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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-05-29 Daily Xml
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STATUTES AMENDMENT (NATIONAL ENERGY RETAIL LAW IMPLEMENTATION) BILL

Final Stages

Consideration in committee of the Legislative Council's amendments.

The Hon. A. KOUTSANTONIS: I move:

That the Legislative Council's amendments be disagreed to.

I begin with amendment No. 13A of section 36AC—Interpretation. The government opposes this amendment. The amendments were passed in June last year and acted to limit the cost of the solar feed-in scheme borne by all electricity customers who pay for it through their electricity bills, including a provision to exclude solar systems that are, in the opinion of the distribution network operator, ETSA Utilities, operated for the dominant purpose of feeding into the grid.

The solar feed-in scheme was explicitly designed as a net scheme rather than a gross scheme; that is, the intent of the scheme was to first meet the consumption on the customer's connection point with a feed-in tariff only paid on any additional electricity generated and exported to the grid. A solar system installed in a gross configuration has a considerably greater cost on all electricity customers for feed-in tariff payments than those installed in a net configuration. This amendment would result in the solar feed-in scheme becoming a gross scheme for some customers, thereby increasing the cost of the scheme on all electricity users. In 2012-13, ETSA Utilities is already seeking to recover $160 million of feed-in tariff costs to customers, which includes some under recovery from previous periods.

The amendment is also problematic in light of action by ETSA Utilities to carry out the dominant generator provision. ETSA Utilities advises that 126 solar customers out of the 143 who had the option to rewire or move their solar systems to another connection point on their property to remain eligible under the scheme have now done so at their own expense. If the amendment passed, these solar customers would then have an incentive to rewire their solar systems in a gross configuration. I therefore urge the committee to oppose the amendment.

Mr WILLIAMS: The minister laments that this may impose a cost upon all electricity consumers in South Australia. The minister fails to acknowledge that the whole feed-in tariff scheme has imposed a cost on all electricity consumers in South Australia; in fact, it has imposed a significant burden on all electricity consumers in South Australia. Let's not forget some of the history.

The minister goes on the public airwaves in this state and blames the opposition for this because we supported an amendment by the Greens in the first instance to give the feed-in tariff scheme a 20-year life span as opposed to a five-year life span. I recall saying in this very house at the time that it was the expectation that the house would review this legislation on a regular basis over the ensuing years, and that is exactly what should have happened. The reality is that the government's initial intention was to have an installed capacity of PV solar cells of about 60 megawatts.

I know we have approvals (I am not sure what is the actual installed capacity) of well over 200 megawatts, and probably close to 250 megawatts, probably four times as much as the original intention, only because the government failed to act. The government was very late in implementing the review it had promised when the original legislation went through the parliament, remembering that the trigger to set off the review—10 megawatts of installed capacity—was achieved in May 2009. The review did not start until the end of October 2009, and then the election ensued. We heard nothing about the review, which was suppose to report back to the government by the end of calendar year 2009, until a press statement by the then premier on 31 August 2010, at which time—

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: No, I am just talking about the history of the feed-in scheme itself, at which time—

The Hon. A. KOUTSANTONIS: On a point of order, he should be talking to the amendment.

Mr WILLIAMS: —I am just bringing us up to speed—the premier announced there would be a cut off of the scheme and also announced that there would be a limit to the size of generators installed and that there would be a dominant purpose test. That was announced on 31 August 2010. We did not see any legislation until the beginning of 2011. That legislation passed through the parliament, I think, sometime in June 2011 and the cut-off date was eventually 30 September 2011. We have a series of statements, we have a series of actions, all of which prompted people to go out and install systems. We saw this huge rush and the government had completely lost control of the system. That is why we have this huge install capacity—all receiving the benefits of the feed-in tariff—at least four times as great as what was originally intended.

Notwithstanding that, we have seen a very small number of people, who acted in very good faith, severely disadvantaged by the scheme. The problem is that the criteria set for the dominant purpose was not established until the very last day that the scheme was open—30 September last year. That was the day that the then minister sat down with ETSA and discussed what criteria would be used to establish the dominant purpose.

A number of people had gone out in good faith and paid thousands of dollars to install schemes in the belief that they would be admitted to the scheme. A number of these people have since been declared to be excluded from the scheme, simply by dint of the circumstances of their property—the fact that they have more than one metre.

The Hon. A. Koutsantonis: That has been fixed.

Mr WILLIAMS: No, it hasn't.

The Hon. A. Koutsantonis: Yes, 126 of the 143 are fixed.

Mr WILLIAMS: What about the others?

The Hon. A. Koutsantonis: They don't want to fix them.

Mr WILLIAMS: No, because it is not practical. So, you are talking about a very small number of people.

The Hon. A. Koutsantonis: Yes, and you are holding up national reforms.

Mr WILLIAMS: I am not holding up national reforms. Minister, you can fix this.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: Minister, you have been on public radio saying that you will fix this. You have offered no alternative to the parliament.

The Hon. A. Koutsantonis: Yes, I have.

Mr WILLIAMS: No alternative.

The Hon. A. Koutsantonis: Yes, I have; that's not true.

Mr WILLIAMS: Well, where is it? What amendment are you going to move to fix this? The only alternative you have offered to the parliament is to say that there are a number of people out there who, in good faith, have spent a lot of money in the expectation they will be part of the scheme, and you have said, 'Sorry, bad luck. Goodbye.'

Some of them have been forced by your lack of action to spend more money to rewire the meters on their property to comply with the criteria which your government only established on the last day of the scheme. This is the problem. This is a problem of your government's making. I just remind the minister, when he talks about cost imposition, if it was not for the opposition opposing his government's proposal to add even another 10¢ per kilowatt hour to the feed-in tariff, South Australian consumers would be paying another $90 million a year because of this government's mishandling of this scheme from start to finish.

This proposed amendment will overcome the problem faced by a small number of South Australians, who, in good faith, have sought to do what thousands of South Australians have done but have been caught out by criteria.

The Hon. A. Koutsantonis: No, 146. Not thousands: 146.

Mr WILLIAMS: No, all they want to do is what thousands have done; that is, take advantage of the feed-in tariff. In fact, I think it is close to—

The Hon. A. Koutsantonis: You said thousands were disadvantaged.

Mr WILLIAMS: No, I said 'a very small number'.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: You can check all you like. You were talking while I am—

The ACTING CHAIR (Ms Thompson): Order! Member for MacKillop, please address the chair and the minister will stop interjecting.

Mr WILLIAMS: Thank you, Madam Chair. I do know that interjections are out of order and, if the minister did not interject, we would not be having this problem. Now that I have his attention, I will repeat for the minister: a small number of South Australians, who acted in good faith in wanting to take advantage of something which was available to thousands and taken up by close to 100,000 South Australians—no, I do not think it is quite that many—that is, the feed-in tariff, have been disadvantaged because you have just got it wrong, minister. You have got it wrong.

You did not actually change the rules, but you did not establish the rules until the last day. These people acted in good faith, thinking they had a government that would do the right thing by them, and they have been caught out. This simple amendment will solve that problem for a very small number of South Australians. Let us not forget that there is another clause in the act which limits the amount that the feed-in tariff is paid to 45 kilowatt hours per day. Notwithstanding the minister claiming that this measure would turn the scheme from a net feed-in to a gross feed-in, that is simply not right. The limit of 45 kilowatt hours per day would kick in in many cases, and I suspect in many of the cases that the minister is alluding to. They would also be limited to that, and I would be absolutely amazed if there were not a significant number of South Australian households, who have complied with all of the criteria which were set on that very last day that the scheme was open who are not limited by that 45 kilowatt hours per day figure. I suspect that that—

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: See, you don't even know your own legislation.

The Hon. A. Koutsantonis: Explain it again.

Mr WILLIAMS: For the minister, I will explain his legislation. There is a limit of 45 kilowatt hours per day that any small PV generator can be paid the feed-in tariff on. No generator can be paid on more than that, irrespective of how much they feed back into the grid. I think that is a very sensible limit. If the minister is complaining that these particular householders would be getting away with something that is not available to anybody else, I point out to him that the 45 kilowatt hours per day feed-in limit would probably pull them up short of being, for all intents and purposes, a gross feed-in generator, just as I am absolutely certain that there will be a significant number of other PV generators that are limited by that 45 kilowatt hours per day.

The opposition thinks this is a very sensible amendment. Indeed, it overcomes problems created by a government that lost interest the moment after it achieved the headline way back in 2007 and the then premier got to speak at the Solar Cities conference in February 2008. Once that moment had passed, the government lost interest in this scheme. It had achieved its end: the political end of getting the headline and the Premier being able to claim that it was the first scheme in South Australia.

It is the government's mismanagement that has caused this problem. The opposition is not doing this to try to help the government out. The opposition is doing this to try to help South Australian citizens who have acted in good faith. Notwithstanding acting in good faith, they have received no help from the government. The opposition commends the amendment passed in the other place and urges the government to change its mind.

The Hon. A. KOUTSANTONIS: The shadow minister says that the 45 kilowatt hours per day rule is sufficient redress to stop this becoming a gross scheme, even though he knows that if the generators are built for the dominant purpose of just feeding into the grid, without any consumption linked to that generation, it is a gross scheme. He knows that, yet he gets up and he says, 'Well, it's not.'

Of the 143 customers who had solar systems that were not complying with the rules, 126 have made the recommended changes and there are 15 customers still being investigated, and the opposition, with the Greens, are moving amendments in the Parliament of South Australia to address that while the investigations are still underway. I understand—and I said this when the bill was first being debated—the unique situation some farmers are in, and I undertook to the deputy leader that I would meet with anyone he sent to my office who was in this situation to try to sort it out for them, without having to change the legislation in the parliament, because we are the lead legislator and this is holding up legislative reform around the country. I am not saying that the opposition is deliberately trying to delay reform—I am not saying that at all—I am just saying that it is a consequence. So, we are sorting it out, and to try to politicise this, I think, is unfair in the extreme, when the government is attempting to try to resolve this.

I would ask the Leader of the Opposition to take the government on its word on this matter that we are attempting to solve this. I pose this question to opposition members: if this amendment is carried, and it passes both houses of parliament and is assented to, what do we say to the 126 people who have changed their meters? I suppose there will be another bill from the Leader of the Opposition or the deputy leader to compensate them, and perhaps that compensation could also be added to the electricity bill of other South Australians. I think we have reached a point where we can settle this.

What the Leader of the Opposition has to realise also is that the 126 people who have made the change also receive the benefit of a 44¢ feed-in tariff. I think there needs to be a point where we reach some common sense. Obviously, we are not going to here and now, but ultimately there will be a deadlock conference. I urge members of the committee to oppose the amendment.

The ACTING CHAIR (Ms Thompson): Do you want to continue?

Mr WILLIAMS: Yes, I do, Madam Acting Chair, because the minister made a couple of statements there which I think need responding to. I think the minister is suggesting that, because there are only 15, we should not worry about it.

The Hon. A. Koutsantonis interjecting:

Mr WILLIAMS: Minister, you made the statement that, of the 143 who were deemed to be noncomplying, 126 have managed to become complying and there are only 15 left. The minister implied that somehow it seems wrong that the parliament would be bothering to move an amendment because there are only 15 people involved. If there was only one person who was disadvantaged, through no fault of their own, this opposition would see that as a very serious matter. I know the government does not care. I know the government is worried only about big numbers; it is not worried about little numbers.

The minister says that we should not politicise this. I would ask the minister to think about that next time he is out on public radio suggesting that all the problems with the feed-in scheme, and the cost that has been put on the electricity accounts of every South Australian, are solely the responsibility of the opposition. The reality is that it has nothing to do with the opposition. The opposition pointed out, in the first instance, that this legislation would need constant management. It was the government that took its eye off the ball.

The other thing is that the minister has just asked us to trust him. I wrote two letters, with two specific cases, to the minister prior to Christmas last year; I am yet to receive a response to either of those letters. Minister, your plea, when you say, 'Trust me. Leave it with me, and I'll fix it up,' I think, at this point, is falling on deaf ears.

The Hon. A. Koutsantonis: You'd better be right about those letters.

Mr WILLIAMS: I am right. I wrote to your office twice, and to the best of my knowledge I am yet to receive a response—

The Hon. A. Koutsantonis: So, it's to the best of your knowledge now, is it? Okay. I'll check.

Mr WILLIAMS: Yes, to the best of my knowledge, and I think my knowledge is accurate, I have yet to receive a response to either of those letters. I fully understand that we are the lead legislator for this piece of legislation, and it is important to get it through, but the parliament has one chance to resolve this matter for those people who have been disadvantaged. If I said to my colleagues, 'Let's let the minister get away with this, and we'll trust him and he'll fix it up,' we have no guarantee that for those people this problem will be fixed. This issue has been going on since 30 September last year. I think the minister has had plenty of time to fix it. The minister, I believe, has left the parliament with no choice but to say enough is enough; it is time for this to come to an end. My comments to the next matter will be very similar. Again, I urge the government to change its mind on this.

The Hon. A. KOUTSANTONIS: Amendment No. 2 was moved by the Hon. David Ridgway in another place, and the government opposes this amendment also. The government was advised by ETSA Utilities that this amendment would result in an additional cost to the scheme of approximately $1.65 million per annum. However, based on a revised figure, ETSA Utilities has revised the figure to approximately $1.23 million per annum. All electricity consumers will be required to fund this additional cost. Given what the Deputy Leader of the Opposition just said, I will be interested to see how he votes on this amendment.

In 2012-13, ETSA Utilities is already seeking to recover $160 million of feed-in tariff costs from customers which includes other recovery from previous periods. Amendments resulting in additional cost to all electricity consumers are inconsistent with the council's intent when it passed the changes to the scheme in June of last year about limiting the cost impacts to all customers. In August 2010, solar customers were made aware of the proposal to prohibit upgrades of solar systems for the purpose of the solar feed-in tariff. Accordingly, solar customers had the opportunity to fully complete an upgrade of their system between 31 August 2010 and 30 September 2011 to remain eligible for the 44¢ kilowatt feed-in tariff.

Mr WILLIAMS: I am somewhat amazed by the figures that the minister has just indicated to the house from his briefing from ETSA Utilities. I am staggered that there are that many people involved to be quite honest, but notwithstanding that I thought the number of people was very small who were caught out by this particular issue that the opposition is trying to resolve through the amendment that was proposed by the Hon. David Ridgway in the other place and supported by the house.

Let me explain the situation. The scheme allowed new entrants up to 30 September. It also allowed people who had already put on a small PV generator to upgrade that and increase the size and still remain as part of the scheme as long as they had applied for that upgrade and got approval for that upgrade prior to 30 September. For new entrants to the scheme, putting in a new system, there was a grace period in which they had a time in which to have the work done and their system upgraded and installed.

It is my understanding that there are a number of people in that circumstance who, once they have installed their import/export meter and their inverter, ETSA Utilities has really no knowledge of how many panels they have attached. So, as long as they do not attach more panels than the approved size of their inverter, they will stay on the scheme. It is my understanding that there are possibly people out there in South Australia today whose inverter and import/export meter has only just been cut over, who are in the process of adding more panels and will do until they get to the limit of their authorisation. That is the practical reality of what is happening for people who applied for a new development. The people who applied to upgrade an existing system did not have the advantage of that time leeway.

I have at least one constituent living out in the country who applied for an upgrade and signed a contract with an installer to provide the equipment to upgrade a system that had been in for a couple of years. He had an appointment for the equipment to be installed, indeed, before 30 September—I think that was the date. There was inclement weather; the installer did not get to the property until after the cut-off date and then installed the additional panels. The constituent was then notified by ETSA that they were noncompliant because they had missed that date.

If they had been a new entrant into the scheme, that would not have been the case. It was just because they had upgraded a pre-existing scheme that they became noncompliant. Not only have they become noncompliant with their upgraded scheme, they have also been informed that, even if they took off the additional panels, they would still be noncompliant with their original scheme and would no longer be eligible for the feed-in tariff.

That is one customer I am aware of in my own electorate. The figures the minister just gave to the house suggest that a significant number of people have been caught out in a similar way, if it is going to cost over $1 million per year; I am somewhat surprised by that number. Notwithstanding that, again, we have a piece of legislation that I think, unintentionally, has treated people in two different ways, and all we are trying to do with this amendment is to ensure that people who were early movers are treated equitably compared with those people who applied right at the end when the scheme was about to close—say, on 29 or 30 September last year.

The interesting thing that I think the committee needs to note is that the minister said that the cost to electricity consumers as a whole is $160 million. That is a pity. That is something the government bears total responsibility for.

The Hon. A. Koutsantonis: No, we don't.

Mr WILLIAMS: I know you say you don't, but the reality is—

The Hon. A. Koutsantonis: You extended it to 25 years.

Mr WILLIAMS: —I think it was 20 years, minister—that your government failed to get the review up and happening and then failed to respond to it. Then when it did respond, the government failed to bring legislation to the parliament. It failed at every opportunity. I do take pride in the fact that we successfully moved amendments to prevent the government adding another 10¢ per kilowatt hour, which I believe saves electricity consumers across South Australia $90 million a year.

The cost—which is $160 million—would, but for the opposition, be $250 million a year. Minister, what the opposition has been responsible for is saving you from your own folly but, minister, if your government had a heart, it would have supported the previous amendment, and it would support this amendment. There are a small number of people you are happy to see disadvantaged. I commend the amendment to the committee.

The Hon. A. KOUTSANTONIS: Isn't it amazing that the Leader of the Opposition can hold so many positions on one issue?

Mr Williams: The Leader of the Opposition is not here.

The Hon. A. KOUTSANTONIS: Sorry, mate. It's a dream I have for you to lead them. I hear him quite regularly talking about renewable energy and this government's obsession with renewable energy being a cost burden on South Australians.

Mr Whetstone: It's a cost burden on me.

The Hon. A. KOUTSANTONIS: It's a cost burden on you—the member for Chaffey says so, yet he is about to support a measure that would further increase that cost burden. The government proposed that there be a feed-in tariff for five years. It was amended to 20 years by who? The Greens-Liberal coalition. Then he goes on radio and says, 'Oh, but it's the government's fault.'

An honourable member: Absolutely.

The Hon. A. KOUTSANTONIS: Absolutely—there you go. I think the point to remember here is that publicly the opposition would say, 'Renewable energy pushes your power prices up,' but in the parliament where it matters, where they can make a difference, they vote every single time to pass on the cost to consumers. Five years to 20 years, thanks to Mitch Williams and Isobel Redmond. Those amendments were supported in the upper house by the opposition. The government is saying that there should be no further increase in the cost to consumers. The opposition, in coalition with the Greens, seeks to add a further $1.23 million per year to the cost. I ask members of the House of Assembly to remember while they are voting that if this amendment is successful the result will be an increase in the cost of electricity prices.

Mr WILLIAMS: I wish to apprise the committee of a recommendation from the review into the feed-in scheme, and I will be brief. The report states:

It is recommended that the government consider implementing a scheme cap similar to the Victorian scheme, at which point, the scheme would be closed to new entrants. Given the relative size of South Australia's population to Victoria, it is suggested that this cap would be less than the 100 [megawatt] cap in Victoria. Advice would be sought from the government and 'Renewables SA' as to the most appropriate cap in consideration of the total expected costs of the scheme and the 2020 target for renewable energy penetration in South Australia.

The report also states:

Victoria has implemented their premium scheme with two clearly defined scheme caps and allows the Minister to declare a 'scheme capacity day' when either of these is reached. The first cap is for a maximum installed capacity of 100 [megawatts] and the second cap is when the scheme's average cost per customer of electricity per year exceeds $10 (whichever occurs first).

That is the government's own report; that is the recommendation the government ignored and, notwithstanding that it ignored it, the government did not even respond to the report for well over six months and then did not respond legislatively for well over another six months. That is why this scheme is a mess; that is why South Australian householders are paying $160 million. If the government had taken the recommendation of its own review, it would have limited the cost to other South Australian householders to $10 each per year.

The opposition takes no responsibility for the cost caused by this. The opposition does take responsibility for, first, restricting the $90 million cost that the government wanted to impose and, secondly, for ensuring that the scheme is fair. We do not believe that legislation and regulation should be made at the eleventh hour which disadvantages individuals. One thing about the Liberal Party is that we understand the concept of fairness—we understand it.

Motion carried.

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