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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-05-17 Daily Xml
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Electricity Market

Ms DIGANCE (Elder) (14:49): My question is to the Minister for Mineral Resources and Energy. Minister, can you update the house on what steps are being taken to increase competition in South Australia's electricity market and also if there is a role for local companies in driving competitive prices?

The SPEAKER: Is the minister able to do that?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:49): I will endeavour to do so, sir. I would like to thank the member for her question and her keen support of our energy plan and its objective of securing South Australian power for South Australians. The vision of our energy plan is to source, generate and control more of South Australia's power supply in South Australia so we can increase our self-reliance and provide reliable, competitive and clean power for all the residents of this state today and into the future.

By 'all South Australians', I don't just mean households but the majority of electricity users, such as the big industrials and commercial consumers of power. These companies have borne the brunt of the upward pressure on prices that has come from the failure of the National Electricity Market to deliver low-cost, reliable power to South Australian customers due to a lack of competition between generators because of the failed privatisation of ETSA. New generation will lead—

Mr van Holst Pellekaan interjecting:

The SPEAKER: The member for Stuart, is he interjecting or talking to himself?

Mr van Holst Pellekaan: What I was thinking came out loud, sir.

The Hon. A. KOUTSANTONIS: He used his outside voice rather than his inside voice, sir. He has both: he uses his outside voice and inside voice. New generation will lead to more competition, and that will ensure that there is downward pressure on prices. As a government, we have taken the lead by using our bulk-buying power to attract new generation to increase competition. Big industrial customers, users of electricity, have taken note of our approach and adopted a similar strategy.

I am pleased to inform the house that the Australian Competition and Consumer Commission today has authorised the South Australian Chamber of Mines and Energy, along with 27 another South Australian businesses, to establish a joint electricity purchasing group. The ACCC authorisation, valid for 11 years, allows this group, which accounts for 16 per cent of electricity demand in South Australia, to secure reliable electricity supply arrangements for its members.

A list of these members reads like a Who's Who of South Australian industry. They include companies like Adelaide Brighton Cement, Arrium, Viterra, Nyrstar, OZ Minerals, Orora, Seeley International, Thomas Foods International, Shahin Enterprises (not Wokinabox but Shahin Enterprises). The ACCC is Australia's antimonopolies watchdog and usually keeps a tight watch on companies working closely together inasmuch as they might breach national competition laws. However, this authorisation means that the ACCC is satisfied that the public benefit resulting from the conduct outweighs any public detriment.

We welcome the ACCC's decision and its ruling that companies working together on a joint power purchasing strategy is of public benefit. I am hopeful that the combined purchasing power of these companies operating in South Australia, investing in South Australia, employing South Australians, will increase the competitive tensions lost with the privatisation of ETSA, that members opposite delivered onto this state. Of course, that will have cost-added benefits for other consumers. However, you can never have too much competition in a market. I want to quote Mr Rod Sims, Chair of the ACCC, who states:

This joint tender has the potential to change wholesale market dynamics by allowing generators to use existing plants more efficiently, or encouraging [most importantly] new entrants into South Australian electricity generation.

This is what privatisation from members opposite has driven out.

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