailers offer products that might include direct load control, and that is some way off.

It also gives us the capacity to have the laws suitable for very quickly changing technology. What we have seen in recent years is the merging of information and communication technology, so that we no longer talk about IT: we talk about ICT. I think the next step will be, as ETSA has suggested, for a further convergence to have smart grids, that is, the same wires taking electricity to your home also provide information about the nature of that grid. DLC is a small part of this, but one of the very important things about it, which a lot of people do not realise, is that, at present, when the household goes off the power, the distribution company does not know where it is. When many households go off, they know that some load has gone off, but they do not necessarily know where. In fact, people should always ring ETSA if their power goes off, because they should not assume that their distribution company would know.

All we have here is the legal framework by which the national electricity market can embrace new and emerging technologies. I can assure the member for Mitchell that it will be on a voluntary basis, as it is at present. It will not be that we will do this and then do a DLC trial start. The DLC trials have been ongoing. I would urge the member for Mitchell maybe to have a talk to ETSA about those trials, because they have been quite successful. I point out that controlling the summer peak is not about the lack of supply. It is about the overbuilding of networks and the overbuilding of generation and, of course, those fast start peakers will generally be dirtier generation than what is going to be the emerging baseload of natural gas. There are a lot of environmental reasons why you want to find technology that will help you to control summer peak. Obviously, if you over-invest, someone has to pay for it. South Australian pricing is consequently higher than many places interstate because our summer peak is the worst.

I commend the bill to the house. It will allow other states to do what they want to do with smart meters. I personally do not see any time in the future—and I am prepared to be wrong—where there will be a cost benefit analysis in rolling them out. I make the point that you can get one if you want; we are not preventing it. Anyone who thinks there is an advantage in real-time metering is free to get one, but I would say that you would have to be a very large customer. That ability has been around for a very long time and I must point out that very few large customers have taken it up, which I think supports the case we have made in South Australia.

It is an important piece of legislation for the national electricity market and, in terms of smart meters, it is far more important in other jurisdictions than it is here. It will allow us to embrace those technologies if there is a benefit from them and if people want them.

Bill read a second time and taken through its remaining stages.

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