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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-03-04 Daily Xml
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ELECTRICITY (COMPENSATION FOR BLACKOUTS) AMENDMENT BILL

Introduction and First Reading

The Hon. J.A. DARLEY (17:29): Obtained leave and introduced a bill for an act to amend the Electricity Act 1996. Read a first time.

Second Reading

The Hon. J.A. DARLEY (17:30): I move:

That this bill be now read a second time.

I am introducing this bill in response to the recent power blackouts across metropolitan Adelaide in February this year and the inadequate compensation available to customers whose power was cut without warning, sometimes for the entire day. Unfortunately, this was not the first time that South Australia's power grid went into meltdown during a heatwave.

Members may remember the very extensive outages experienced by South Australians in the heatwave of January 2006. Such was the severity and total lack of preparedness on the part of ETSA Utilities for the outages that the minister had to order the Essential Services Commission of South Australia to investigate and prepare a report on what went wrong and how ETSA Utilities could improve its performance.

The report indicated several areas of improvement that needed to be addressed by ETSA Utilities, including a more proactive approach to the interpretation of, and response to, weather forecasts, tracking of jobs, customer service and provision of information to customers.

My predecessor, the Hon. Nick Xenophon, introduced a bill into parliament in response to the inadequacies outlined by ESCOSA in its draft report on the 2006 blackouts. My bill is based in part on his 2006 bill but has been updated to incorporate concerns raised with me since the latest round of blackouts.

By way of background to the bill, under the Essential Services Commission Act, the Essential Services Commission has the power to make industry codes such as the Electricity Distribution Code in order to regulate the behaviour of licensed entities such as ETSA Utilities. Under the Electricity Act, ETSA Utilities is required to comply with these codes, as well as a number of other industry codes, which incorporate performance standards in relation to various matters including supply interruption.

The bill amends the Electricity Act to make it compulsory for these codes to contain a provision requiring the electricity entity to pay compensation to customers in the event of a failure in electricity supply. The schedule in the bill sets out the particular compensation amounts that are to apply.

The bill contains some limited exceptions to this requirement, such as cases where there has been an act or omission in bad faith, or by negligent conduct of the supplier or if there is some alternative contractual arrangement between the customer and the supplier, or where other parts of the code permit interrupted supply for other reasons, such as maintenance.

Most importantly, the bill proposes a new, more comprehensive scheme for compensation for people who suffer a failure of electricity supply. At the moment, the compensation to customers is contained in what is called the guaranteed service levels scheme (GSL) required under the Electricity Distribution Code. The current payments are as follows: for outages of 12 to 15 hours duration, $80; for 15 to 18 hours, $120; for 18 to 24 hours, $160; and for more than 24 hours, $320.

I think that an $80 payment for going without power for 12 hours is woefully inadequate, both in terms of the amount of money and how long a person needs to be without power to attract a payment. Under the bill, the increments for power outage payments will start at three hours with an affected customer being entitled to the amount of $150.

The highest payment is for an outage of 18 hours or more which attracts a $1,300 compensation payment. I have started the payments at an outage of three hours as I think it would be safe to assume that, after three hours, you would need to start throwing away perishable foods that had previously been refrigerated.

During the recent power outages, my office was contacted by a constituent who was very distressed as she had been without power for 15 hours. Her freezer had completely defrosted and all the food in her fridge and freezer had to be thrown out. She commented that she did not want to make a fuss but was in need of compensation because she could not afford to replace the food she had lost for just $80. This constituent was unfortunate enough to have several outages in a 24 hour period that amounted to a total of 26 hours; however, because the outages were not continuous, she was entitled to only one payment.

Another constituent had a similar experience where she had a loss of power for eight hours, then the power was restored for an hour, only to be cut again for a number of hours. Because the interruptions were not continuous for 12 hours, she was not entitled to any compensation. This bill also contains a provision which ensures that customers can still be eligible for compensation if they have been subjected to more than one power outage in a 48 hour period. It provides for the total number of hours without power over 48 hours to be aggregated and treated as one period, if this means that the customer will be entitled to more compensation.

This bill aims at providing a fairer and more comprehensive compensation scheme for customers who have to suffer through power outages with no warning in the middle of a heatwave. During the heatwave, the air conditioning in my car broke down, and I advise members that it was not a pleasant experience. I can only imagine how much worse it would have been to have no air conditioning at home for several nights and days and no way of keeping food cool and safe, and then to be presented with a cheque for as little as $80. I hope that members will seriously consider supporting this necessary reform to help consumers, and I commend the bill to the council.

Debate adjourned on motion of Hon. R.P. Wortley.

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