HANSARD
SITTING CALENDAR
SEARCH
LIVE BROADCAST
Hansard Dynamic Subject Index
House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-10-28 Daily Xml
Contents
Xml

Bills

National Energy Retail Law (Retailer of Last Resort) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 18 September 2025.)

Mr PATTERSON (Morphett) (11:03): I take the opportunity to speak about the National Energy Retail Law (Retailer of Last Resort) Amendment Bill and indicate that I am the lead speaker for the opposition. As has been the case with other energy laws, these amendments have come through from energy ministers' meetings. In this case, the bill is amending the National Electricity (South Australia) Act 1996 and also the National Energy Retail Law (South Australia) Act 2011.

As has been said previously, South Australia is the lead legislator within Australia for the national energy laws. After they have been through their processes they end up arriving here in this parliament, so we are seeing these changes to the retailer of last resort being introduced here in the South Australian parliament. The convention, of course, with changes to the national energy laws is that amendments are supported by the opposition, so I indicate that the opposition will be supporting this bill today.

The bill is part of a national process. The intent of this particular amendment bill is to make sure that Australian households and businesses are protected when energy retailers fail, which, while rare, can have an impact on customers and cause uncertainty. The aim is to ensure that they can continue to have their energy needs met. It should be said that the bill is strengthening the already existing retailer of last resort scheme, which is there to guarantee that customers continue to receive either their electricity or gas if their retailer collapses.

A lot of the energy laws that come into this parliament actually take a very long time from starting to seeing them in here. In this case, the genesis of this started back in October 2020: five years ago. Then the COAG Energy Council initiated a review of the retailer of last resort scheme. The review itself was undertaken by the Australian Energy Market Commission to try to improve outcomes for customers and it also looked at the financial resilience in the national energy market.

If you cast your mind back to October 2020, when the COVID pandemic was underway, there were a lot of restrictions on people in terms of their ability to earn income and there were concerns around what would happen to retailers, what the impact would be on the retailers, should a lot of their customers not be able to pay their bills or have to defer payment on their bills. The review was undertaken back then and was completed in 2021.

To start with, it is worth looking at what the commission went through and recommended and then at what has actually arrived in this bill here in parliament. We are looking to remove the requirement for small customers of a failed retailer to be transferred onto a standard retail contract; again, trying to get customers onto lower priced deals. We are also looking to have cost-recovery arrangements for a retailer of last resort to provide greater certainty because it was quite prescriptive as to what they could recover in terms of costs for the sake of taking on a failed retailer's customer base and whether they were able to cope with that.

We are also looking at giving time for the Australian Energy Regulator to designate who they want to select as the retailer of last resort, therefore giving them more time to do that rather than having to do it straight away. Also, amending the National Electricity Rules to give better understanding of credit support as well for these retailers, which we can touch on later. Then also to try to give flexibility in terms of communication. That was what was looked at back in 2020 and still today they seem quite sensible on balance.

Fast-forward to June 2022, and of course that is when we had the east coast gas crisis, when a lot of coal-fired power stations were in maintenance and others were flooded, and to replace that we had to use a high amount of gas and there was a shortfall in the ability to provide that gas. At the same time, you had international prices spiking because of Ukraine and the war there. The energy ministers again were faced with the fact that this could put more pressure on retailers. Rather than acting on those recommendations, they thought, 'Let's have a bit more time to look at this.' So they initiated another review of the retailer of last resort scheme to try to work out what to do.

The genesis of the bill now goes through that. I was able to get a briefing from the Department for Energy and Mining. I thank the staff for providing that. They gave a fulsome briefing. They were able to say that over the journey, since the retailer of last resort provisions have been in place, 16 retailers of last resort have occurred, with a lot of them happening since 2022 They also briefed me that in South Australia the default electricity provider would be AGL and the default in the case of a gas retailer of last resort would be Origin.

So there was a lot of time taken. The briefing went through the second bout of investigation into what needs to be done. That kicked off back in August 2022, and again they looked into, I suppose, the Energy Market Commission's report from 2021 and then started consulting. That started back, as I said, in October 2022 and went through to May 2022. Out of that, draft reports came through in 2024, the final report in June 2024. You can see that it was a long time coming.

The energy ministers took time to then look through what these recommendations were and approve reforms back in December 2024, which has this bill now appear before us in parliament. As I said before, the convention with these national energy laws is that South Australia is the parliament to introduce them. That is where we find ourselves here, with the bill being introduced back in September. It has been a long time coming. Nonetheless, as I said before, the opposition will be, as per convention, supporting this bill.

It is worth noting that the time factor is not rare in terms of these bills. In fact, there have been quite a few reforms come through in this session of parliament. If I go through them, they include the east coast gas system amendments, consumer data right protection, gas pipelines, market transparency, ministerial powers, wholesale market monitoring, and data access. There have been lots of amendments coming through into here.

If you look at them, as has been pointed out by a number of stakeholders in both the gas and electricity markets, a lot of these reforms are geared more towards giving powers, changing the powers of the regulator or AEMO and the Energy Market Commission, to try to address energy issues, with no real corresponding effort to reform these rules to actually look at how the energy market could be made more competitive, how more supply could be introduced into the markets to try to get more gas out of the ground and to get more base load electricity into the system. So there are, again, just more powers and more bureaucracy coming in. Nonetheless, the opposition will be supporting it again.

I talked through a lot of the findings and reports back in 2021. It is quite interesting that a lot of the reforms in this amendment bill are quite similar to what was recommended back in 2021, so we see a lot of time, maybe, where instead it could have been introduced a lot earlier. There are cost-recovery reforms for retailers about how they can recover their costs, looking at how retailers of last resort are appointed, giving the Australian Energy Regulator more flexibility. Credit support arrangements are something I mentioned previously, making sure that credit can be more flexible for these providers so that they can have a ramped-up bit of time between taking on customers from a failed retailer to actually getting their full credit requirements in place, going over a number of weeks.

It is looking at also improving what the plan might be for the retailer of last resort in terms of what can actually be provided by those, through designated contracts and customer protections. A newer one that maybe was not looked at by the AEMC is whether there is any gas direction clarification, making sure that the gas supply of the previous retailer can be taken on by the new one. There is more clarity on that.

You can see that this bill has been a long time coming, and these amendments have merit. Anything that strengthens the safety net for households and small businesses when retailers fail should be looked at—so the reason for the support here.

If you go back to the original genesis of why was the AEMC commission made in the first place, they were worried about looking at the increase in numbers of customers who were deferring their bills or were unable to pay their bills. If you look at what the situation is on the ground here in South Australia, as the retailer of last resort provision comes in you find that that concern is very real: there is a significant number of electricity customers who are struggling with what are record high power prices. They are struggling, and so they are facing energy hardship.

If you look at those facts you see that since Labor came into office power bills are skyrocketing. This has the flow-on effect that you have more and more South Australian households struggling to pay their bills, resulting in not only energy debt but also hardship.

Look at the Australian Energy Regulator: they put in their annual retail market report, and it shows this case laid bare and happening in South Australia here. It showed, again, that South Australia has the highest residential electricity median market and standing offer prices per kilowatt hour in the National Electricity Market.

The report found that the residential energy debt has hit $1,522 per customer, which is the highest in the country. It also says that the proportion of customers on hardship programs has risen to 2.4 per cent, a record high. In fact, South Australia has the highest proportion of electricity customers on hardship payments in the nation. It reveals a concerning rise in customers—South Australian households—who are being forced onto electricity and gas hardship plans. Families are struggling to keep the lights on here in South Australia.

I talked about the AER giving the median electricity price per kilowatt, but then also in South Australia we have ESCOSA as well, which, again, reports on the average residential power price. They do that yearly. Again, ESCOSA shows that the prices in South Australia have increased under this Labor government by 43 per cent. They have gone up over that time, and it is really causing hardship for households.

At the same time we have the default market offer also showing similar trends as well. I think in July the most recent default market offer came out, and it showed that the default market offer had gone up by up to $71 from last year to this year, so, again, we are getting prices going up. The default market offer shows prices going up this year again as well. There are real issues here in terms of the prices that households are having to pay. We can talk about the statistics, but those hardship payments represent real people facing hardship and struggling along as well.

Recently I have spoken here in parliament about widowed pensioner Antonetta. She is a grandmother who shared with the opposition her struggle to keep the lights on in winter. It came at a time when she had just lost her husband, so this compounded her grief. She has had to reach out to her family, and her daughter is helping to pay her electricity bill.

Of course, being a proud person, Antonetta does not want to see that. She had been married for 60 years to her husband, and then having to struggle to pay on the one income has really affected her. As she said, it is not fair that her daughter has to pay these bills, but she has no choice. She feels guilty about this, but she just could not afford to pay. She had to use the electricity because she was having issues with her health. She was recovering from heart surgery and needed to have the heater on.

Antonetta's electricity bill was $430 for one month. She just could not afford to pay it of her own accord but she needed to have that. As she said, she is very careful with money but she is really struggling to keep up. That is a personal—taking it beyond the statistics and the summaries and making us understand it is real people behind this.

We talked about small businesses and what they are up for as well. We have seen, under this Malinauskas Labor government, small business power bills have on average gone up by 39 per cent so the cost of doing business here in South Australia has been going up. One of the big drivers is the skyrocketing power bills. Again, speaking with businesses in my electorate, I have a business owner who is really struggling. He said, while the averages might say 39 per cent, his bill increased by 300 per cent. It went from around a thousand dollars a month to over about $3,500 a month. These are big jumps. They have factored into their business plans their rentals, what their expense lines are and it is very hard for these businesses in South Australia to be able to cope with jumps like that.

The issue for businesses is that paying those bills is really challenging but so is being able to employ staff, not only being able to grow and take on staff but having to make the challenging decisions of how to pay for these big increases in the cost of doing business to go with it. It is really hard on these businesses, especially family-owned businesses because people put their heart and soul into the business. We want to see small businesses, family-owned businesses be the heart of the economy in South Australia, because when they are thriving South Australia is thriving as well. It creates jobs. It creates prosperity. It makes every suburb vibrant, so we need to back these businesses and take this into account.

At the bigger scale, you have family businesses struggling but we have also seen big industrials—

The SPEAKER: The energy minister with a point of order?

The Hon. A. KOUTSANTONIS: I have been listening to the member go off topic about this bill. I think it would be important to bring it back to the retailer of last resort and the national reforms, rather than his election pitch.

The SPEAKER: If the member for Morphett can bring it back to the substance, if that is okay?

Mr PATTERSON: Bringing it back to the substance, it is about what we were talking about: why were provisions needed to strengthen the retailer of last resort? One of the drivers, the reasons for looking into this in the first place, was because of the worry and fear of customers not being able to pay their energy bills, and the flow-on effect that the retailer then suffers and becomes unfinancial and fails.

I feel it is very relevant to what we are talking about here in terms of the retailer of last resort because we are talking about the hardship of the people paying. We are also talking about what this government has been doing, talking about these bills coming through. At the same time as these bills are coming through, the electricity price is going up. We have seen the government spending three years on their hydrogen power plant which the Auditor-General—

The SPEAKER: Point of order from the Minister for Energy?

The Hon. A. KOUTSANTONIS: The bill before us is about a national reform of the retailer of last resort and their appointment. The member is talking about matters that do not relate to it.

The SPEAKER: Member for Morphett, if you can, please just stick to what the bill is about, and that would be good. Thank you.

Mr PATTERSON: I am working my way through it. In my explanation before I was trying to explain why that is important. So let's go through, back into this bill then. Let's try to relate it to what I was saying so at least we can understand it. If I go back, what you will see is the genesis of this. As I said before, looking at, 'Okay, why were they looking into this?' Because they were worried. They were worried about concerns relating to the failure of a retailer, all retailers where there were a large number of customers, due to a significant increase in the number of customers who were deferring or unable to pay their bills.

It is relevant to what is going on in South Australia. Are there fears that this is going to have ramifications here in South Australia where retailers go out of business and then provisions have to be applied? My contention is that it is salient to talk about the emphasis this government have put on an energy policy that is based on their hydrogen power station, which the Auditor-General has just shown has cost $500 million and wasted three years.

The SPEAKER: The member, I have asked you to stick to what the bill is all about, and I am not sure the hydrogen power station or the Auditor-General stuff is relevant. In the interest of getting through this bill, if you could just stick to what the subject matter is, that would be great. Thank you.

Mr PATTERSON: As I said, the provisions there are certainly relevant when you look at what is being brought in here when retailers of last resort are appointed. The bill gives the Australian Energy Regulator more flexibility in appointing a replacement retailer after failure. The idea is that instead of relying solely on a predesignated default retailer, the Australian Energy Regulator can look at having a bit of time, so you can appoint different companies, a number of companies, rather than one.

In the case of, as I said, this pensioner who was struggling to pay her bill, maybe if she cannot pay her bill and then others—I have been advised in the briefing that the biggest retailer to fail had 67,000 customers. There could be thousands of customers similar to Antonetta, the pensioner who has struggled under skyrocketing power bills. It may be similar to the business who had their power bill go up by 300 per cent. What happens to those customers who have energy bills when that retailer fails? Maybe they have gone on hardship payments and have debts that come through, and it causes real issues for the retailer.

Then you look at the bigger companies, the industrial ones. I was talking before about the average small business. Let's say one of those customers of the 67,000 was maybe a large industrial who was having trouble. We have previously talked about the big increases that some of those, I suppose, industrials have had to face as well in terms of their big bills that they have had to deal with on a monthly basis. Previously we have had Nippy's—I have talked about them—and how their bill went from $51,000 in one month up to $109,000 in a month 12 months later, the same equivalent month. If they were part of the 67,000 customers, that might tip the retailer over, because imagine if they cannot pay? They are going, 'Okay, we are trying not to pass costs on to our customers.' Then they might ask, 'How can this be looked at?'

The Hon. A. Koutsantonis: You're rambling.

Mr PATTERSON: No, I am going through the reasons for the retailer of last resort. It is perfectly acceptable. While these customers' bills are going up—and this is the salient point—the government have brought this in to try to put customers onto a retailer of last resort but, at the same time, have been spending $500 million on their hydrogen power plant. They have been spending that much money. That is where the investment of this government has been. They have spent three years on an industrial policy and an energy policy that is not looking to protect customers who might end up having to make use of this retailer of last resort. We have seen how, with this $500 million spend—the Auditor-General lays quite bare all the money that has been spent that cannot be recovered—

The Hon. A. Koutsantonis: That is not true.

Mr PATTERSON: It says it right there. It says $285 million has been spent.

The Hon. A. Koutsantonis: You said $500 million cannot be recovered.

Mr PATTERSON: That is right: $285 million has been spent.

The SPEAKER: Minister, can you stop with the interjections, and the member for Morphett, in the interest of us getting through this legislation, can we just stop going around in circles. There are other forums for examination of the Auditor-General's Report, which are coming up later. It is important, with nine more sitting days, that we get through the legislative agenda, and so I would ask you to be as concise as you possibly can while not detracting from the important arguments that you want to put on the record. Thank you, member for Morphett.

Mr PATTERSON: Certainly. What I would say to keep it succinct so we can get through this is, as I think has been well pointed out, the hydrogen power plant was a massive waste of money.

The SPEAKER: Member for Morphett—

Mr PATTERSON: I am closing now.

The SPEAKER: I will sit you down if you keep going on about the hydrogen power plant. This is repetitive. You just keep going around and around in circles mentioning the same thing. We need to get to the point. Thank you.

Mr PATTERSON: I defer to your ruling. Trying to be expedient about this, I think I have made the point around why we are having to consider this legislation around the power bills. We have talked through what is going on here. I have given examples of a number of customers who are facing high power bills that would potentially cause energy debt or potentially cause energy hardship. In a cascading effect, that could then cause problems for retailers. As these are national energy laws, you could say they have to consider all jurisdictions, but this is the Parliament of South Australia, so we want to consider South Australian households, South Australian businesses, the circumstances they are operating under with skyrocketing power bills and what that impact could be.

To finish, what we would say of these provisions that are being put on the retailer of last resort is we do not want to see them happen because, of course, that causes issues; nonetheless, we need to have these provisions. The retailer of last resort already exists, and these amendments seek to add to those that are already there.

As I said, taking all this time, starting back in October 2020, it really has been a long time coming. Again, it is trying to give more powers to regulators, whether in this case it is the Australian Energy Regulator, AEMO or AEMC, instead of actually seeing another way to do it such as looking to try to protect households from energy debt and hardship. As I close my remarks, I say again that the opposition will be supporting this legislation.

Ms CLANCY (Elder) (11:32): I rise today in support of the National Energy Retail Law (Retailer of Last Resort) Amendment Bill 2025, which seeks to amend the National Energy Retail Law (South Australia) Act 2011 and the National Electricity (South Australia) Act 1996. I am proud to stand again to speak in support of further reform to our energy laws to protect consumers and ensure South Australians get the best bang for their buck every time they switch on the lights, boil the kettle or turn on the telly. While we cannot go back in time and stop those opposite from shamefully selling off ETSA and the operation of state-owned generators, we will continue to do what we can to regulate a now private market in the interests of South Australians, who at the end of the day just want clean energy for a fair price.

The bill before us today seeks to strengthen the retailer of last resort scheme to improve resilience in the system and manage financial risk and contagion. This reform seeks to improve the operation of the scheme overall and lower barriers to participation by retailers. It includes a range of benefits and improvements on the existing scheme, such as:

allowing more time for allowed retailers of last resort to be appointed following a retailer of last resort event;

allowing more time for a designated retailer of last resort to meet AEMO's credit support requirements;

providing clarity and certainty over cost recovery;

expanding the pool of potential retailers of last resort and providing more retailers for a particular retailer of last resort event;

ensuring customers transferred to a retailer of last resort are no worse off than they would be under that retailer's standing offer; and

providing greater flexibility to the regulator when developing and implementing retailer of last resort plans.

The bill before us today provides a safety net designed to protect South Australian customers if their energy retailer fails and ensures they continue to receive a constant supply of energy. These amendments to our national energy laws are sensible, in the best interests of the consumer and have been agreed to by energy ministers from the commonwealth and each state and territory to now be introduced in this place, with South Australia as the lead legislator.

What better place to introduce this reform, given our proud history of leading the nation in renewable energy and climate change mitigation? The Malinauskas Labor government is delivering an energy network that benefits South Australians specifically by improving renewable energy uptake and decarbonising our economy. Thanks to our state's embracing of rooftop solar, South Australia's energy system flipped the traditional supply-demand balance on its head.

In 2018, we built the South Australian VPP, Australia's largest virtual power plant. Today, our virtual power plant benefits more than 7,000 public housing tenants by providing reduced power prices and firming up the grid. Like the network of batteries, this virtual power plant has played a role in maintaining energy continuity for South Australia during a time when the Eastern States have seen major interruptions on the National Electricity Market.

In partnership with local government, AGL Energy and funding from ARENA, we are also rolling out community batteries right across our state, with another 16 to be installed to deliver direct benefits to more than 10,000 South Australian households. The member for Badcoe and I are incredibly proud that one of the two community batteries already installed is in our shared community of Edwardstown.

Collectively these community batteries build on the success of South Australia's virtual power plant by delivering cheaper electricity to more households while firming up the grid. Participating households have access to a retail electricity rate at a whopping 25 per cent less than the default market offer. On current figures a typical household benefiting from this scheme could save as much as $575 off their annual electricity bill.

Beyond this particular scheme, South Australians are continuing to embrace all the benefits of rooftop solar, which is now on around half of all dwellings. On top of this, we are working with the Albanese Labor government to provide energy bill relief in the form of a $300 rebate for all households on their electricity bills and thanks to our most recent state budget we have extended the scheme to the end of December taking the total rebate to $450.

The Malinauskas Labor government is also providing targeted relief payments to the most vulnerable consumers in South Australia. This year's state budget provided a cost-of-living concession payment of $262, alongside energy bill and other household concessions, to help eligible home owner/occupiers save up to $1,215 throughout this financial year.

South Australia is a world leader in energy transition. The leadership of Labor governments has seen our state achieve 75 per cent renewable wind and solar energy generation in our electricity mix. In 2017, South Australia built the world's biggest original battery, the Hornsdale Power Reserve, drawing the eyes of the world and proving that this technology—

The SPEAKER: Member for Elder, there is a point of order from the member for Morphett.

Mr PATTERSON: It is just as to consideration of relevance.

Ms CLANCY: I am five minutes in—you took 30 minutes to get to a point.

The SPEAKER: I will continue to listen to the member for Elder. Thank you for bringing that to my attention, member for Morphett.

Ms CLANCY: Today and every day, member for Morphett, I am proud to be part of a government that is not resting on its laurels and is doing everything it can to achieve net 100 per cent renewable electricity by 2027.

This is important for every South Australian, particularly those in my community who want to see renewable energy harnessed to its full potential and see real action on climate change. On this side of the house we recognise that climate change is real and that the generational and systemic release of carbon into the atmosphere by human endeavour is heating the planet to devastating effect.

Mr Patterson interjecting:

Ms CLANCY: I have three more paragraphs, mate. I am six minutes in.

The SPEAKER: If everyone can just continue as they were. Member for Morphett, if it is only three more paragraphs it is going to take longer with the constant backwards and forwards.

Ms CLANCY: Yes, I would be finished.

Mr Patterson: I only had three paragraphs—

The SPEAKER: I would like to put the whistle away and call 'play on' in this instance, if that is alright.

Members interjecting:

The SPEAKER: Member for Elder, please stop with the responses. There are only three paragraphs to go, member for Morphett, but thank you for your point of order.

Ms CLANCY: Primary school students get it, yet the Liberal Party does not. Economies across the globe desperately need to decarbonise, and our government is leading the way. We are investing in infrastructure and developing the policy work to support our energy transition. Those opposite can ask ChatGPT for help or get on board. In closing—

Mr TEAGUE: Point of order: standing order 128. It has been raised a number of times by the minister responsible for the bill, in the course of this debate, and the Speaker has already admonished one of the contributors on this side, for the time taken to address the bill. They do not want to talk about hydrogen when we are talking about it; on the other hand, they want to have freewheeling capacity to just address anything that—

The SPEAKER: You can sit down now, deputy leader.

Mr TEAGUE: But it is a point of—

The SPEAKER: You can sit down, deputy leader. I have already said that there are three paragraphs to go. Let's get them out of the way. I am interested in having an efficient discussion around this bill and moving on to the next bill. Member for Elder, finish off. Thanks.

Ms CLANCY: In closing, I thank our Minister for Energy and Mining for his steadfast commitment to decarbonisation, and his team for their work in bringing this bill before us today. I commend the bill to the house.

Mr PEDERICK (Hammond) (11:40): I rise to speak to the National Energy Retail Law (Retailer of Last Resort) Amendment Bill 2025. I note that, back in June of 2022, energy ministers tasked the Australian Energy Market Commission with undertaking a review into the retailer of last resort scheme. The Australian Energy Market Commission initiated a review into the arrangements for a failed retailer's electricity and gas contracts on 13 October 2022, providing both a terms of reference and a consultation paper.

Along the way, a directions paper was then released on 11 May 2023, and there was a draft report that was published on 22 February 2024. The final report of that inquiry was published on 20 June 2024. Following this process, energy ministers approved the amendments that are set out in the National Energy Retail Law (Retailer of Last Resort) Amendment Bill 2025 on 6 December 2024.

As the shadow minister indicated earlier, and as with previous changes to the national energy laws, we are the lead jurisdiction in South Australia and so the convention is that, as the legislation has been approved by the Energy and Climate Change Ministerial Council prior to it being introduced into the Parliament of South Australia, it does receive bipartisan support. The minister introduced the bill into this house on 18 September 2025. What this bill seeks to do is to amend the National Energy Retail Law (South Australia) Act 2011 and to make related amendments to the National Electricity (South Australia) Act 1996.

In regard to the cost-recovery reforms initiated in this bill, the bill makes it clearer how retailers of last resort can recover the costs they face when another retailer collapses. When a retailer of last resort takes on extra customers, it often has to quickly buy more electricity or gas and arrange new financial cover, which can be expensive. The new rules spell out exactly which costs can be claimed back, including energy purchases, administration and financing, and allow claims to be processed faster, within three months. This gives retailers more confidence that they will be repaid for doing the right thing, which should encourage more of them to volunteer to step in if another retailer fails.

In regard to the appointment of retailers of last resort, the Australian Energy Regulator will now have up to 72 hours after a retailer fails to decide which company or companies will take over its customers. Previously, this had to be decided in advance through a default retailer of last resort. This change allows the Australian Energy Regulator to share the load between multiple willing retailers rather than relying on one. The default retailer of last resort still acts as a backup so customers will not lose supply. This greater flexibility makes the system more stable and reduces the risk that a single retailer is overwhelmed by too many new customers at once.

Regarding credit support arrangements, the bill changes the rules around how quickly a retailer of last resort must provide extra financial backing, known as credit support, to the market operator. Instead of having to do this straightaway, a new retailer of last resort will get a one-week grace period, then four weeks to gradually build up to the full amount. This more flexible approach will help retailers manage their cash flow during what can be a stressful time, while still ensuring the energy market remains secure.

In regard to the plan flexibility in regard to the retailer of last resort, the Australian Energy Regulator will have more flexibility in how it prepares and maintains the official retailer of last resort plan, which outlines what happens when a retailer fails. At this moment, the law is very prescriptive about what must be included and when. The bill in front of us today relaxes these requirements so that the Australian Energy Regulator can update or test the plan when it makes sense, rather than on a fixed schedule. This will make the process more efficient and responsive.

In regard to designated contracts and customer protections, a major new feature of the bill is the ability for a retailer of last resort to offer customers a designated contract—a fair market-based plan, instead of the higher price default contract. These contracts must have the same basic terms as a normal market contract, keep prices at or below the standing offer, freeze prices for the first three months, and not charge any exit fees if the customer switches retailers during that period.

Customers do not have to give explicit consent, so the supply continues without interruption, but the retailer of last resort must publish the contract online and meet all consumer protection standards. The idea is to give consumers a better deal while making it more attractive for retailers to take part in the retailer of last resort scheme.

Finally, in relation to clarification around gas directions, the bill sets a clear rule for how quickly gas companies must respond when directed by the Australian Energy Regulator during a retailer of last resort event instead of having to act immediately. They now have 24 hours to comply and this provides a realistic, enforceable timeframe without putting supply at risk and aligns the gas rules with the new retailer of last resort appointment process.

We have had some discussion in this house today about the impact of electricity prices on private citizens and businesses. They have gone up many hundreds of dollars for citizens and thousands of dollars for businesses in this state. Part of that issue was the failure of hydrogen projects, not just here in South Australia but right across the nation. We have seen more than $600 million wasted on a hydrogen bomb scheme here in South Australia.

We have seen a $14 billion project in Queensland completely scrapped. We have seen a $600 million project in West Australia scrapped. We have seen projects scrapped in Tasmania and New South Wales. Woodside in Western Australia have also pulled out of a hydrogen project, and also 'Twiggy' Forrest has pulled out of a project. In this hydrogen dream, even if you get hydrogen operating, you lose 80 per cent of the hydrogen to get only 20 per cent of the energy at the end of it, and this is part of the reason why these projects, including the one here in South Australia, have completely failed.

I want to make a final couple of points around Project EnergyConnect, which we instigated as the Marshall Liberal government to get a powerline from Robertstown through to New South Wales and to have another interconnector to get the grid right on the east coast of Australia. Obviously, that connects South Australia, New South Wales, Queensland, Victoria and Tasmania. That grid connection has got as far as Buronga in New South Wales, and there is 150 megawatts of transferable energy able to be transferred along that line. Yes, it has got some time to go, but I want to let the house know what the minister said about this project when the South Australian section was finished. I quote from Minister Koutsantonis:

A well deserved congratulations to ElectraNet for completing the South Australian side of Project EnergyConnect.

This project will facilitate that connection that is vitally needed through to the east coast so that we can export renewable energy from here, which we have in abundance, and import energy that at times needs to come from Tasmanian hydro, New South Wales coal or other dispatchable power that we can utilise here in South Australia. This is a bipartisan bill and we are the first jurisdiction in the country to discuss this legislation. We support the bill.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Energy and Mining) (11:51): I want to thank members for their contributions and their support for this legislation. This legislation is the result of a great deal of effort and research by the Australian Energy Regulator, the market bodies, the former Energy Security Board and, more importantly, the energy ministers' council.

What we are attempting to do is to try to contemplate worst-case scenarios where a retailer has a series of customers and, when the unforeseen occurs that that retailer can no longer adequately survive as a listed company or cannot financially withstand the pressures of the National Electricity Market, the customer notices no real difference in terms of continuity of supply. The question then is: what happens next? That has always been a difficult part of RoLR events, as they are characterised within the industry.

I thank the shadow minister for his bipartisan support of this bill and what it is we are attempting to do. I also point out that every single piece of legislation in this parliament regarding energy has been bipartisan and has been supported by both sides of the house. I cannot think of a piece of legislation regarding the energy sector that has not been bipartisan. In fact, I cannot think of a single bill on the energy system that the Liberal Party have voted against that the Labor government have introduced, and vice versa.

That is a fascinating statistic when you hear the rhetoric coming from members opposite, which I think is a telltale sign of a looming election rather than any real policy difference. The truth is that we are overseeing the biggest transition in human history of a sector that is undergoing dramatic and rapid change. The National Electricity Market is being stretched and there are some within the market who say that the market no longer exists and that it is simply a series of interventions.

Whether it is government underwriting of infrastructure, like Project EnergyConnect, or whether it is a subsidisation of thermal capacity or renewable capacity, there is intervention after intervention after intervention. That is creating uncertainty. Within that uncertainty the people who need the most protection are the vulnerable in our community and, of course, just ordinary people going about their business: so if a large retailer goes belly up, what happens next?

What this legislation attempts to do is try to foresee every possible permutation of what could occur and put in transparent protections for those customers to make sure they are looked after, to make sure they are given an adequate opportunity to maintain their continuity of supply and to make sure they are not automatically put on a regressive bill or rate, and they can then obviously take their future into their own hands and potentially seek other retailers or other offers.

I think transparency is the most important part of this legislation. It gives people more transparency about what is occurring and how it is occurring. Hopefully we will not have any RoLR events but if we do, more importantly, let's hope no-one really notices, because the most important part about these reforms is that we have a seamless system that operates.

The shadow minister made a series of remarks about gas which I find fascinating, given he voted to ban gas exploration and extraction in parts of South Australia. To now bemoan the lack of gas and interventions in that area I think sums up exactly where some people are on this matter. The truth is, that commodity is setting the price of electricity in this country. When there is a shortfall it firms; when it firms it sets the price; when it sets the price we are paying extraordinarily large amounts of money for its production per megawatt hour. That is a shame.

If we look at South Australia and at the eastern seaboard, we have lots of gas reserves. We have two very large basins in South Australia: one is the Cooper Basin and one is the Otway Basin. The Otway Basin is Australia's first basin. It is where we first found gas in this country. For the Liberal Party to ban fracture stimulation in that basin they have really tightened the screws on gas availability in the state, but to then bemoan the availability of gas I think really shows a level of hypocrisy that needs to be called out.

Only one person on the other side of the parliament can stand with some pride on this matter and that is the member for Hammond. The member for Hammond is the only person on that side of parliament to vote against the fracture stimulation ban. Quite defiantly, he voted no on that piece of legislation, and to his eternal credit he deserves to be thanked by energy consumers for his foresight. It was probably because he worked in the industry and he understands the real-life implications of it. No doubt he was a lone voice in the party room, but nevertheless he spoke with the power and the courage of his convictions. Unfortunately, the same cannot be said for the shadow minister for energy who simply toed the party line on that matter.

I also want to point out that Project EnergyConnect is a project that the opposition did not oppose. I look for comments that members can propose that show that I at any stage opposed the construction of Project EnergyConnect. What I simply highlighted to the public was that the government's regulatory investment test proposed a swap from gas to coal. It is there in black and white. They proposed a closure of Torrens Island power station in exchange for Project EnergyConnect. It is a project that they underwrote and, like all projects, the construction project was delayed.

We do not have full energy transfer across from New South Wales to South Australia, which is a shift from gas to coal, but the displacement of the gas-fired turbines was on time. So the South Australian government had to intervene to keep Torrens Island open because members opposite underwrote an infrastructure project that sought to close it, linking our economic sovereignty to generation in New South Wales rather than having our own thermal capacity here in this state looking after our own needs.

That is the very antithesis of what Sir Thomas Playford—standing behind me—set out to achieve with the Electricity Trust of South Australia. As we all know, when he held a royal commission into power generation, what occurred was that the eastern seaboard was extracting vast amounts of rent for their power and coal, and South Australians were becoming extremely reliant and were paying large amounts of money that were unfinancial and unfair, so he nationalised the assets in South Australia. It is a sort of back to the future type of scenario for the Liberal Party.

This piece of legislation seeks to give as much autonomy as possible to consumers so they know that, when they are actually a client of a retailer who is unfortunately put into administration or unable to provide services, it transfers—as I said in my second reading contribution—impacted customers to designated retailers of last resort where there is insolvency, or there is a market suspension or when a retailer stops operating. Historically, it has operated well, with only four activations between 2012 and 2022, with no major interruptions to service.

Obviously, international events have put a large strain on gas reserves in this country, as have some government policies, which has led to shortages in gas availability. Gas is a firmer of renewable energy, and it is important that we protect against retailing failures and give the AER gas direction powers. Those gas direction powers are vital. That was in response to the energy ministers in June 2022, who tasked the market commission to re-examine its earlier review of the scheme. As I said in my second reading contribution in August 2022, energy ministers agreed with the AEMC's recommendations, and we have now implemented reforms to the retailer of last resort framework as part of a wider initiative to bolster retail market powers.

We held public consultation, which is why this bill has taken a while to get to the parliament, but that consultation I think holds us in good stead. The bill puts those reforms into statute, which is important. As the shadow minister quite clearly pointed out, other jurisdictions are waiting for this legislation to be enacted so that it can be operational in their states, because this is very important work. The AER, importantly, will maintain oversight, including ongoing maintenance and monitoring, and wait for the market commission's guidance on those roles. But, importantly, this legislation gives greater assurance to participants, as I said in my second reading contribution, of the lowest financial risk. It actually encourages competition while placing the concerns of consumers at the very beginning.

It gives us greater clarity over cost recovery. It extends the AER's window for designating retailers of last resort to up to 72 hours following an event, which is important, and moving away from the reliance on a preset default retailer of last resort. There are a number of reasons for that but, most importantly, it is to distribute customers more effectively and efficiently and to maintain an uninterrupted supply.

The bill amends AEMO's credit support demands by establishing a one-week grace period for these retailers who are a last resort measure, followed by a gradual increase over four weeks to account fully for the added customer load. That is a very important reform to allow retailers who are all of a sudden given much larger customer loads for which they may not have hedged in the market for their customer demand the ability to maintain those customers.

We also have further terms and conditions within retail contracts. Prices cannot exceed these retailers standing off prices, and there can be no price increases for the first three months of a customer being transferred to a retailer of last resort. Importantly, as the member for Hammond said in his remarks, there will be no exit fees for anyone wishing to move away from one of these retailers if they are assigned to them in case of one of these events—that is a very important reform.

The Australian Energy Regulator evaluates and oversees requirements through guidelines. We mandate that records be kept, and that is important for the transparency aspect that I was talking about earlier. That transparency aspect is vitally important, and I would argue that the transparency measures within this bill are probably some of the most important we have. One of the concerns I had at the energy ministers' conference when we were discussing these reforms was the transparency of customers and how they are notified of their moves, what standing offers they were being put on and whether or not there could be better market outcomes.

I thank the members for this and I hope it gets a speedy passage through the upper house. I also understand that there will be no need to go into committee, and I thank the shadow minister for that forbearance. I also thank him for continuing the fine tradition of this parliament. Being the lead legislator in the state, it is often difficult to, in effect, pass legislation decided by an energy ministers' conference, often by a party of a different political persuasion—that takes policy courage and for that I thank him and commend the bill to the house.

Bill read a second time.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Energy and Mining) (12:07): I move:

That this bill be now read a third time.

Bill read a third time and passed.

PARLIAMENTARY BUSINESS
MEMBERS
GET INVOLVED
ABOUT PARLIAMENT
VISIT
LEGISLATIVE COUNCIL
HOUSE OF ASSEMBLY
CONTACT