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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Bills

Statutes Amendment (National Energy Laws) (Binding Rate of Return Instrument) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 25 October 2018.)

Ms LUETHEN (King) (11:04): I rise to speak briefly on the Statutes Amendment (National Energy Laws) (Binding Rate of Return Instrument) Bill. I refer to the government's excellent focus on energy prices in South Australia and to the national reform, which keeps that focus. At a state level, energy prices are certainly a concern in my electorate. Last week, I attended a community services forum in the City of Tea Tree Gully. Energy prices, and how they are hurting households in South Australia, continues to be a key topic of discussion.

One of the things I did at this particular forum was encourage stakeholders in the community to get the message out that, if people are struggling with their energy bills, they can seek help early by contacting energy companies and talking to their hardship areas about how they can put a plan in place. Importantly, they can also look at how they might do an energy audit within their home to make sure that they are using energy most effectively.

This advice is available at my King electorate office and we have numbers to call. So, if anyone in the community is seeking help to control energy bills at home and struggling to pay those bills, please seek help early. I am very impressed by what we are doing on this side of the house to continue to be at the forefront of what is happening nationally. We continue to deliver on our election promises to deliver better services and lower costs in South Australia. I support the bill.

The SPEAKER: Is the member for Enfield seeking the call?

The Hon. J.R. Rau: Absolutely not. We are supporting this bill. I do not know why anyone is still speaking on it.

Mr TEAGUE (Heysen) (11:06): It is a rare event for the member for Enfield to seek the call. I immediately looked across to the other side, looking forward to any contribution that may have come from the member for Enfield in this 54th parliament.

The SPEAKER: Let's get on with it, please.

Mr TEAGUE: I rise to support the bill also. I am glad to hear about the furious agreement of members on all sides, including the member for West Torrens, who, I am glad to say, is present in the chamber this morning to participate in the debate. I listened carefully to the member for West Torrens' contribution prior to the chamber rising at the conclusion of the last sitting week. I am pleased indeed that we in South Australia are participating in this very important national scheme.

In the context of the debate about the national energy laws and ensuring that we have a reliable and affordable energy grid in this country, I am very mindful of what occurred on 28 September 2016—time flies by. I am sure it is a date that is burned in the memories of all South Australians. It will be very much burned in the memory of the member for West Torrens. It is a day that is writ large in my memory for a number of reasons. Like so many South Australians, I know exactly where I was at approximately 3pm on 28 September 2016: I was in the city of Adelaide, and I watched as the dark clouds came progressively closer and lower. We had an unseasonably dark afternoon.

The Hon. A. KOUTSANTONIS: Point of order: can I inquire as to what this has to do with a binding rate of return?

The SPEAKER: I have the point of order. At this stage, I do not uphold the point of order. The member is speaking about energy and terms around energy, but I do expect him to return to the substance of the bill reasonably soon.

Mr TEAGUE: I take and note the point of order that has been so hastily raised by the member for West Torrens on the other side. I am sure he does not like to hear about history in this state when it comes to energy reliability and affordability, particularly reliability. It is very much what this bill is all about—

Members interjecting:

The SPEAKER: Order!

Mr TEAGUE: —because the member for West Torrens—

Members interjecting:

The SPEAKER: Member for West Torrens, please do not interject—also the member for Hammond. I am listening to the member for Heysen.

Mr TEAGUE: —was responsible.

The Hon. A. Koutsantonis: Been busy on the board, have you?

The SPEAKER: No, I have not been busy running the board.

The Hon. A. Koutsantonis: I wasn't talking about you, Mr Speaker. I was talking about the member for Hammond.

The SPEAKER: Member for West Torrens, please do not interject. Thank you.

Mr TEAGUE: He may wish to cause, as is oft his wont, a great deal of noise and fury and interruption with a view to preventing a proper analysis of what has transpired in this state over recent years. He may wish to do that. He may prefer not to sit silently and hear the facts about the environment which he presided over in recent years. However, 28 September 2016 is a day that I, like many South Australians, will forever remember in terms of where we were and what we did over the period of those several hours, because on that day was a most unusual event worldwide but particularly in First World countries and certainly in this country—the entire state of South Australia was plunged into darkness.

It was plunged into darkness as the result of our energy systems in this state—our electricity grid and the systems that were in place and presided over by the government of this state—failing South Australians. Our state was plunged into darkness. I note that a couple of really remarkable things ensued. Firstly, we saw the demonstration of the wonderful spirit of South Australians in terms of cooperating with what was an unprecedented difficult situation over the ensuing hours.

We saw people doing their best in an orderly way to make their way to their usual transport arrangements to get home. We saw people cooperating at intersections that were no longer functioning. We saw people doing their best to cope with the situation in which mobile phone towers gradually turned off as their batteries expired.

The Hon. A. KOUTSANTONIS: Point of order, sir.

The SPEAKER: There is a point of order, member for Heysen.

The Hon. A. KOUTSANTONIS: Could I ask you to bring the member back to the bill?

The SPEAKER: The member for West Torrens raises a fair point. I do expect the member for Heysen to come back to the bill pretty soon.

Mr TEAGUE: Thank you, Mr Speaker. I address, fairly and squarely, the bill that is before the house.

Members interjecting:

The SPEAKER: Order!

Mr TEAGUE: I encourage all of us, both on this side of the house and on the other side of the house, to look very closely at the importance of the National Electricity Law and at the arrangements that are set in place nationally as the result of this bill. They are all parts that contribute to the whole. In addressing the reasons why this is so important, it is in my view so important that we reflect on the sorts of things that can go terribly wrong when we do not have competent administration of our energy assets—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The member for West Torrens is called to order.

Mr TEAGUE: —in this state.

The Hon. D.C. van Holst Pellekaan: There are many reasons why this is necessary.

The SPEAKER: The minister will not interject, thank you.

Mr TEAGUE: There are so many reasons indeed why this bill is necessary—

Members interjecting:

The SPEAKER: Members, left and right, I ask you to remain quiet so I can hear the member for Heysen.

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Members will not interject!

Mr TEAGUE: —and it is so appropriate that we are here now as members in this house, on all sides, in furious agreement about the need for these reforms now to be advanced, including the member for Enfield, the member for West Torrens and, I presume, the member for Giles. As usual, there are very few members on the other side who are in the house to participate in the debate. However, I am so glad that we hear about their furious agreement with the government's good work in advancing the agenda in this area, because their legacy is not one of which any of us ought to be proud.

I highlight a couple of the silver lining aspects of what happened on 28 September 2016 for the reason that we, in this place, are legislating in the best interests of all South Australians, the South Australians who in the evening hours of 28 September 2016 made their way home. They listened to their battery-powered radios—

The SPEAKER: Member for Heysen, respectfully, I have given you five minutes to talk about the events that occurred that you are referring to. Will you please bring it back to the bill? Thank you.

Mr TEAGUE: I thank you, Mr Speaker, and I do so. I wish also, as well as acknowledging the wonderful spirit of all South Australians, to pay tribute to and acknowledge those people who worked so tirelessly in the hours that followed those precipitous events in the afternoon of 28 September 2016 to bring back power, to make sure that our power assets were restored as quickly as they humanly could be. I think it is acknowledged across the board that we demonstrated that we have people in this state with great technical ability to be able to respond to even the most difficult and trying of circumstances—indeed, the most unprecedented of circumstances—in which an entire state was without power.

The SPEAKER: The member for Enfield has a point of order.

The Hon. J.R. RAU: Yes, the point of order, Mr Speaker, is relevance. Given that the compelling oratory we have heard so far has persuaded the member for West Torrens to tap the mat, we are not hearing anything new. The member for West Torrens conceded to me this morning that he was ready to vote in favour of this—

The Hon. D.G. PISONI: A point of order, Mr Speaker.

The SPEAKER: I have the point of order, which is relevance. A point of order on the point of order, minister?

The Hon. D.G. PISONI: This is not a point of order: this is a speech. If the member wishes to speak, he can—

The SPEAKER: I have the point of order. I have given the member for Heysen from the 18th minute to the 12th minute to come back to the substance of the bill. I respectfully ask him to do that, please.

Mr TEAGUE: I thank you, Mr Speaker, and it may have been remiss of me to be slow specifically to do so. Having highlighted the two areas that I wished to address, both the people of South Australia and those technical experts who worked so hard, I wished not to leave that particular topic hanging. The bill is providing for the—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The member for West Torrens is called to order.

Mr TEAGUE: I am reminded that events in Port Augusta and, indeed, the acceleration of the destruction of energy assets in Port Augusta is another reason why, when it comes to applying a binding rate of return, we are not going to see too many binding rates of return on assets that have been destroyed in circumstances where a very small and practical investment could have ensured that outcomes for everyday Australians were favoured over ideological steps and photo opportunities as we saw under the previous government. That is not so under the new government.

What South Australians will see, which is both the subject of this bill and in all areas of energy management in this state, is legislation and management according to two principles; one will be that we will be oriented towards ensuring that measures are in place to cooperate nationally to ensure that we provide reliable and affordable energy to all South Australians. Unlike the previous government, which seemed to obsessed with ideology, messaging and inputs, this is a government which is concerned with practical outcomes for all South Australians.

We will talk about outcomes because we intend to ensure that if we take a measure by legislation it will be directed towards a practical outcome. We will compare, as I have attempted to do, some of the outcomes we saw over previous years under the former government with those that this government's legislation is directed towards ensuring—that is, reliability and affordability of power and energy for all South Australians.

What we see in the bill is, firstly, important amendments to the National Electricity Law in part 2 and, secondly, a division 1B inserted that provides for a rate of return instrument. These structures will be the subject of national agreement. This is in line with the approach this government has taken so as not to create an island in South Australia, an island excluded from the rest of the national energy market, but rather a state that ensures it interacts with the national energy market in a rational way.

We have seen that those opposite are capable of interacting in a debate that contemplates rational interaction with a national market. We have seen that because over many years those opposite have advocated for what makes sense on the merits, and that is efficient and thoroughgoing interconnectivity with the rest of the country—with New South Wales and with Victoria in the east—to ensure that the substantial capital investment that has taken place in recent years in this state, in terms of wind and solar assets in particular, is able to be fully utilised in the national energy market, rather than sitting there overproducing on a sunny, windy day and underproducing on a dark, still day, a day when the wind does not blow and the sun does not shine.

On this side of the house, we understand what the merits of the debate are all about, how to achieve an outcome in the most rational way, and we will continue to take steps and adopt measures necessary to produce that rational outcome. We will not give in to some sort of jingoistic notion that we in South Australia would be better off going it alone, excluding ourselves from the benefits of a flow-in and flow-out situation. Indeed, that is the story the rest of the world tells us as well.

Different parts of the country will have different assets that are on stream and able to produce energy at different times. We intend to rationally go about making the best of those assets. I could talk further about other measures to make the best of a capital investment in those assets, but time does not permit, the short time allowed this morning to debate these matters.

Of course, we have seen the promised rollout by the new government of a battery storage program and our significant investment in that area—again, directed towards ensuring that outcomes are merits driven. The national energy market is something we ought to be participating in and, where there are national schemes we can sensibly participate in so as to advantage South Australians, we will do so.

The last thing that South Australians will see from this government is any endeavour, whether by rhetoric, by policy or indeed by legislation, that will set them on a jingoistic path, on an isolated path, or on a path that would set up South Australia as an island separated from the national energy market, as indeed the previous government was well on track to doing.

I know—at least, my optimistic self fervently hopes—that the member for West Torrens did not believe a word of what he began to embark upon in the dying years and months of the previous government in talking about the notion of South Australia as an island separated from the rest of the nation. We all know there is no merit in such separation, and it is to the lasting credit of South Australians that they saw through all that and elected a new government, kicking out the old government at the last election.

It is in no small part for reasons such as this: South Australians want a practical, outcome-driven government enacting legislation that is going to operate in the best interests of them all. When it comes to energy, energy pricing, energy assets and how they are deployed in the interests of South Australians, they want a government that is focused on delivering for them. South Australians want a focus not on sending esoteric ideological messages, not on gimmickry, not on creating a headline for the sake of the day's news, but on ensuring that we have a robust, thorough national energy structure.

We will ensure, insofar as we can, that we create an environment in which those who would invest could do so with confidence, and that those who would require the use of commercial or domestic energy in this state could obtain it reliably and at the best possible price. This legislation is no exception. It will ensure that we are part of the national energy scheme in a sensible way. I am glad to hear that this is supported by all sides, and I commend the bill to the house.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (11:28): I rise on behalf of the government to close this up. I will be fairly swift. I thank all members who have contributed to the debate so far, and I would particularly like to recognise the member for Heysen. I am not sure how he fit so much into so little time in his contribution. The member for Heysen clearly understands that one of the important aspects of this bill is to give certainty to the regulator, asset owners and all the way through to electricity consumers—more certainty than they have at the moment.

As humans, we are practical and we like a bit of certainty—or, at the very least, reliability—in our lives. This is absolutely true when it comes to the supply of electricity. The member for Heysen did an outstanding job linking consumer uncertainty with regard to the reliability of electricity with this bill. They did have some certainty in previous years, under the previous government, with regard to regularly increasing electricity prices. We want to provide more certainty.

It is important that the AER has a binding rate of return instrument. It is important because it essentially streamlines the process for their determinations. I accept that industry (i.e. asset owners or potential asset developers) is not overly keen on this. That is largely because it takes away a bit of their flexibility and not necessarily their flexibility on the rate of return that they will get in the end, but their flexibility to argue for a particular rate of return.

Of course, it is natural that the asset owner would like a higher rate of return and that the consumer, who will bear the cost of that rate of return, would like a lower rate of return. It is the AER's obligation to make the determination, so I think that giving them this instrument is important so their regulatory determinations can be sped up.

I want to put on the record my thanks to the COAG Energy Council. Before the last state election, a member of the council was the previous state Labor government, which, as a participant in the COAG Energy Council, brought this through the normal processes to our parliament. I put on the record again my thanks to the shadow minister for energy for his commitment to always vote in support of bills that come to this parliament from COAG.

He has made it very clear that, if he has a different opinion, he will share his opinion, but that he and his Labor Party will always vote in support of bills that come here from COAG. I think that is worth acknowledging. I appreciate that. That is what I did when I was a shadow and I appreciate that he has said he will do exactly the same. There are a couple of key features I would like to make very clear for people who are following this debate.

This in no way summarises the bill or the process at all, but it is important to point out that, in making an instrument, the AER must have regard to revenue and pricing principles, so this is not about the AER just trying to have the rate of return as low as possible. There is a range of practical reasons. If they did that, they probably would not get investors, but, given that consumers pay that rate of return indirectly, it is important that they have regard to both revenue and pricing principles.

Also, the AER is only able to make a binding instrument if it is satisfied that it will, or is likely to, achieve the National Electricity Objective or the National Gas Objective. Again, that does not cover all aspects of the bill, but they are two key features that I think are important to highlight.

I would like to again thank all those members, including opposition members, who have spoken on the bill. I would like to thank my officers, who have been part of this process from start to finish, and also my staff for their support.

Bill read a second time.

Third Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (11:33): I move:

That this bill be now read a third time.

The Hon. A. KOUTSANTONIS (West Torrens) (11:33): What we have just witnessed is a disgrace. The bill had bipartisan support and could have passed the parliament over a week ago and been in the upper house already. The bill will lower prices and have a great impact on the ability of the regulator to control the way companies have attempted to gouge South Australians and indeed Australians, but instead the government adjourned the debate last Thursday when parliament last sat just so we could hear the contribution of the member for King, which was a rambling mess, and the contribution of the member for Heysen, who knew nothing about the bill. What a disgrace and waste of the taxpayers' time and money.

When they reread their contributions in Hansard, I hope that members opposite are able to justify to their constituents the one-week delay in passing the bill for those two contributions. What an outrage. What an outrage to have the member for King rambling in this parliament with nothing about the bill and the member for Heysen getting up and pretending that he knows anything about a binding rate of return or the COAG process that led to this bill.

The Hon. D.C. VAN HOLST PELLEKAAN: Point of order, sir: I ask you to bring the member back to the substance of the bill, not the substance of other members' contributions and not his judgements.

The SPEAKER: The third reading debate is a little bit more restricted than the second reading debate. The member for West Torrens does know that.

The Hon. A. KOUTSANTONIS: Isn't that fascinating, Mr Speaker?

The SPEAKER: I ask you to respectfully—

The Hon. A. KOUTSANTONIS: Respectfully—the way I respectfully sat through that rubbish.

The SPEAKER: I have not finished—one moment. I understand that the member for West Torrens may have some preamble, but then I will ask him to come back to the bill, as I asked other members. Thank you.

The Hon. A. KOUTSANTONIS: The opposition indicated over a week ago its unanimous support for this bill. Last Thursday, when parliament last sat, the opposition told the chamber we would support the passage of this legislation through all stages, and the government adjourned it so we could have two more speakers, the member for Heysen and the member for King. Those contributions were not oratory; they were rambling messes. They have delayed the passage of this bill. I support the third reading and I support the passage of the bill, unanimous through both stages through the upper house. Stop wasting everyone's time.

The SPEAKER: Minister.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (11:35): Certainly the government did say that we would support this bill and certainly the opposition did say that they would support this bill, but for the shadow minister to assume that then means that it precludes any member of this parliament making a speech, as that member sees fit within the standing orders, is extraordinarily arrogant. It is extraordinary, Mr Speaker—

The Hon. A. Koutsantonis: No, it's arrogant to waste the time given to the parliament.

The SPEAKER: Member for West Torrens!

The Hon. D.C. VAN HOLST PELLEKAAN: It is extraordinary that the member for West Torrens—

The Hon. A. Koutsantonis: You didn't even turn up for the debate. You weren't even here.

The SPEAKER: The member for West Torrens is warned for a second and a final time.

The Hon. D.C. VAN HOLST PELLEKAAN: It is extraordinary that the member for West Torrens thinks that just because he has—

The SPEAKER: Minister, please do not respond to interjections. This is a third reading speech, please.

The Hon. D.C. VAN HOLST PELLEKAAN: Thank you. I have not responded to one interjection yet.

The SPEAKER: Good.

The Hon. D.C. VAN HOLST PELLEKAAN: It is extraordinary that the member for West Torrens thinks that because he has made up his mind on the bill, because the two major parties have declared their positions on the bill and because he has had his second reading speech, that is all that needs to be done and that any other member who wants to have his or her second reading speech has no right. Every member here has a right to make a speech within standing orders as they see fit. I support the third reading of the bill.

Bill read a third time and passed.

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