Energy Legislation Amendment (Consumer Protection) Bill 2015


Mr BARBER (Northern Metropolitan) — As Mr Drum has ably explained, this bill contains a couple of minor tweaks in the area of consumer protection, but I really have to ask myself: is this seriously all there is from a government that had four years in opposition to think about it and the best part of 12 months to do something about it? The 'it' I am referring to is the massive changes that are going on in the energy market; never mind the increasingly pressing concern around climate change.

Frankly our energy and climate change ministers in Victoria are a couple of snoozers if this is the best they can come up with. In the meantime we have a Premier who is out there doing photo ops. The rest of the time he is dealing with the internal politics of his own party. No wonder these people have not been able to get their arms around the problems of the energy market.

There is no doubt that things are changing rapidly, and Mr Drum has also referred to the surging increase in disconnections that is going on in Victoria. In fact we knew all about this a year ago. I was at the exact same launch event where the energy and water ombudsman laid it out for us in graphic detail, and the minister herself — then in opposition and now the Minister for Energy and Resources — actually attended.

The Age of 16 October last year reported:

Complaints about gas and electricity disconnections have soared in Victoria as energy retailers take a harder line against households struggling to pay their bills.

The energy and water ombudsman's annual report reveals concerns about essential services being cut off have overtaken gripes about high bills for the first time, to top the list of complaints.

We are now up in the tens of thousands of disconnections, and this bill deals only with those that are found to be wrongful disconnections and increases the penalty — the compensation, if you like — that the power company will have to pay back in order to settle the matter.

Just have a look at the Essential Services Commission (ESC) report on this matter that came out on 1 September this year, which says:

We should not be surprised, therefore, that retailers are still confused after 10 years —

that is, 10 years since privatisation —

about their obligations and the regulator's expectations of them. Similarly, it is not surprising that customer representatives continue to allege retailers' treatment of customers is often inconsistent, inadequate and unfair. Further, our findings shed light on why policymakers remain uncertain about whether retailers pursue disconnections only as measure of last resort. Inadequately functioning regulation results in disappointing outcomes while still imposing costs on regulated entities and, ultimately, on all customers.

That was a month ago, and I would be mighty surprised if this bill has appeared in a month and a few days since reading that. In fact this bill in no way faces up to the challenge that both the energy and water ombudsman Victoria and the ESC have been talking about. We can only hope that the government has something else up its sleeve on disconnections, but let us just remember the ESC's description of the way these policies work now: 'inconsistent, inadequate and unfair'. Hopefully this government wants to be able to correct that sometime before the next election.

Another measure in the bill — it will be no surprise that the Greens are in support of this one — attempts to prevent retail power companies from penalising those who have solar panels on their roof. Back during the last state election we became aware in my office that one company had published a tariff proposing to hit those with solar panels on their roof with higher charges — effectively, if you like, a tax on the sun — and amazingly the then Minister for Energy and Resources, The Nationals member for Morwell in the other place, came out and backed it and got into quite a stoush with me and various other solar customers on Twitter. It was quite an amazing thing for a minister to do, really — to leap to the defence of these big power companies. Here we see today that the government has decided to at least legislate against that particular practice, and The Nationals are now meekly coming along, finally joining the party and supporting what the Greens were calling for back then.

That is the absolute least of it in terms of what this government needs to do if it is going to fix this broken market that has been left for the most part intact since Jeff Kennett dreamt it up, and a series of governments that have come along ever since then — including both Labor and Liberal, and now again Labor — have left this architecture fundamentally in place. Is this seriously all there is from the government in the face of a major crisis with climate change? We are not heading for a climate crisis, we are in a climate crisis.

Members might want to walk outside the door and get a weather report if they really need to understand it any better. Emergency management commissioner Craig Lapsley said today that we have not experienced these types of temperatures or wind speeds in the first week of October in the history of Victoria. All the predictions of a longer and more severe fire season are here right now. As we speak in here, fiddling around with this and tweaking around with the regulation-making power in the legislation, there are hundreds of home owners out there at risk and waiting for a change in the wind to know whether they are out of danger or thrown very rapidly into it.

In fact we have been reading comments from the Country Fire Authority over a number of years that it has concluded on the best available advice that the effects of global warming are already impacting the fire weather environment that it faces in its daily environment. Of course, Deputy President, you and I would be well familiar with these challenges as we just spent a night, the night before last, at the United Firefighters Union annual ball, which was an amazing event and the first one I had ever been to. No doubt the Deputy President has been there many times. I did see one lone Liberal, the federal member for McMillan, Russell Broadbent, who had come up from central Gippsland. He and other MPs were given special mention for the work they have done in protecting those firefighters at a commonwealth level from the effects of their daily exposure to smoke and other chemicals at work. We are confident that here in Victoria we will get that same legislation very soon, otherwise we will very soon be the last state in Australia that is not protecting its firefighters with presumptive legislation.

We have seen the impact of global warming, with increasing ferocity, as each season has gone by, and now unfortunately here we are in the first week of October and we are seeing it again. In only a month's time various world leaders — and who knows, maybe some state and federal environment ministers — will be off to Paris. There they will talk about how to limit the world's global warming to less than 2 degrees. The extreme fire weather that we are experiencing right here and now, today, is as a result of global warming of less than 1 degree. It does not bear thinking about what sort of world we will be in if we heat it up by 2 degrees or, worse, go on to burn more fossil fuels and heat it up even more.

To achieve the 2-degree target alone would require us to leave 90 per cent of all fossil fuels in the ground. Forget about it if you think you are going to be mining coal and drilling for gas in Victoria for years and years to come. That puts a huge burden on us to scale up our renewable energy very quickly. That is not happening here in Victoria. It is not happening as a result of this government. It has brought in a little bit of legislation here to stop retailers from introducing a tax on the sun, but at the same time it has cut the payment that was made for exporting electrons from those who have solar panels on their roofs from 6.2 cents down to 5 cents, an effective 20 per cent cut or, if you like, about $12 a tonne for the green electricity that would have been fed into the grid and thereby pushed out other generators that are more polluting.

We saw it on grand final day quite spectacularly. I am a rugby fan, so while others were glued to their screens I was checking, as is my wont, the numbers coming out of the Australian Energy Market Operator and the electricity grid. What did I find there? On grand final day, which was a fairly low demand day for power usage, it was somewhere down between 3000 and 4000 megawatts. Being a sunny and blowy kind of day we saw a huge amount of our electricity being provided by renewables. Just below 30 per cent was being met by wind, sun and solar around the middle of the day. In fact the power stations, which were probably operating at about 80 per cent capacity, were selling their excess electrons into other states and even down into Tasmania.

That just goes to show what can be achieved with even some modest measures — measures that have been voted through this Parliament quite often by Labor, Liberal and even Greens members; measures to reduce our energy demands through energy efficiency programs; and measures to encourage solar — and yet we have a long way to go. We brushed that number just briefly on one day, but we need to massively ramp up our renewable energy target.

Is that what this government plans to do? No, it does not. We heard an announcement from the Premier, including a photo opportunity involving a windmill, that the government is going to get its state renewable energy component up to at least 20 per cent.


Mr BARBER — No. I am sorry, but Mr Ramsay is wrong. The bill is about, amongst other things, banning the tax on the sun that retailers wanted to introduce and that the energy minister from Mr Ramsay's government 12 months ago was fully willing to back. It is about giving consumers two tiny toothpicks of a weapon to fight against the massive power companies. That includes not just retailers but are also increasingly the owners of generators. They are gentailers. They are remonopolising a market that former Premier Jeff Kennett tried to break up. How do you compete in either the retail or generation space when you are up against this 800 pound gorilla that involves great chunks of both?

So much for the level playing field that some on the opposition benches have called for. They say that we could not have one group of consumers with solar panels being subsidised by those others. In fact it is those who have solar panels on their roofs who are the generators. They represent David up against the Goliath of a bunch of coal-fired power stations that were built with public money and are now owned and run down by privateers, some of whom have said that there is no rational strategy for exit and have asked whether the regulators can come up with a rational strategy by which a certain amount of coal-fired power can exit the market as renewables come in. I do not know whether they fall into the same category that Mr Drum was talking about. He was talking about those who want a balance of regulations. Coal-fired power operators are begging the regulators to come in and bring some rationale back into the market.

The Andrews government's non-commitment on renewables has been exposed through an article by Tristan Edis in Business Spectator headed 'The Andrews government's renewable energy target trickery'. It is an absolute doozy. I reckon even Mr Ramsay is going to get a chuckle out of this, though he has somewhat of a love-hate relationship with renewables. But he will like this. The article states:

Another Labor state government's renewable energy target has been revealed as a token joke. This time it's Victoria.

Tristan Edis refers to the South Australian 50 per cent target that was going to be achieved by doing nothing. Then there is the similar approach taken by Queensland — that is, to set a very ambitious target but then just ride on the coat-tails of the federal government. According to the article the Victorian government has produced figures that show in 2014 the amount of renewable energy from Victorian projects was about 12 per cent — more precisely 11.7 if you quote Ric Brazzale from Green Energy Markets, who produced this critique. That would suggest to an average ordinary layperson, who is not as excited about electricity as I am, that there would need to be some significant additional effort to get from 12 per cent to 20 per cent.

First of all we find out that the Snowy Hydro Murray generator, which had an off year in 2014, is likely to turn around and deliver an extra 900 gigawatt hours next year. That increase is just off the bat of the renewable share by about 2 per cent. Tristan Edis also said:

Also, rather conveniently, several wind farms were already committed to construction prior to the Victorian government's target announcement, that over the next few years will boost the share of renewable energy above levels in 2014. Bald Hills, Chepstowe, Coonooer Bridge and Ararat will add 372 MW —

an estimated 1218 gigawatt hours, and that will boost renewables share by another 2.3 per cent. That was for wind farms that were already committed to and in many cases under construction. The article continues:

Then under the radar there is also the fact that the rooftop solar industry is busily churning away installing panels on home and business rooftops —

even as this government cuts the incentive to do so. Against all odds they are still going to put in another 206 megawatts of solar per annum. That adds another 4.2 per cent to the target.


Mr BARBER — No, wait there is more. Mr Drum has to understand that we have now taken into account the fact that the Anglesea power station closed in the same month that Dan Andrews made this announcement. That has shaved another 1200 gigawatt hours off the fossil fuel share of the market, and — voila! — the government has pretty much hit its 20 per cent target without lifting a finger. You have to give it credit at least for productivity in that sense. But it really shows that the 20 per cent target was not meaningful.

Despite that, we are getting a rather longwinded discussion process from the government about a renewable energy target. In the same vein, and certainly interlocking with the measures in this bill and the measures that I have just been describing, we are also getting in a review of the Climate Change Act 2010. There have been over 200 submissions to that review, and if I could summarise them, basically they say, 'Get on with it. Show some leadership'. There is an exception. There is a group of self-interested industry players that just want to live in the same world that they have always lived in, and what they are saying is that Victoria should do nothing and that it is not the role of a state government to do something.

Somewhere between getting on and doing what it needs to do and doing absolutely nothing, one can only hope that this government will at some point land. In the meantime we have got this rather tokenistic bill that in no way allows renewables a level playing field. It simply targets one particular tactic that the power companies, all of them deeply invested in fossil fuels, have used to punish people who have solar power. The government itself has given us a few whacks around the head, to the tune of about $12 a megawatt hour, effectively bringing us back to the point where there is no reward for producing clean electricity rather than carbon-polluting electricity.

The power from solar panels that are being put on roofs now is so cheap that it is probably generating electricity at around 13 cents a kilowatt hour. It actually costs 13 cents a kilowatt hour to deliver the electricity to your house from the Latrobe Valley. These solar customers are making electricity cheaper than it costs to deliver coal-fired electricity, never mind the 3 cents or so for the actual generation of the electricity itself. That says that it is game over for coal-fired electricity.

I just saw an announcement as I walked in here that ANZ — —


Mr BARBER — I heard something. Maybe we will hear more of it; some sort of alternative analysis will perhaps come from Mr Ramsay rather than just the usual ranting against people and things that he does not like and his usual tilting at windmills.

As I was coming in here I saw that the ANZ bank has established a new policy: it will not invest in fossil fuels under the current level of pollution that is occurring. In fact it will be putting aside considerable funds for investment in renewables. It will do this in order to assist with what it calls a 'gradual and orderly transition' from fossil fuels to clean energy. Let us hope it is a lot faster than the pace offered by the Andrews Labor government. Let us hope that the ANZ bank now has a stronger environmental and social conscience than the Andrews government does. Let us hope that technology, social change and changing consumer demands hasten this transition even more.

In this piece of legislation from the government we are not seeing any leadership. We are certainly not seeing any vision. We are not seeing any awareness of the scale of the problem that it needs to get its arms around. We will support the bill, but we will be the ones in this Parliament continuing to advocate for dramatically faster and more serious action than has been put forward here today.