2015-09-17
Debate resumed from earlier this day; motion of Mr JENNINGS (Special Minister of State).
Mr BARBER (Northern Metropolitan) — We return to one of my favourite topics, which is the future energy needs of the state of Victoria and the reforms that need to be made in the entire electricity space. I return to a theme that I started talking about yesterday, and that is that Labor, despite having had four years in opposition and 10 months in government to think about this topic, still does not seem to be able to bring forward something that you would refer to as a plan. Even in the last few days we have seen more and more information coming out about the extraordinary difficulty people are having with their electricity bills.
In my opinion the retail privatisation of electricity in Victoria has been a failure. I say that because despite the fact that a large number of people — up to one-third of them — change their energy provider each year and this figure is often proffered to show that we have a competitive electricity market, in fact the measure being used is churn. There are many other measures we can look at in order to determine if electricity is being traded on a competitive basis. Even so, there are other matters that clearly indicate that new forms of competition are rising. The number of people who are entering into solar panel arrangements or who are systematically reducing their energy bills through energy efficiency is really quite dramatic.
In earlier contributions to the debate on this bill this morning, I heard other members talking about how bad it was that one group of consumers, those with solar panels, would be cross-subsidised by another group of consumers, those who could not afford solar panels. That is the fundamental mistake people are making. The assumption is that we are talking about one group of consumers subsidising another group of consumers, but people who have solar panels are not just consumers, they are also producers. The question we should be turning our mind to is: what is the correct price to pay those producers for the electricity they drop into the grid alongside hundreds of other producers, such as coal-fired power stations, hydropower stations, small generation units associated with hospitals and the like? If you start off by asking the wrong question, you are certainly never going to get the answer. What we should be asking ourselves is: why is it that some producers of electricity, solar panel operators, cannot get a level playing field with other producers, coal-fired power stations?
The decisions this government is making and the events it is letting unfold while it fails to act are making the problem worse. Just last month the Essential Services Commission cut by 20 per cent the payment that household and small business solar generators get when they feed into the grid. Cutting 1.2 cents per kilowatt hour off that solar feed-in tariff was equivalent to $12 per megawatt hour, and in the current set-up of our power grid that is equivalent to about $12 being avoided per tonne of electricity. By being a solar operator, one would be paid an extra $12 per tonne to avoid CO2, which is what I thought this government was all about. This government says it supports a price on carbon. The other mob — the Liberal Party and The Nationals and their federal counterparts — certainly do not support a price on carbon.
Then yesterday we got the Auditor-General's report that said that only 0.27 per cent of consumers were taking advantage of the functionality of their interval meter — some call them smart meters, but they are interval meters. Only 0.27 per cent of consumers have taken up a time-of-use tariff. The time-of-use tariffs and the shifting of the load that they may involve was identified as one of the key benefits of the smart meter program, which has cost us $2.2 billion to date. Yet that benefit is clearly not being realised.
There have been several business cases for smart meters which have clearly identified the benefits that would come from load shifting and the softening of the peak electricity demand when we all had smart meters. We all have them, but almost no-one is taking up the opportunity to get an interval tariff because frankly they have been lied to by their power companies systematically over many years. Some power companies have even been pinged by the Australian Competition and Consumer Commission for sending out people who went door to door and told you lies about your power bill. That is now a matter on the record. These are all the measures that one would have to look at to understand whether in fact we have a healthy functioning market in electricity. Well, we do not.
What is this bill going to do? It is going to give the minister and third parties representing users and consumers the right to participate in appeals regarding decisions on charges related to the installation of smart meters — that is, interval meters. That is jolly good; we have pretty much all got one now. The main benefit that has been achieved from smart meters that was identified in the original business cases is that they sacked all the meter readers, but that cost saving went into the pockets of the power companies. The Auditor-General says that electricity consumers have not been able to get that benefit so far. The bill provides for the minister and consumers to participate in the process if there is an appeal. It is in effect a process bill that allows for participation without having to get leave from the Australian Competition Tribunal, but it does not change the rights of any of the parties.
There is very little to actually say about this bill. I think I have made it pretty clear the bill is not going to set the world on fire, but the electricity market itself is involved in a massive transition. Some of it is driven by changing consumer attitudes to power bills. Some of it is driven by technology. Some of it is driven by other policies that Labor, together with the Greens, has implemented in various parliaments at various times. The consequences of those policies were completely predictable at the time they were implemented. That is why we have a surplus of coal-fired power stations across the grid at the moment. The Australian Energy Market Operator, hardly a radical environmental organisation, says this is the case.
With all these trends moving so steadily, systematically and predictably as the direct response to decisions that have been made in this Parliament — including the expansion of the energy efficiency scheme, which we have applauded and supported — you really wonder why the government has not caught up with the action. My personal fear is that it is too busy dealing with its own internal problems. When your own campaign staff are whistleblowing on you in the media, you definitely have internal problems. It makes you wonder whether any actual governing is getting done week by week around here.