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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2021-08-25 Daily Xml
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Emergency Management (Electricity Supply Emergencies) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 5 May 2021.)

The Hon. A. KOUTSANTONIS (West Torrens) (20:05): I can inform the house that I am the lead speaker for the opposition. It seems I have missed some excitement in the parliament. It is always good to see a bit of excitement in the parliament, a bit of movement in the corridors of power. It is always impressive.

The general thrust of this legislation is this. There are multiple acts that allow the government to act in an emergency to maintain our energy supply, and what the government is seeking to do here is to streamline, I understand, their relative powers within one umbrella under one act. That is to be congratulated, and the opposition is supportive of that measure, so I can say to the parliament that we will be supporting this legislation.

However, I have lodged an amendment, and that amendment I will describe this way. The government wants the ability, in order to stabilise the grid in terms of an emergency, to turn people's solar panels on or off. Mr Deputy Speaker, welcome back to the chair. It is always reassuring when you are here.

What the government is attempting to do, which I think has a basis in merit, is to be able to allow a greater cohort of people to be designated as electricity generators, to be under the instruction of the minister or designates, as it were, and to be able to turn solar panels on and off. The minister can now, technically, instruct AGL to operate or not operate, solar arrays to operate or not operate, Origin, any other large-scale thermal production or renewable energy assets.

What he is also seeking to do in this legislation is give himself the ability, in the name of system security, to turn off people's solar panels at their homes. That has a twofold effect. Solar panels on your home are not just about the feed-in tariff that you receive; they also offset your power use. In our household, we have solar panels. I am an unashamed supporter of solar energy.

For example, I can either rely on my solar panels to feed into the grid and pay me my 16¢ feed-in tariff or I can offset my use by, perhaps during a damp day which is still sunny, running the dryer or running the dishwasher, running household appliances during the day rather than at night, to offset the cost. What the minister's legislation does is give the ability to the government to turn that off without any consideration of the household's investment in solar energy.

Now we get to the pointy end of this legislation. Does the government have a right to turn your solar panels off when, if they do, you lose revenue and you lose the ability to use your solar panels to offset your use? There is a cost to the householder; you have made an investment. The government's argument, I think, is this: solar energy produced at the home is sold compulsorily. It is the equivalent of, 'Well, I am growing tomatoes in my backyard' and forcing all your neighbours to buy them, regardless of whether they want tomatoes or otherwise.

The government are saying in the name of system security, through those rare periods when there may be the need to turn solar energy off on household homes, this process streamlines it. My amendment says we will give the government the power to do that, but whoever is instructed by the minister to do this must compensate the householder for the time that their solar panels are turned off, but not just for their solar feed-in tariff, but for their offset use as well.

My plea to the House of Assembly tonight is: treat household solar investors in the same way you treat AGL and Origin. If the minister instructs Origin to turn on, or AGL to turn on their power plants, in the name of system security, they are compensated. Why not then pay households that are instructed to turn off? Pay them what they would have expected to have earned or what they would have expected to offset if they are turned off. The government make no such proposal.

The government are doing this, I think, in a manner that creates sovereign risk, because households have gone out in good faith and put solar panels on their roofs. Solar panels have come down in cost considerably, but they are still expensive. The average array could be anywhere between $2,500 to $10,000 depending on the size of the capacity of the solar array. If you put a battery on board as well, costs increase there as well, and the government are shrinking that subsidy. The government have their reasons for shrinking that subsidy. We disagree with it, but that is their point of view.

My argument to the House of Assembly is: why does AGL, which runs Torrens Island, or any other large-scale thermal capacity generator, get paid when they are instructed by the operator or the government to do one thing or another, but households do not? To me it does not seem fair. The amendment that I have lodged deals with that issue.

I hope the government can see their way to supporting this amendment. I suspect that they will not, and that the government will oppose this legislation, but I do point this out: I think the statistics are now close to one in three South Australian households have solar panels. One in three. The one in three solar households who have put solar panels on their roofs are right to ask this fundamental question: 'Why wasn't I told when I bought my solar panels, and when I invested my money in my solar panels, that there would be a differential rule for me to other generators in the NEM?' That is inequitable and unfair.

If you want to be equitable and fair in this debate, then what you do is you treat them all the same. Let's be clear about this: the minister is on the record as saying that he anticipates the times that people's solar power panels may be turned off during a period of system security emergency will be small and rare. Maybe; we do not know. Let's say the minister is right. If the minister is right, then the cost is negligible and no-one is worse off. If the minister is wrong, and it is for extended periods of time, not only is the minister rendering the feed-in tariff to that consumer and investor gone as a loss but he is also saying to those households, 'You cannot offset your power.' That is my concern.

My amendment was drafted quite carefully by parliamentary counsel—the oldest chambers in South Australia, just as a point of note. I think they have done an exceptional job at trying their very best to navigate this very complicated path. My amendment would give the minister and the government the ability to do what it is they want to do for system security but at the same time protect the one in three households in South Australia who are saying, 'Well, I have just spent $10,000, $5,000, $2,500 on a solar array. What gives the government the right to turn off my solar energy, not only as a feed-in tariff but to use offset at my home or to charge my battery, in the name of system security without compensation?' Other retailers are compensated. I do not know what the minister's view is on my amendment. I assume he is still opposed, which is understandable. I hope he sees fit to support that legislation. I think that would make this legislation's passage a lot easier.

Apart from that, I think the rest of the proposed legislation is common sense. The government have gone through a good process to get to this point. They have done a discussion paper, they have opened it to consultation, they have sought advice from interested stakeholders and they have given the opposition ample time to develop amendments and consult on those amendments. I thank the government for that, and I thank the minister for that. It is a very cooperative way to do legislation.

We are at this point now where I think the minister and the government may want to consider accepting our legislation. If we are unsuccessful in this place, I can foreshadow there will be amendments moved in the other place. Perhaps it would be better to accept them now rather than accept them later and lose the ability of the minister to use the security measures that he sees fit.

With those few remarks, I do not want to delay the house any further other than to thank my colleagues, parliamentary counsel, the minister and the minister's office for their extensive briefings to the opposition on this matter. I commend the amendment in the committee stage, so I am foreshadowing I would like to go into committee forthwith to move my amendment. I foreshadow the opposition will be supporting the legislation, but we will be supporting it with amendments.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (20:17): I thank the member for West Torrens for his very straightforward summary of his views. Yes, we have certainly done everything that we can to make sure that all members of the opposition and anybody else who is interested has been fully consulted and got as much information as they want.

I also appreciate the fact that the shadow minister has said that, barring his amendment, he thinks this is actually good legislation and a sensible thing to do. I never like to make too many assumptions, but I take from that that, in addition to his comment on behalf of the Labor Party that they will continue to seek to try to get this amendment up in the other place if it does not happen here, simultaneously, if they do not get the amendment up, they would still support this legislation because, broadly speaking, it is very simple.

We will get the chance to talk about this more in the committee stage, but let me just make it very clear that certainly the government will be opposing the proposed amendment. It is not because we have any philosophical objection for trying to compensate people if emergency powers need to be used—it is not that at all. It is actually just that the amendment is unworkable and would push up electricity prices.

The amendment suggests that for any household that has its power turned off because of these emergency energy powers, if they come into effect, that house would be compensated by an amount calculated as the average feed-in amount for a day that the house feeds back into the grid, times the average feed-in rate that the house gets, times the number of days rounded off to the next highest whole day—all of that, doubled.

If we just put aside for a minute whether that is a fair level of compensation, so that if a household has their electricity turned off for, let's say, two hours and they miss out on their feed-in tariff for two hours, they would get what their normal feed-in tariff would be for 24 hours instead of two hours, and then doubled again.

But if we put that aside for a second, there are a couple of other very serious problems. One is that it would be nearly impossible for the distribution company or the market operator—whoever the right organisation might be—to actually keep a system in place to firstly build a system and then secondly maintain a system. So that of the approximately 780,000 retail residential electricity customers in the state, of the approximately 35 per cent of them who have solar panels and are receiving the feed-in tariff, to keep a system that keeps track of what is their average daily amount fed into the grid, and as suggested by the amendment, as determined in the previous billing cycle, we would have to keep that up to date.

If a household's regular feed-in changes, if their way of working changes, that would need to be kept up to date. What their feed-in tariff rate is would need to be kept up to date. If they change retailers or the retailers change their rates—we could set this all up hypothetically on one day but in three or four or 10 years' time, when the emergency powers might be enforced, we would have to have kept this system up to date all the way through.

It is just flat-out not workable. The idea that this could be done is crazy. The idea that it could be kept up to date is crazy. The idea that without doing this it would be possible to provide this compensation to a household within 30 days is impossible if this work is not done. As well as that, the cost of doing all of this is going to end up being borne by electricity customers. It is unworkable and it would drive the cost of electricity up. The principle of saying, 'Wouldn't it be nice to compensate these households?'—sure. The proposal that is here is actually very unworkable.

I also have to contradict the shadow minister on a couple of things that he just said. If large generators are turned off under these emergency powers, they do not get compensated. They do not get compensated if they are turned off. To suggest, as the shadow minister did, that households need to be compensated because the large generators are compensated is just not true. They do not get compensated.

Secondly, the suggestion of sovereign risk is also untrue. As various levels of control or potential control have been brought in, with regard to solar panels, residential household solar panel feed-in, with people knowing that these things exist the take-up of solar is actually increasing. The take-up of solar is growing. When households that are considering taking up the solar, knowing that these types of things exist, they actually continue to take it up even more quickly than before these things existed. I am not suggesting they are taking solar up more quickly because of these types of protections, but clearly these types of protections are not impeding any take-up of solar.

If we put aside the fact that it would be completely overcompensating anybody—just put that aside for a minute—the proposal is actually completely unworkable. We expect these powers to be used in cases of emergency. We expect that they might be used once every few or several years. I am sure everybody in this place would agree: the less they are used the better. Ideally, never.

It is the idea that you would keep a database up of every single household in the state that has solar and that you would maintain that database as their feed-in tariffs change and as their volumes of feed-in change, etc., so that one day, in three or five years or however many years it happens to be, this is necessary. We have maintained a complete database so that the subgroup of houses that might be affected by these emergency powers could be compensated for the cost of doing that. Unfortunately, under this proposal it would have to be shared by all houses, and it would mean that the total cost to electricity consumers would be well in excess of any compensation that would ever be received. It would push the cost of electricity up.

Lastly—because we will get the chance to go into more detail during the committee stage—these powers would only ever be used to protect electricity consumers from a far worse type of outcome. These powers would be used to stabilise the grid. Hypothetically, it might be that a certain number of households need to have their feed-in curtailed so that a much larger group of households do not get blacked out and/or curtailed.

Is it true to say that, if these powers were used, the subgroup of houses that might have their feed-in curtailed would miss out on the money that they would otherwise have earned for that period of time? Well, yes, that is true. Is it true that the member opposite and the opposition, the Labor Party, want to compensate people for that? Yes, that is true. But is it true that this is a sensible way to do it? No, that is not true.

These are not powers that target households with solar panels. If these powers were ever needed in a declared energy emergency—not just because somebody felt like doing a little bit of tweaking with the system and not because somebody just wanted to optimise a declared energy emergency—then the subgroup of houses missing out on the amount of feed-in tariff for the time that they might be curtailed is, I suggest, an insignificant cost compared to the cost to those same households—and definitely many more; potentially all the households in the state—if the powers were not used. It just does not balance out.

The government will certainly be opposing this amendment. I seek the support of all members of this house to oppose this amendment. I say lastly, just to reconfirm, because the member for West Torrens was in conversation and might not have heard what I said, that other generators, the large industrial generators that might also be impacted by this, do not receive compensation.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. A. KOUTSANTONIS: The minister said in his remarks that AGL is not compensated for system security events. If AGL is instructed by the market operator or the minister to operate units for system security, does he maintain his position that they are not compensated under the National Electricity Rules?

The Hon. D.C. VAN HOLST PELLEKAAN: I confirm what I said before. As I have checked with the adviser, whom we both think so highly of, yes, if AGL or any other large generator is directed to turn off, stop generating, under these emergency powers there is no compensation.

The Hon. A. KOUTSANTONIS: Are they then compensated?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that there is no compensation provision to turn on or to turn off.

The Hon. A. Koutsantonis interjecting:

The ACTING CHAIR (Mr Cowdrey): Member for West Torrens, let the minister provide his answer to your question. This is your second contribution of three.

The Hon. D.C. VAN HOLST PELLEKAAN: There is no compensation under those circumstances, whether the generator is required to turn off or required to turn on under these emergency powers.

The Hon. A. KOUTSANTONIS: I did not ask you about these emergency powers, minister. I asked you about under the National Electricity Rules. If AGL is asked by the operator to turn its generators on, is it compensated?

The Hon. D.C. VAN HOLST PELLEKAAN: There are provisions for that sort of thing outside this legislation. We are here debating these emergency powers in these proposals. Under these proposals there is no compensation—that is what we are debating here.

Clause passed.

Clauses 2 and 3 passed.

Clause 4.

The Hon. A. KOUTSANTONIS: I move:

Amendment No 1 [Koutsantonis–1]—

Page 4, after line 9—After subclause (5) insert:

(6) Section 27C—after subsection (7) insert:

(8) If a prescribed designated person directs, or exercises its authority over, the operator of a qualifying generator (a relevant requirement) such that—

(a) the operator is required to cause or permit the qualifying generator to be disconnected from a distribution network; or

(b) the generation, use or export to a distribution network of electricity generated by the qualifying generator is limited or prohibited,

the prescribed designated person must pay the operator of the qualifying generator compensation in accordance with subsection (9) within 30 days of the day on which the relevant requirement ceases to have effect.

Maximum penalty: $1,000,000.

(9) For the purposes of subsection (8), the amount of compensation payable to the operator of a qualifying generator is double the amount determined by multiplying—

(a) the average daily feed-in amount; by

(b) the average feed-in price; by

(c) the number of days for which the relevant requirement has effect (rounded up to the nearest whole day) or, if a relevant requirement has effect for less than one day, by 1.

(10) In this section—

average daily feed-in amount, in relation to a qualifying generator, means the average daily amount of electricity fed into a distribution network by the qualifying generator for the billing period immediately preceding the period in which the relevant requirement is given to the operator of the qualifying generator;

average feed-in price, in relation to a qualifying generator, means the average amount paid (commonly known as the ‘feed-in tariff’) for electricity fed into a distribution network by the qualifying generator for the billing period immediately preceding the period in which the relevant requirement is given to the operator of the qualifying generator;

distribution network has the same meaning as in the Electricity Act 1996;

prescribed designated person means any of the following (including their respective successors or assigns):

(a) AEMO;

(b) ElectraNet Pty Ltd;

(c) SA Power Networks;

qualifying generator has the same meaning as in section 36AC of the Electricity Act 1996;

relevant requirement—see subsection (8).

The point I made to the minister and in my remarks is that, under the National Electricity Rules that currently stand, generators that are asked to operate, generally that are directed to turn on for system security, are compensated. The point I make to the minister is that he is bringing in a new set of rules and this new set of rules imposes a condition on people who have made investments.

I am not disagreeing with the need for the minister to have these powers, not for a moment, but the minister made two comments in his closing remarks that I think are contradictory, and I say that with the utmost respect. He said that, first, it would be impossible to keep records. From my understanding, electricity operators are under legislative requirement to keep detailed records of electricity use for their customers and their feed-in tariffs for a period of time and, secondly, it would be very expensive on householders. Yet he then says that this would be a rarely used event that could last only moments or a few hours. If it is only a moment or a few hours and it is used rarely, how could it possibly be a massive expense on the broader grid?

I do not doubt the minister's intention. The minister is doing all he can to try to minimise the cost on consumers. What I am saying to the government is that they are imposing a new set of rules on a group of people who bought equipment in good faith under the certain set of rules that were in place, with no warning, no sticker at the point of purchase saying, 'At any time, the government can turn this equipment off or have an agent turn it off and that, when it is turned off, not only will you lose your feed-in tariff but you will not be able to offset your own power use.'

The government maintains its right to do that. I accept the parliament's ability to do that, but my point to the government is that that is the very definition of sovereign risk. That is the very definition of the government using the power of this parliament to change what was before an expected right. Anyone who bought solar panels before the government announced this change would have expected that, when they put solar panels on their roof, any excess energy they had would be sold into the grid. There was no warning that would change.

What I am saying is that there should be a compensation. If the government disagrees with that that is fine. The government is entitled to disagree with that principle. The opposition's principle is that this is the very definition of sovereign risk. This is telling a group of people who are conducting an activity lawfully, who paid money to have those solar panels installed on their roofs, that if you do it now we can change the way they operate by instruction for system security—whatever the reason is. That is fine, but another set of people doing exactly the same thing, under a different set of rules but operating in the same grid, in the same system, can be compensated. That is inequitable.

The minister is right: under this legislation no-one is compensated, but the minister can use other legislation to instruct generation on or off where compensation is payable—but not for household solar. That is my point, so I do not see this as being an equitable outcome. I do not expect to win this amendment. I expect the government to carry the day on this, and I will move it again in the upper house, and they may carry the day again and we will take this to the election.

My view is very simple: if you put solar panels on your roof and the government changes the rules midstream you should be compensated. It sounds fair. That is what we do with anyone else. I am not sure why people who have solar panels on their roofs are treated differently. I am not sure why, if AGL are instructed to turn generators on when they normally would not have them on, under a different set of rules they are compensated, but households are not. That is the point the opposition makes. I accept the government's position. Maybe we are just better off having a division.

The Hon. D.C. VAN HOLST PELLEKAAN: There was a lot in that. There were some specific questions that I will try to address as clearly as possible. If I forget one just let me know. There were also some comments.

This is not actually about the principle of the compensation. This is just an unworkable set of procedures. One of the things in here is that it suggests the compensation would be paid within 30 days. To pay it within 30 days, you would need to have all that information very readily available, and it would be an expensive business to keep it readily available 365 days a year for all those hundreds of thousands of households so that, if and when the unpredictable emergency eventuates, and if the powers are needed, then within 30 days from there you could actually apply this.

So it is unworkable. To do that—I do not know if I used the word 'impossible', but if I did, so be it. 'Impractical' is probably what I really had in my mind. Nothing is impossible, but it would be incredibly expensive to do it, and then that cost would be pushed throughout all the consumers.

Regarding the suggestion of the compensation under emergency powers, there is no compensation for the big generators, and there is not proposed to be for the small generators. But perhaps the most important point here is—and this comes to the member's comments about sovereign risk and people having invested, so you change the rules after they have invested—as I said before, people knowing about these types of rules are still continuing to invest. So I think it would be fair to assume that if people are still choosing to go into the purchase—and I accept a very hefty purchase for most households—knowing about this, it is probably not an unreasonable imposition on the ones who already have it.

Perhaps more importantly this is about emergency powers. This is not about business as usual. This is not about, as I said before, somebody just trying to tweak the system or trying to optimise the system or just thinking, 'We can see we could get a little bit more, a little bit less over there.' If an energy emergency is declared, then these powers may or may not be used. There are already some powers and, in my relatively short time as an energy minister, I have declared an energy emergency once, but we did not actually need to use any of the powers.

The only reason I say that is that it is not as if you have what looks like an emergency, then maybe you move on to declaring an emergency, and then maybe you move on to using the powers. It is not automatic that you go 1, 2, 3. As I said, we have had a declared energy emergency without using any of these powers. The real point here is that if these powers are used—and let's say for this part of the argument it is the consumers who have household solar and that subgroup of those ones who might be switched off—the consumers, even without compensation, are much better off than if the emergency powers were not used and the emergency just worked its way through the system.

The emergency powers are used to protect consumers. It is most likely that, if these powers were required and not used, those households, instead of being directed to turn off so that others could be protected, would just be blacked out. They would miss the opportunity to collect their feed-in tariff anyway, so they are actually better off than they will be if we do not use the emergency powers.

I accept the shadow minister's suggestion that if it happens to be in the middle of the day, and it happens to be that the house is feeding into the grid and if it happens to be that they miss out on some of their feed-in tariff, which for most homes might be—and I will look to my trusty adviser—a few dollars? Yes. The last time not emergency powers but similar powers were used, I am advised, it was an average of a dollar per household.

So let's just say it was the middle of the day and minimal electricity was being used and power was going back into the grid and it went for a few hours, well, it might be in the order of a few dollars or several dollars, I am advised. I do not think it is unfair for me to say that if they miss out on those few to several dollars because these powers are invoked because it is necessary to do so, those households are still much better off than if the powers were not invoked because, at the very least, they would be blacked out anyway—they would not be getting the feed-in tariff regardless—and at worst there might be a much more serious impact on our grid more broadly than if the powers were used to protect them or at least to minimise the impact on them. For those reasons, I do not accept the proposal from the member opposite.

The Hon. A. KOUTSANTONIS: The minister again I think has contradicted himself. In one breath he says that this will be an extraordinary cost on South Australian consumers, then he says the cost will be minimal—one or two dollars per household. The principle of the matter is this: under emergency powers under the National Electricity Rules, generation can be directed to be turned on to stabilise the grid and they are compensated.

It is pure and simple: AEMO direct generation on as they do regularly in South Australia for system security. They do so and we all pay for the cost, and the minister has not complained about that once. In fact, there is no legislation before us to stop AEMO passing on their costs for their system security measures to have thermal generation on to synchronise the grid—not once in three years. Yet when I say, 'When you turn the solar panels off on people's households for system security, compensate them,' he says, 'One or two dollars per household is an extravagant cost.'

The FCAS cost and the other costs across South Australia for turning generation on to stabilise the grid every year is in the millions. I take the minister's point, but all I am arguing is let's be consistent here. If under one set of rules, generation is directed on—even though when it is not commercial for it to be on it is directed on to stabilise the grid, that is an emergency measure, any way you look at it. They are compensated for having to generate electricity when they did not want to, when it is not commercial for them to do so. But they generate it on because they provide services to the grid that are not necessarily there.

At the same time, the minister is now passing legislation that allows him to turn off generation that is destabilising the grid to stabilise it but he does not want to compensate them. If it is good enough for one group under a different set of rules, it is good enough for this group under this set of rules. So like I said, the opposition stands by this proposition that if you make an investment in an asset that is in your house you should be entitled to use it. If a government wishes to intervene to turn it off for system security, as they do under other sets of rules in the National Electricity Market who are compensated, do the same thing for households.

It does not matter that the government is bringing in a unique piece of legislation where no-one is compensated, the principle remains the same. Yes, the government is treating everyone equally in this legislation but there are other pieces of legislation that govern the way generation is turned on and off and they are compensated, so there are two sets of rules and it is unfair. So I think the contradiction here is clear: households should be compensated, the government thinks that they should not. Let's have a vote.

The Hon. D.C. VAN HOLST PELLEKAAN: Thank you. Some things that the member has just said are true, most of them I have a very strong alternative view of. First of all, I did not say anything about extravagant compensation with regard to losses of a few dollars. I am advised that it is—last time it was a dollar—a few to several dollars, so trying to paint me in that corner is completely inaccurate. I did not have any contradiction with regard to high costs or low costs. What I said is the cost of establishing a system that would be required to implement the compensation, as the member opposite is proposing, would be extremely expensive and would outweigh the benefits to consumers.

The member opposite tries to characterise this as one side wanting to compensate consumers and one side just not wanting to compensate consumers. The member no doubt took a lot of advice, put in a lot of thought, used his experience and decided very deliberately to come up with the suggestion that is in his amendment. The proposal that is in his amendment is unworkable, would push up the cost of electricity to people, and would be completely counterproductive. Whether emergency powers were used or emergency powers were not used, accepting the proposal from the member from West Torrens would cost electricity consumers, including those with solar on their roofs that feed into the grid, more than they would ever get back.

The Hon. S.C. MULLIGHAN: Unsurprisingly, I rise to speak in support of the amendment put by the member for West Torrens perhaps for the simple reason that was just given by the minister. It is completely unworkable for the network provider. It is completely unworkable for those operators of the electricity network. Is that not the entire point? Is it not the entire point that, since 2004, when South Australia first initiated providing incentives for people to take out solar, we have seen a gradual and then a headlong rush, a proliferation, of the installation of rooftop solar panels?

This is not a new phenomenon. This has been growing for 17 years now. Yes, of course it has accelerated in the last 10 and, yes, of course it has accelerated even more rapidly in the last six, but now we are at a point where we have two significant changes which have been promulgated by this minister and this government. One is to impose a sun tax on those people who have rooftop solar, a charge of up to $70 a year on top of what, as the member for West Torrens said, they have already paid to install solar panels on their roof.

So, in addition to the supply charge, which they are required to pay to their electricity retailer, they now have to pay another charge on top of the supply charge in order to ensure that they can use electricity in their own homes. So a double taxation, basically, is the principle that the Minister for Energy is now pushing.

We know that there has been no incentive to date for the network operator, SA Power Networks—previously ETSA, privatised by the political party that the Minister for Energy is a part of—to have a network which can comfortably receive the levels of solar generation which are currently being pushed back into the poles and wires by households. That is the problem that they have. What they are choosing to do is to make that problem a problem for householders, not a problem for themselves.

I realise I do not necessarily have the exact same view on this particular issue as most MPs in this place. My view is a little bit more overt and a little bit more robust than what most MPs would say when it comes to the responsibility of the network operator in this regard. If you were going to pay in the order of $3.4 billion (20 years ago) to buy these electricity assets, and you were going to run them in the way that Bruce Mountain—a national independent energy market expert—has demonstrated, making a profit in the order of $400 million per year each and every year, and that is on top of the expenditures that are required to put into maintaining that network, I would have thought there would be some obligation to make sure that your distribution network was sufficient in order to accommodate the changing needs of electricity users, householders, commercial industrial users.

Now we learn, through this series of amendments brought to this place by the Minister for Energy, that they have not been doing that to the network, that instead what they need to do is dissuade people as best they can from installing solar by threat of a new tax on top of the existing supply charge or, if they do go ahead and have solar installed on their roofs, now they are going to have the capacity to turn it off. When can they turn it off? When they believe they need to turn it off. When do they believe they need to turn it off? When it does not suit their commercial objectives. That is when they believe they will need to turn it off, not when there is an emergency, not when there is a declared set of arrangements that is entered into and agreed to between the government of the day, the minister of the day and the network operator—just when SAPN believes it is necessary.

That is why somebody in this place, and in this case it is the member for West Torrens and it is the opposition, needs to start redressing the imbalance of power in this relationship between the network operator and households. Somebody needs to start sending a message to the network operator that they need to have some skin in the game, that the hand cannot constantly be out for more and more financial reward at the cost of South Australian households.

So I am glad the member for West Torrens has brought this forward. I am glad that he is standing up for the electricity consumers of South Australia in the face of a number of assaults from the Minister for Energy. If he did not do that, then what we would see from the Minister for Energy is a brand-new sun tax on people who have solar systems, and then on top of that a threat to turn them off with insufficient compensation.

The Minister for Energy does not know—nor do I, and nor does the member for West Torrens or anyone else—the financial circumstances of households which may be impacted by turning these panels off. It would also be a ridiculous regime if we said, 'Oh, well, we will just compensate them something equivalent, in the order of what we believe their solar feed-in tariff would be.'

Let's say we have a repeat of what we saw in recent months where—what was it?—50,000 or 60,000 households were turned off through this. Let me guess: 60,000 households need to separately and individually petition the network operator and justify exactly how much they were financially inconvenienced by that action—how many hours they were out, what the generation would have been of their solar panels, what their retail arrangement is with their retailer, what the feed-in tariff is—and some sort of calculation will be arrived at. Of course, that is not what is going to happen; that is unworkable.

What is egregious for this minister to suggest is that some level of compensation that equates to a dollar or a couple of dollars is sufficient. That is not a disincentive to the network operator to not turn these panels off whenever it believes it is in its own commercial interests, and we know what is in its commercial interests: it is to keep operating the network largely as it is and not undertake those investments that are required in order to give us a modern, contemporary, capable electricity network that can accommodate the new requirements being put on it. We do not have that at the moment and that is because nobody has been holding the whip over them to get them to upgrade the network appropriately.

We went through the period between 2000 and 2010 of gold plating, and now we are through a period, it seems, where these network operators can run around to governments of the day, demand new taxes, demand new imposts on households and, from this government and the Minister for Energy, they get a big tick. Well, that has to stop.

The Hon. D.C. VAN HOLST PELLEKAAN: Unsurprisingly, I refute just about everything that the member for Lee just said, most of which actually had nothing to do with the clause or the amendment bill. He certainly falsely characterised me in many ways, which I will not go into, and certainly misrepresented me. There was one thing he said, though, that caught my attention, and that was when he was talking about Bruce Mountain. Bruce Mountain was one of the people who said that, under the previous Labor government, we in South Australia had the highest electricity costs in the world. Maybe for you, Bruce is good one day and he is not so good the next. I just thought I would put that on the record; it might be something that the member for Lee forgot.

I will stake our government's record on electricity policy and deliverables for consumers compared to those opposite any day of the week. The member opposite was talking about double taxing and blah, blah, blah: (1) it does not make sense and (2) it is just not true. The reality is that these are not powers that the distribution network operator would use; these are not powers that the transmission operator would use; these are not powers that the generators would use—these are powers that the energy minister of the day would use, if necessary, after declaring an energy emergency, if that was necessary.

That is how it works. The things that the member for Lee said are in another world—in a completely different world. I would be happy to have a coffee with him one day and talk about those things that I am sure would be of interest to both of us, but that are not relevant to this. There is nothing in this legislation that talks about anybody other than the minister of the day making a very difficult decision, if necessary, and that decision would be made with the benefit of consumers, the energy system and the energy grid at heart.

Making a decision that would be in the very best interests of electricity consumers is what this is all about and it is very clear that the proposed amendment from the opposition would harm consumers. It would push the cost up for consumers and that is why we will not be supporting it.

The committee divided on the amendment:

Ayes 18

Noes 21

Majority 3

AYES
Bedford, F.E. Bettison, Z.L. Bignell, L.W.K.
Boyer, B.I. Brock, G.G. Brown, M.E.
Close, S.E. Cook, N.F. Gee, J.P.
Hughes, E.J. Koutsantonis, A. (teller) Malinauskas, P.
Michaels, A. Mullighan, S.C. Odenwalder, L.K.
Picton, C.J. Stinson, J.M. Wortley, D.
NOES
Basham, D.K.B. Chapman, V.A. Cregan, D.
Duluk, S. Ellis, F.J. Gardner, J.A.W.
Harvey, R.M. (teller) Knoll, S.K. Marshall, S.S.
McBride, N. Murray, S. Patterson, S.J.R.
Pederick, A.S. Pisoni, D.G. Power, C.
Sanderson, R. Speirs, D.J. Tarzia, V.A.
Treloar, P.A. van Holst Pellekaan, D.C. Whetstone, T.J.
PAIRS
Hildyard, K.A. Teague, J.B. Piccolo, A.
Luethen, P. Szakacs, J.K. Wingard, C.L.

Amendment thus negatived; clause passed.

Remaining clauses (5 and 6) passed.

Schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (21:07): I move:

That this bill be now read a third time.

While there is an area of clear disagreement across the chamber, I do thank the shadow minister and those opposite for the efficient treatment of this bill in this chamber.

The Hon. A. KOUTSANTONIS (West Torrens) (21:08): I am disappointed that we were unsuccessful in our amendment. I think that this issue is not going to go away. I think that the government's claims are contradictory and I do think that there is a growing groundswell of dissatisfaction with a number of measures in this area.

At the last election, the government made a commitment that they would lower electricity prices by $302 from 2016-2017 annual prices, published by ESCOSA. The average price in 2017 was $1,976 and now it is $1,975, a decrease of a dollar. The prices have decreased by a dollar in the life of this government from their baseline promise.

The next round of ESCOSA results is due to be released on 30 August, where we will measure the government's commitment to lower electricity prices by $302. What we have seen the government do is increase prices through a solar tax on every household that has solar energy and, through new measures now, turn solar panels on or off according to the whims of the minister and on the basis of an emergency.

I accept largely the minister's argument that this is for system security and I support the minister keeping the system secure. What I do not support is a two-tier system. I do not support some generators under different legislation and a different framework being compensated for being turned on or off but households under this system that will be entirely subject to this system not being compensated. That is unfair. It is unfair on people who have been encouraged by both governments to get solar panels and batteries.

The most egregious part about this direction the minister can issue is not just that they cannot feed into the grid; it is that they will not even be able to supply their own homes with solar energy. That is the part I find most difficult to contemplate. The minister is actually saying, in an emergency system where there might be blackouts, 'I'm going to stop you from being able to use your solar panels to power your own home, let alone feed into the grid.' That is the part that many South Australians will think, 'Well, that is just unfair. That is just unfair.' The minister will make many arguments that may sound reasonable but the principle is this—

Members interjecting:

The Hon. A. KOUTSANTONIS: To members opposite, not to me—to members opposite. They claim they are doing this in the name of system security and that imposing this would be expensive yet in the same breath he says people are only losing one or two dollars for a couple of hours. Well, either it is dramatically expensive or it is not.

The retailers already have obligations under the National Electricity Rules to keep detailed records, which is how we track disconnections, how we track financial hardship. They are already made to do these requirements. It is not difficult for an energy retailer to work out what the average cost has been to compensate a householder who has had their power turned off. It is just simple principle. The government thinks it is unfair, the government are going to make their arguments. They think they are reasonable. We disagree and we will have this out at the election.

The Labor Party will be writing to people in the seats of Newland, King, Adelaide and Elder telling them that the government think it is okay to turn their solar panels off and they will compensate but, at the same time, if AGL are directed to turn on to stabilise the grid they will be compensated and those householders will have to pay for it. That is the difference.

The minister says it is unworkable and unreasonable and will increase power prices, yet at the same time the market operator every year directs generation on to stabilise the grid which we all pay for. That is okay, but if he turns power off to stabilise the grid people cannot be compensated because that would be excessive.

Why are the shareholders of Origin and AGL more important than the households of King, Newland, Adelaide and Elder? Why are they more important? They are not. The Labor Party stands on the side of those households and while the member for Adelaide was laughing, not understanding what we are actually debating right now, laughing about the Labor Party's opposition to this, we will be writing to every house with a solar panel in the seat of Adelaide, telling them exactly the member for Adelaide's view.

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: You object?

The Hon. R. SANDERSON: Point of order: the member for West Torrens is completely misrepresenting me. I was laughing at his comment that the Minister for Energy will probably make some valid statements or some convincing statements or some good comments. That was what I was laughing at—nothing to do with my electorate. He should withdraw and apologise.

The ACTING SPEAKER (Mr Cowdrey): Minister, you have taken offence at the comments. You have taken offence at the comments made by the member for West Torrens. Member for West Torrens—

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members! Members, it is a quarter past nine, please. Member for West Torrens, the minister has taken offence at your comments. Are you happy to withdraw?

The Hon. A. Koutsantonis: No, sir.

The ACTING SPEAKER (Mr Cowdrey): You do not wish to withdraw?

The Hon. A. Koutsantonis: No, sir, I do not. Can I resume my remarks?

The ACTING SPEAKER (Mr Cowdrey): You can.

The Hon. A. KOUTSANTONIS: I disagree with the government on this. I understand that the minister is attempting to make an argument for system security and I understand his argument. His argument is that it is better to intervene early, to turn power off, to stabilise the grid so a larger number of people are not inconvenienced. That makes sense. What does not make sense is why some people in an emergency are compensated and others are not. When the minister tries to characterise my argument as saying under this legislation no-one is compensated—I never claimed it was. I said in the National Electricity Market, in emergency measures, large generators are compensated. That is true and the minister conceded that in the committee stage.

And that is my point. It does not matter that the minister is bringing in a unique piece of legislation for a unique event that he can use. The fact remains that the minister can choose either piece of legislation to choose to enact his emergency powers. He can step in and instruct the Australian Energy Market Operator to turn generation on and they will be compensated. Then he can use this legislation to instruct households to turn their solar panels off and they will not be compensated. That is an equitable. It is unfair.

But the problem with this argument is that the minister's intentions are based on a good foundation—that is, to stabilise the grid. I am talking about equity. I am talking about fairness. I am not talking about the actual action. That is the difference. We will be campaigning on this issue in the lead up to the election and will be telling people who have solar panels in the homes what happened today. I think it is unfair. I think it is also unfair—

Mr Whetstone: We will remind them what you did to their prices.

The Hon. A. KOUTSANTONIS: Sorry?

Mr Whetstone: We will remind them what you did to their prices.

The ACTING SPEAKER (Mr Cowdrey): Member for Chaffey, there is no need to interject.

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Member for Lee, there is no need to respond to interjections.

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members!

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Member for Playford, please! Member for West Torrens, you have the call.

The Hon. A. KOUTSANTONIS: I would like to thank the member for Chaffey for his interjections—they are always entertaining. It's always bigger in Texas!

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members!

The Hon. A. KOUTSANTONIS: But we will be reminding people of this. Again, I commit the opposition to supporting the legislation. We will be moving this amendment again in the upper house. Hopefully, we will have a different reception there. If we do not, the legislation will pass and we will take this commitment to the election. That is the good thing about a democracy: we can slug it out at the election and let the people choose.

We will ask the communities of North Adelaide, Prospect, Walkerville, Medindie and Adelaide, 'If you have solar panels, is it okay for the government to turn your solar panels off and not compensate you? But do you know that at the same time the minister can choose another piece of legislation to instruct generation on or off and they can be compensated? And you can thank the member for Adelaide for that inequity.' Again the scoffs. There was a division. The votes are recorded. The member Adelaide supported this measure. I suppose you just have to live with it. That is the consequence of democracy. I commend the bill to the house.

The Hon. R. SANDERSON: Point of order, Mr Acting Speaker: I am sick of the member for West Torrens bullying me, as he is doing. He is naming me inappropriately. When I had to withdraw and apologise, I was named and kicked out when I did not, and he has not withdrawn or apologised and he continues bullying me across this room.

The ACTING SPEAKER (Mr Cowdrey): Minister, if you have a point of order under standing orders, you need to point me in the direction for that point of order.

The Hon. R. SANDERSON: A personal reflection.

The ACTING SPEAKER (Mr Cowdrey): A personal reflection on a vote?

The Hon. R. SANDERSON: No, on me. He is alleging against my own electorate and he has done it multiple times. He is absolutely bullying me across this chamber.

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members, we are in the same situation as we were 10 minutes ago—

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Member for Hurtle Vale, you are not assisting the situation. We are in the situation we were 10 minutes ago. The minister has taken offence to comments made by the member for West Torrens. I therefore am asking the member for West Torrens if he would withdraw his comments.

The Hon. A. KOUTSANTONIS: No.

The ACTING SPEAKER (Mr Cowdrey): He has decided not to withdraw his comments. The member for West Torrens.

The Hon. A. KOUTSANTONIS: Thank you, sir. I think it really is quite disappointing that the member for Adelaide would use 'bullying' when I pointed out her votes in a democracy. That is not bullying: that is transparency and democracy. There are no secret votes in this parliament.

The ACTING SPEAKER (Mr Cowdrey): Member for West Torrens, you are straying into the territory of argument now and not addressing with any relevance the subject matter of the bill in front of us, so if you could please return to that.

The Hon. A. KOUTSANTONIS: We will be supporting the legislation at the third reading, and we will be supporting the legislation at the second reading in the upper house. We will be moving an amendment in the committee stage of the Legislative Council. If that is unsuccessful, we will support the legislation and we will take this commitment to the election. We will campaign door to door and we will remind people of how they voted in this parliament on this legislation. That is not bullying. That is democracy. That is campaigning. That is what we do. I find it extraordinary that I was accused of bullying for saying that, but there you go. If you want to demean what bullying means, by all means.

The ACTING SPEAKER (Mr Cowdrey): Member for West Torrens!

The Hon. A. KOUTSANTONIS: Thank you, sir. I commend the bill to the house. I thank the minister for arranging the briefings. I also thank him for the way he has conducted the debate, and I thank him for allowing the opposition time to consult on this piece of legislation. It was a very collaborative way, and I think a good example of how legislation can be formulated. We can disagree in the end, but the minister has done a good job of allowing the opposition to come to its position after a period of consultation, so for that process I thank him.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (21:20): Again, an enormous amount of what the member opposite just said is completely incorrect, conflating a whole range of circumstances and trying to make it seem as if any minister, Liberal or Labor, would do one thing to help a company and one thing to hurt consumers. Not even a Labor minister would do the things that the member opposite is suggesting.

It is also a great shame that in the member's closing comments he politicised this issue so much. We had a debate about some emergency powers, and both sides of the chamber agreed with the need for these emergency powers. Those opposite came with an amendment. We have a different opinion on that amendment. Those opposite think that it would be good for consumers. We believe it would actually be bad for consumers, and we have a lot of advice that says it would be bad for consumers. It might look nice, but it would actually cost consumers more, so we are not doing it.

It is a great shame that the members opposite took an energy debate and a difference of opinion about the cost or otherwise on consumers and turned that into politics.

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members on my left!

The Hon. D.C. VAN HOLST PELLEKAAN: That is probably why those opposite delivered South Australians outrageously high and increasing electricity prices. That is why those opposite delivered South Australians blackout after blackout.

Members interjecting:

The ACTING SPEAKER (Mr Cowdrey): Members on my left, the member for West Torrens was granted the ability to provide his speech with limited interruption from my right. I ask that you give the minister the same service.

The Hon. D.C. VAN HOLST PELLEKAAN: The political approach of those opposite to energy policy is what harmed South Australian electricity consumers—higher prices, more blackouts, nonstop. We are taking the politics out of energy policy, and it is working. Electricity prices are going down, emissions are doing down and the number of blackouts is going down, because we are focused on the energy policy. We are focused on what is best for South Australian consumers and primarily South Australian household electricity consumers.

Bill read a third time and passed.

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