Thursday 18 April 2013

 Hansard of the Legislative Council



Mr FINCH (Rosevears) - Madam President, this bill is the culmination of a lengthy process and the logical result of last year's electricity reform bill. Only history will show us whether it will produce a good result for Tasmania and Tasmanian power consumers.

Some will ask why it is necessary to tamper again with Tasmania's electricity industry. After all, the industry in its original form with the Hydro Electric Commission, and then a corporation, seemed to have served the state well. The confusion over that original attempt at privatisation and then the splitting up of Hydro into three with the addition of Transend and Aurora has just about been cleared up. Now we have another traumatic change.

Tasmania, with its power industry, is no longer an island. We are part of the national power grid, for better or for worse. We have Basslink and we have the National Competition Policy. Therefore we need a new power market framework. The bill before us is complicated but we really need only to consider two factors. Will these changes be in the interests of Tasmanian power consumers; and will these changes ensure the future of a strong and competitive Tasmanian power industry?

The second reading speech presented by the leader stresses transparency and consultation. That is well and good but the man or woman in the street has had very little input because this whole subject is very complicated and it is up to the industry and the government to explain all of those ramifications to consumers. As the member for Windermere said in our briefing, it is going to be about that publicity and that marketing to get the message through to consumers. In the end, the consumers are really only interested in two things, price and reliability. Price will continue to be forced up by outside factors and reliability will always be an issue in Tasmania, but if this bill does not improve these two factors, it will have failed.

Some have suggested that the Tasmanian electricity market, with our population of a couple of Melbourne suburbs, is too small to take advantage of retail market competition. That remains to be seen. Before our briefing today, I had a couple of reservations. As the second reading speech says, this bill opens the electricity retail market to competition for residential and small business customers. What about the big customers? What about the Bell Bay aluminium smelter, long subsidised through that private power deal? I received some comfort in the briefing that in fact that will be a good situation for the Bell Bay Aluminium, Nystar and Cadbury, going on into the future.

Another reservation I have about opening up the market to competition, the reservation strongly conveyed to me of recent times by a number of my constituents, is that feed‑in tariff for home owners with solar panels on their roofs. I might point out, too, that I have a vested interest here as I have just ordered 40 solar panels.

Members laughing.

Mr FINCH - It is hoped by many, and particularly me, that the government will spell out the situation on the feed tariffs urgently. We know that the bill has consumer protection safeguards including retaining retail price regulation for some time and, as the member for Windermere checked into, that right of reversion to a regulated contract to households and small business customers.

The bill is at pains to stage the transition to full retail competition starting next January - 14 January I think was the date - and then progressing through next year until December. This is logical but I foresee customer confusion, if not consternation, as we make this change.

I mentioned earlier the reliability of supply. I am pleased to note that Aurora's distribution business will continue to be owned by the state and then merged with Transend to form an integrated state-owned network company. This is absolutely vital. We have all seen the problems in other states where the network has been privatised, including the sparking of bushfires.

Madam President, this is a very complicated bill but I am inclined to support these changes which, while they are likely to confuse customers, are necessary in a changing world.