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Thursday, 1 November 2012
Page: 8881


Senator XENOPHON (South Australia) (18:39): A number of speakers have already discussed this matter earlier in the day. This is an important report. If the Senate Select Committee on Electricity Prices had sat for a longer period and held further hearings, more could have been achieved. Notwithstanding that, the report is a substantial body of work. At the outset, I want to thank the committee secretariat, led by Ms Sophie Dunstone, for the work they have done. In a very short period of time they have put together a substantial body of work; they organised the hearings and put together the evidence. I am very grateful to Sophie Dunstone and the entire committee for the work they have done.

In is important that we set the scene in relation to this matter. I note that Senator Christine Milne from the Australian Greens suggested an inquiry into electricity pricing. I think that, on any objective analysis, Senator Milne's proposed terms of reference, which were largely picked up by the government, set out some of the key issues of concern. I did not see them as being driven by ideology, since they fairly summed up many of the problems in the electricity sector. As I understand it, the terms of reference were picked up by the government as a result of negotiations for this inquiry with the Greens.

The terms of reference included inquiring and reporting on: identification of the key causes of electricity price increases over recent years; legislative and regulatory options to reduce peak demand; and investigation of mechanisms that could assist households and business to reduce their energy costs, including the identification of low-cost energy efficiency opportunities, opportunities for improved customer advocacy, arrangements to support and assist low-income and vulnerable consumers with electricity pricing, and improved reporting by electricity businesses of their performance in assisting customers to save energy and reduce bills. The terms of reference also included looking at issues of direct load control and pricing incentives, of storage technology, of energy efficiency and of related matters. The terms of reference were broadly all-encompassing.

Not surprisingly, this report effectively comprises four reports. The majority report largely reflects the government's view, but I support a number of the measures dealing with the need for transparency and reform. I want to talk shortly about the issue of consumer advocacy and some of the stories we heard from consumer groups. The coalition put their view forward, and I think their main focus has been the carbon tax. There is no question that the carbon tax has been a factor—not the main factor but an additional material factor—in the cost of electricity price rises. The Australian Greens made a number of recommendations about having a national energy intensity target and a national energy savings initiative. I think that too is worth looking at.

For my part, I think it is important that we look at a couple of issues. I will focus firstly on the issue of the Renewable Energy Target and the way it is structured in terms of the renewable energy credits. I think this is an important issue that deserves further debate, further discussion and ultimately further forensic analysis down the track. I also want to talk about consumer advocacy and people power and the way in which we have some real improvements happening as a result of people raising these issues quite publicly, and I want to thank one of the key drivers of that.

I believe it is important that we have a mandated a renewable energy target of 20 per cent by 2020, and that is a legislated target of 41,000 gigawatts of electricity to be produced by renewable sources in the period 2020 to 2030. My issue is not with that target but with the way the target is achieved through an over-reliance on one form of technology. It favours a form of technology—wind power—that does not provide reliable baseload power. That means that coal fired power stations need to be kept on standby once the wind dies down. I think Senator Chris Back from Western Australia, who was the Administrator of Rottnest Island a number of years ago, can tell us a few stories about the unreliability of wind turbines there.

My concern is that we have not put the investment into baseload reliable renewables such as geothermal, solar thermal and tidal power—that is where the future is. Those parts of the renewable energy market have been starved for investment because the system is skewed towards wind power. There need to be incentives for the use of renewables which provide reliable baseload power. I think that time will tell us that the efficiency, the effectiveness and the cost to consumers of wind power—because of its intermittent nature and its unreliability—mean that it is not a good thing for consumers and, ultimately, not a good thing for the environment. Unless you have reliable baseload power, you will go backwards, and not having reliable baseload power does distort the market in a way that is very concerning. We need to tackle the issues of unreliable baseload power, and we need to look at the most cost-effective way of reducing the impact on the environment. I do not have a difficulty in having gas fired power stations, for instance, as a transitional measure, because gas is 40 per cent or 50 per cent cleaner than coal. In saying all this, I am not criticising the committee, but I think that the committee will need to look, further down the track, at these big issues of unreliable baseload power and the protection of the environment.

I turn now to the issue of consumer advocacy, because we heard from witnesses some terrible stories of the way that some retailers have behaved, and one consumer group representing Victorian consumers made the point that the fact that Victoria has the highest churn of consumers switching electricity companies does not mean that the market is working; on the contrary, it shows that the market is in some respects dysfunctional. I pay tribute to the work that Leon Byner, who is a radio presenter on radio FIVEaa, has done in giving consumers a real voice in my home state of South Australia. His program raised issues about exit fees, and the state government has announced that exit fees will go. Leon played a key role leading up to this change. His program exposed the activities of door-to-door shonks, including an attempt to sign up to a power contract a child who was a minor. One of the more incredible stories I heard—which, unfortunately, was borne out by the fact that it is now being investigated very seriously by the ACCC—was of a man entering a house unauthorised, refusing to leave and saying, allegedly, 'It's okay; I'm from AGL.' That, to me, is unsatisfactory conduct. I have had complaints at my office, following Mr Byner's program, of people being offered discounts and getting nothing like the discounts they were offered. That sort of unethical behaviour must be tackled by some decent consumer protections. Rod Sims, the chairman of the ACCC, has publicly thanked Leon Byner's program on radio FIVEaa for the work that it has done on exposing rorts and unacceptable behaviour, and the fact that the ACCC is investigating them is welcome.

We need to make the point that people power does make a difference and that consumers, by speaking out about unfortunate and unethical practices, can drive changes in enforcement and in policy. It is very interesting that Senator Anne McEwen, who has participated in this inquiry and is from my home state of South Australia, made the point on Leon Byner's program that someone from an electricity retailer had tried to strong-arm her but that she had told them where to go, in—I am sure—very polite but no uncertain terms. I am sure that Senator McEwen can look after herself in the face of that sort of behaviour, but many others cannot. The practices raised on Leon Byner's program on radio FIVEaa highlighted the human face of how consumers have been affected.

This committee inquiry has been useful. We need to go further to look at the matters which I have raised and which will not go away. Too many consumers are hurting because of massive increases in electricity prices, but there are things that we can and should do to ameliorate the impact of the increases and to improve our system for the benefit of all consumers.

Question agreed to.