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Thursday, 10 October 1996
Page: 3925


Senator SHORT (Assistant Treasurer) —I present the government's response to the report of the Economics References Committee entitled Eastlink: The interconnection of New South Wales and Queensland electricity grids with a high voltage powerline . I seek leave to incorporate the document in Hansard and to move a motion in relation to the document.

Leave granted.

The document read as follows—

Commonwealth Government response to the report of the Senate Economics References Committee inquiry into the proposal to interconnect the New South Wales and Queensland electricity grids (Eastlink) with a high voltage powerline.

Preamble

Summary of the ERC Inquiry process and outcomes

On 30 March 1995, the Senate agreed that the Economics References Committee (ERC) conduct an inquiry into aspects of the Eastlink proposal. It was agreed that submissions were to be received by 2 June 1995, with the ERC to report on or before 28 September 1995.

The ERC released its Report out of parliamentary session on 18 December 1995. The ERC's findings are based on 274 written submissions, over 1,000 form letters and evidence provided at public hearings in Armidale, Toowoomba, Melbourne and Canberra conducted over October/November 1995. ERC members also conducted—site inspections of areas affected by the Eastlink proposal.

The Committee's role in examining the Eastlink proposal was limited, as the jurisdictional responsibility for electricity supply rests with the State and Territory Governments. The ERC Report notes that its primary function was providing an opportunity for communities to raise their concerns about the Eastlink proposal.

The ERC Report details the communities' concerns relating to the economic, environmental, health and social impacts of the Eastlink proposal. The ERC's major recommendations focus on health issues, the community consultation process and compensation arrangements for affected property owners. Incorporated in the ERC document is a minority report by Senator John Woodley (Australian Democrat, Queensland) recommending that governments reconsider their commitment to Eastlink until the concerns raised in the Report have been resolved.

Implementation of the ERC recommendations, where appropriate, is largely the responsibility of the New South Wales and Queensland Governments and their respective electricity authorities. The broader issues of future involvement of communities in energy matters and health impacts of electric and magnetic fields (EMFs) have been referred by the ERC to all state governments and relevant scientific research agencies respectively. The Commonwealth was specifically requested to examine the greenhouse gas emission consequences of Eastlink's likely impact on coal consumption.

The ERC implied in its Report that Eastlink was expected to proceed, and that the ERC did not oppose the national electricity reforms agreed by the Council of Australian Governments.

The ERC also notes that the overwhelming majority of submissions were provided by individuals and groups directly affected by the likely siting of the proposed Eastlink powerline. The Report is structured in such a way as to outline the positions of both the Eastlink opponents and proponents, but does not give any indication of the extent to which the ERC evaluated the information provided in each submission and at the public hearings.

Media reports relating to the communities' concerns over Eastlink have indicated a limited acceptance of key aspects of the proposal. The ERC notes community scepticism over Eastlink's benefits, and perceived hidden agendas of participants involved in assessment of Eastlink's feasibility. It is noted that the ERC has not considered the impact of such factors, other than to suggest that community misunderstanding of the Eastlink project was the result of an ineffective consultation process.

Developments relating to Eastlink since the release of the ERC Report

Since the release of the ERC's report on the Eastlink proposal, the Queensland State Government has changed. The incoming Coalition Government announced on 18 March 1996 that in line with its pre-election commitment, grid interconnection along the route under consideration for the Eastlink proposal would be cancelled in preference of establishing greater self sufficiency and reliability in electricity generation. Importantly the Queensland Government did not rule out the possibility of interconnection in the future.

Queensland initiated a competitive tendering process to identify new electricity supply options to meet its future energy needs over the period 1999-2000. On 30 July 1996 the Queensland Government announced the selection of the three preferred bidders to provide the State with a total of 744 MW of new generating capacity. Longer term (beyond 2000) energy options could include the expansion of the Tully Millstream hydro-electric scheme, the expansion of other renewable energy sources, construction of new coal based generation plant and interconnection options other than along the route under consideration for Eastlink.

The Queensland Government has indicated its support for the principle of competitive reform of the Queensland electricity supply industry, and to the national electricity market. On 1 August 1996, the Queensland Mines and Energy Minister, the Hon Tom Gilmore, together with the New South Wales Treasurer and Energy Minister, the Hon Michael Egan and the Commonwealth Minister for Resources and Energy, Senator the Hon Warwick Parer, announced in principle agreement to electricity grid interconnection between the States.

Commonwealth role in interstate grid interconnection

Under the provisions of the Australian Constitution jurisdictional responsibility for the electricity supply industry rests with the State and Territory Governments. In this context progression of grid interconnection between New South Wales and Queensland proposals are the responsibility of the respective State Governments. The Commonwealth's role is essentially one which seeks to facilitate industry reforms that are consistent with the national interest.

The previous Commonwealth Government's involvement with the Eastlink proposal, and therefore in the ERC inquiry process, is linked to its agreement to contribute up to $7 m for a feasibility study into the proposal over the period 1993-94 to 1995-96. The December 1993 Memo randum of Understanding (MOU) between the Commonwealth, New South Wales and Queensland Governments specified that Commonwealth funding was limited to the feasibility study, and was not to be used in the acquisition of easements or construction of the Eastlink interconnect.

The focus of the Eastlink feasibility study was to determine whether the interconnection is technically, economically and environmentally feasible, and selection of the powerline route. If the results of the feasibility study were favourable and a decision taken to proceed with the project, then Eastlink could be constructed before the end of 1999.

The Commonwealth Government notes that the three year feasibility study, including the environmental impact statement, would have provided a better understanding of the unresolved issues of the final transmission line route alignment, and the likely economic, environmental, health and social consequences of Eastlink.

Since the election in March this year, the Commonwealth Government has worked towards the introduction of a national competitive electricity market, as agreed by the Council of Australian Governments. The Commonwealth Government supports inter-state grid interconnection and/or augmentation, where commercially and environmentally viable, as an important means of maximising the benefits from the national electricity market. This commitment would extend to consideration of alternative options for interconnection in the future by the Queensland and New South Wales Governments.

The Commonwealth Government however is conscious of the need for the communities' concerns to be heard, and is sensitive to the sorts of concerns expressed in the Eastlink feasibility study's consultative process and re-iterated over the course of the ERC inquiry.

From a national perspective, grid interconnection would mark an important expansion of the competitive national electricity market to be introduced in 1996. Queensland would join New South Wales, the Australian Capital Territory, Victoria and South Australia to provide a major interconnected market across eastern and southern Australia. Queensland would in the future have the potential to be a significant supplier into the national grid of both conventional and renewable sourced generation.

In terms of the creation of a national competitive electricity market, the Australian electricity industry has recently undergone reforms that have resulted in marked increases in efficiency. However, it has been recognised that further significant gains can be achieved through the introduction of competition.

The introduction of a national competitive electricity market as agreed by the Council of Australian Governments has the potential to provide significant benefits to all electricity users. Annual benefits of the electricity reforms have been estimated to be around $5 billion, or approximately 20% of the total benefits expected from the national competition policy agenda.

The move to a competitive electricity industry structure will allow a further range of specific energy efficiency benefits to be realised. For example, the market will assist in promoting electricity conservation, the growth of independent energy traders and energy service providers, and removal of price distortions (such as cross subsidies in tariffs). While governments continue to address the issue of including environmental externalities in defining least cost energy services, the introduction of competitive electricity market reforms is fully consistent with the delivery of least cost energy services to all electricity users.

At the Council of Australian Governments' meeting of 11 April 1995, Heads of Government signed three inter-governmental agreements. Under the National Competition Policy and Related Reforms Agreement, States and Territories may be eligible for annual Competition Payments from the Commonwealth amounting in total to $4.2 billion up to 2005-06. Competition Payments to States and Territories are an important component of progressing the reform of the electricity industry. They mark the broader importance of electricity industry reform to the nation at large.

SPECIFIC COMMENTS ON ERC RECOMMENDATIONS AND CONCLUSIONS

Chapter 2—Health and Electromagnetic Fields

"In the light of such conflicting evidence, and because it is not possible to scientifically prove a negative, the Committee is unable to totally dismiss the possibility that there may be adverse effects. Similarly, the Committee is unable to conclude that a definite link between high voltage power lines and adverse effects on human health exists and thus that any new policy recommendations need to be made." (Paragraph 2.66).

.   No Commonwealth action required.

"However, the Committee is able to conclude that simply the fear of detrimental health effects, whether real or imaginary, is in itself having an impact on the lives of some individuals affected by the Eastlink proposal. In acknowledging these community concerns, the Committee takes a similar stand to that of the Gibbs report. The Committee agrees that, as a minimum policy or until such evidence suggests otherwise, the concept of `prudent avoidance' should continue to be practised by government and power authorities." (Paragraph 2.67).

.   Supported.

"The Committee therefore concludes that, in the case of Eastlink, `prudent avoidance' should mean siting the line as far as possible from houses, outbuildings and other farm facilities." (Paragraph 2.70).

.   Supported.

"In the absence of extensive field studies on livestock, the Committee is not able to conclude that high voltage power lines affect the health of livestock and crops, nor is it able to conclude that they do not. The Committee therefore recommends that scientific studies should be carried out in Australia on the possible effects of high voltage powerlines on stock and crops." (Paragraph 2.72).

.   Supported.

"The Committee therefore concludes that compensation by power authorities should be extended to those property owners who suffer an economic loss as a result of the construction of Eastlink, regardless of how that loss is brought about." (Paragraph 2.74).

.   No Commonwealth action required—the issue of compensation is a matter for the relevant state governments/authorities.

While the recommendations above have been examined in the context of the Eastlink proposal, the associated issues are relevant to all existing and future high voltage transmission powerlines, and to the use of electricity in general.

The Commonwealth Government notes that the potential health impacts of electric and magnetic fields (EMFs) have caused considerable concern within the communities potentially affected by the Eastlink proposal. This could reflect the situation that even with major continuing scientific research programs at the global level, a clear link between EMFs and health problems has been neither established nor disproved. The Commonwealth Government notes that reflecting this situation the ERC did not attempt to make any judgement of the possible health impacts of EMFs.

In recognition of the difficulty of disproving any significant health impacts, the electricity supply industry has adopted a `prudent avoidance' approach to managing exposure to EMFs. The Report notes that this principle has previously been endorsed as an appropriate means of addressing the EMFs health issue, and the ERC maintains that this should continue to be the case. The Commonwealth Government supports this position.

The Commonwealth Government notes that the electricity authorities responsible for progressing the Eastlink proposal, TransGrid (New South Wales) and Powerlink (Queensland), have advocated the `prudent avoidance' policy as part of their normal operational procedures. The Commonwealth Government understands that, had the Eastlink proposal proceeded, the `prudent avoidance' policy would have been followed with the powerline being constructed as far as possible from houses, schools and other similar structures. This is entirely consistent with the views of the ERC, and is expected to be the case for future high voltage grid interconnections.

The Commonwealth Government notes that prudent avoidance of EMFs is often discussed as an appropriate analogy to the "as low as reasonably achievable" (ALARA) principle used for exposure to ionising radiation. The quantifiable effects of exposure to ionising radiation have been well-established and this has allowed for exposure limits to be set. As this is not the case for exposure to non-ionising EMFs, the ALARA principle is implicit in the concept of prudent avoidance, on the assumption that "less is best".

The Commonwealth acknowledges that the appropriateness of prudent avoidance as a national public health policy needs to be assessed on the basis of the understanding of potential health effects of EMFs at any given time.

Chapter 3—Environmental Impact

"The Committee questions the practice of carrying out an environmental impact assessment of a proposal when alternatives have not been included in the detailed Environment Impact Statement and when siting of the line is clearly going ahead before the Environment Impact Statement is complete." (Paragraph 3.75).

.   Not supported—consideration of Eastlink alternatives was an important element of the Eastlink environment impact assessment process, which was being conducted in accordance with the relevant State and Commonwealth legislation.

The ERC notes that there would have been some environmental impacts associated with the Eastlink project. In consideration of the concerns identified during the inquiry, the ERC also noted that landholders and conservationists had taken a "worst case scenario" approach in assessing this potential environmental damage.

In February 1995 the New South Wales and Queensland Energy Ministers announced the selection of the Western corridor as the preferred corridor for the Eastlink interconnection. The selection was based on extensive community consultation undertaken in Queensland and New South Wales, to balance community views and social, environmental, health, land use, technical and cost impacts. In accordance with the provisions of the relevant State and Commonwealth legislation, the environmental impact assessment focused on the Western corridor.

An accurate assessment of the environmental impact of the Eastlink transmission line was dependent upon the final route of the powerline, which was being determined in conjunction with the environmental impact assessment process. This process was critical to the conduct of the Eastlink feasibility study and the ultimate decision on the project's future. The process followed was consistent with New South Wales, Queensland and Commonwealth environmental assessment legislation.

The ERC notes that environmental impact assessments in Queensland are subject to the provisions of the Electricity Act 1994 and the Environment Protection Act 1994, while in NSW the relevant legislation is the Environment Planning and Assessment Act 1979. Under the conditions of the Eastlink feasibility study, a single environmental impact assessment was to be conducted over the Western Corridor which satisfies the requirements of the state legislation, as well as the Commonwealth's Environment Protection (Impact of Proposals) Act 1974.

It is worth noting that the terms of reference for the EIS specifically addresses the issues of consideration of alternative interconnection options. The EIS terms of reference specific requirements had been discussed and agreed amongst the assessing agencies, and followed an extensive consultation process which sought to identify the affected communities' concerns. The relevant requirements are detailed in Attachment No. 2, Part B of the EIS terms of reference (at Annex A).

The Commonwealth Government considers that the Eastlink environmental impact statement was being conducted in a manner consistent with the requirements of relevant State and Commonwealth legislation, and these same legislative requirements will be sufficient to adequately assess the environmental feasibility of future interconnections options. It is also worth noting that under the existing Commonwealth, New South Wales and Queensland legislation environmental impact assessments are project specific, reflecting the difficulty in attempting to ascertain the environmental impact of, in the case of Eastlink, powerlines when the route of the powerline is not defined.

It should also be noted that there are no legislative restrictions on electricity authorities seeking to negotiate easements with potentially affected landholders in advance of precise line route identification. This allows the authorities the opportunity to better identify potentially adverse impacts of suggested route options, and would assist in the timely construction of the powerline subject to project approval from the relevant State Governments.

Chapter 4—Social and Local Economic Impact

"The Committee recommends that any detrimental impact on farm operations should be the subject of compensation." (Paragraph 4.97).

.   No Commonwealth action required—compensation is an issue for the relevant state governments/authorities.

"The Committee holds the view that, if the power authorities are so sure that the property market will return to normal after Eastlink is completed, they should buy now, at pre-Eastlink valuation, any property that has been on the market and that has not achieved a sale because of speculation about Eastlink." (Paragraph 4.101).

.   No Commonwealth action required—the Queensland Government has indicated that interconnection along the "Eastlink" route under consideration will not proceed.

"The Committee recommends wider and more comprehensive provisions, which may include provision for an independent conciliation process for individuals or groups affected." (Paragraph 4.105).

.   No Commonwealth action required—compensation provisions are issues for the relevant state governments/authorities.

"The Committee concludes that while the power authorities put a large effort into public consultation, the methods used were not accepted by many of those people affected by the proposed power line. The cumulative effect has been considerable social disquiet and stress." (Paragraph 4.108).

.   No Commonwealth action required—this is an issue for the relevant state governments /authorities.

"The Committee suggests to all state governments that there would be merit in establishing a process whereby communities and professionals could be more directly involved in debate on energy matters. Through such a process, parliaments could monitor community reaction to energy projects, as well as provide a more accessible and flexible grievance mechanism." (Paragraph 4.111).

.   No Commonwealth action required—this is an issue for the relevant state governments.

The ERC recommendations and conclusions relating to this chapter of the Report draw upon perceptions of the communities affected by Eastlink over the impacts of the powerline on matters such as property values, agricultural practices (such as agricultural spraying, electric fencing and organic farming), health and regional tourism.

In consideration of these matters the ERC turned its attention to the compensation arrangements and the Eastlink feasibility study's consultation process. These matters are issues for the New South Wales and Queensland Governments to address, as the Commonwealth Government does not have jurisdictional responsibility for determining compensation arrangements relating to the Eastlink proposal. There are well established legislative procedures in place in New South Wales and Queensland to address compensation issues. It is noted that the Committee has provided suggestions on how the State Governments could apply compensation arrangements.

As a general comment, the Commonwealth understands that the communities were consulted over potential compensation, and that provision of detailed advice on compensation was provided to those property owners within the Western Corridor.

The Commonwealth Government notes that the issue of the effectiveness of community consultation processes is a difficult matter to evaluate. While the ERC notes that the New South Wales and Queensland electricity authorities made every effort to consult the community over the Eastlink proposal, one of the key factors of concern to the community was the perception that the community was not asked whether Eastlink was necessary.

The Commonwealth Government considers that in a competitive national electricity market the need for grid interconnection between New South Wales and Queensland will be determined by commercial considerations. Such interconnection would, of course, only proceed subject to the findings of an appropriate feasibility study and the required environmental impact statement process.

Chapter 5—Economic Considerations

"The Committee accepts that the analysis carried out by the Australian Bureau of Agricultural and Resource Economics examined the general economics of interconnection through a high voltage power line, and was not sufficiently detailed to draw conclusions about the specific case of Eastlink. The Committee further accepts that the model demonstrated, in general terms, that electricity interconnection through a high voltage power line would be economic." (Paragraph 5.20).

.   Supported.

"However, because a specific cost/benefit analysis for Eastlink was not available, the Committee is unable to comment on the specific case of this proposal." (Paragraph 5.21).

.   Noted.

"The Committee believes that, in the interests of good public relations, the power authorities involved should make available to the public a more detailed cost/benefit analysis of Eastlink." (Paragraph 5.23).

.   No Commonwealth action required—the Queensland Government has indicated that interconnection along the "Eastlink" route under consideration will not proceed.

In assessing the economic benefits of the Eastlink proposal the ERC made references to the reported benefits as argued by the relevant state electricity authorities, and the perceptions of the community to these estimated benefits.

Advice from the relevant state agencies indicated that the 500 MW interconnection would eliminate the need for about 400 MW new capacity in Queensland and approximately 350 MW in New South Wales, and would have deferred the need for major new generating capacity until after the turn of the century. As an indication of these benefits, the elimination of 750 MW of potential gas turbine plant has been estimated by those agencies to provide a saving of around $500 million.

Grid interconnection forms an important component of the national electricity market being introduced under the auspices of the Council of Australian Governments (COAG). The competition policy reforms endorsed by COAG at its meeting on 11 April 1995 are expected to deliver potential benefits to the nation amounting to an increase in real annual GDP growth of around $23 billion. The electricity reforms are projected to deliver over 20% of these benefits, or some $5.0 billion in additional real GDP growth. The Commonwealth strongly supports grid interconnection, if economically and environmentally viable.

In recent years, the Australian electricity industry has undergone significant reforms which have resulted in marked increases in efficiency. It is recognised that further significant gains can be achieved through the introduction of competition. The present reforms are directed at achieving greater efficiency and industry competitiveness, more efficient use of resources, lower electricity prices, greater choice for customers, and enhanced domestic and international performance. Competition is considered the most effective driving force to achieve these objectives.

While not specific to Eastlink, the Australian Bureau of Agricultural and Resource Economics has undertaken studies that have confirmed national benefits of grid interconnection. The Commonwealth Government welcomes the ERC's endorsement of this assessment.

It is worth noting that the EIS terms of reference specifically required an assessment of the economic benefits of the Eastlink proposal. A comparison of Eastlink's economic benefits and those associated with other options to meet Queensland's electricity requirements (including alternative power sources, alternative technologies and demand management) is also specified. The relevant requirements are detailed in Attachment No. 2, Parts A and B of the EIS terms of reference (at Annex A).

The issue of whether more detailed cost/benefit analyses for Eastlink, or those related to future interconnection options, should be released is a matter for the relevant New South Wales and Queensland agencies to decide. The Commonwealth Government notes that in a competitive national electricity market commercial confidentiality concerns would need to be considered with respect to the release of such material.

Chapter 6—Electricity Consumption and Greenhouse

"The Committee therefore recommends that the Commonwealth investigate in detail the likely impact of Eastlink on coal consumption and the implications of any change in that consumption for greenhouse gas emissions having regard to its international obligations." (Paragraph 6.29).

.   Supported—the Commonwealth acknowledges its continuing obligations relating to reduction of greenhouse gas emissions, but on the specific matter of Eastlink considers that this is primarily an issue for the relevant state governments.

The Commonwealth Government acknowledges its obligations under the National Greenhouse Response Strategy and the Framework Convention on Climate Change, and will seek to work co-operatively with the State and Territory Governments to meet the associated greenhouse emission objectives.

Australia has continuing obligations under the Climate Change Convention to provide an inventory of greenhouse gas emissions and sinks. The development of that inventory is jointly undertaken by the Commonwealth and the States under arrangements that evolved out of the National Greenhouse Response Strategy. The Commonwealth will also calculate inventory projections which will pick up energy sector developments on greenhouse gas emissions.

As jurisdictional responsibility for the electricity supply industry rest with the states it naturally falls to the responsible state jurisdictions to include an assessment of electricity industry developments such as grid interconnections when undertaking greenhouse gas inventory reporting.

The Commonwealth Government notes that the environmental benefits from the Eastlink proposal could arise from the sharing of reserve electricity capacity, the reduced need for additional power generation plant, and the energy savings resulting from the more efficient use of energy resources.

The anticipated greenhouse impact of Eastlink in the context of a competitive electricity market was assessed as one in which emissions are lower than otherwise would have been the case, but difficult to quantify at this stage. Introduction ofcompetitive electricity market reforms, including multi-state electricity trade via grid interconnections, are intended to remove any access or regulatory barriers to more greenhouse friendly fuel sources such as natural gas and renewable energy sources (such as solar and wind power).

The UK experience is that with the introduction of the competitive market there has been a shift away from coal powered generation to gas—which underpins the UK Government's claim that it is close to meeting the implied target under the climate change convention.

In Australia, the Australian Bureau of Agricultural and Resource Economics is forecasting that the use of natural gas as a fuel input to electricity generation is set to increase from 9% in 1993-94 to 14% by 2009. The related reform of the gas industry provides opportunities for both the substitution of gas for electricity in end-use consumption, and the use of gas as a fuel for electricity generation.

In respect of the specific impact of Eastlink on greenhouse gas emissions it is noted that this issue was being addressed as part of the environmental impact statement. The EIS terms of reference identifies specific requirements of the environmental impact assessment for Eastlink, and includes consideration of the strategic options to meet power demand, compliance of the strategic options with relevant policies, and justification for the preferred strategy. The relevant requirements are detailed in Attachment No. 2, Part B of the EIS terms of reference (at Annex A).

Chapter 7—Renewable Alternatives

"Despite the outcome of the Eastlink interconnection, the Committee re-iterates the opinion expressed in the Report on Gas and Electricity that Queensland would be an ideal place for increased research and development of renewable energy options." (Paragraph 7.33).

.   No Commonwealth action required—this is an issue for the relevant state governments/authorities.

Australia's international competitive advantage in electricity is based on coal fired electricity generation. The cost of supplying coal fired electricity in Australia continues to decline, further improving Australia's international competitiveness in energy intensive production. At the same time, the overall environmental performance of power generation capacity continues to improve.

Electricity retailers are already seeking a competitive advantage by promoting innovative schemes aimed at encouraging development of renewable/alternative electricity generation. Appropriate grid access and pricing policies will lead to moresensible patterns of energy use, and by delivering non-distortionary price signals will encourage greater use of renewables, cogeneration and remote area power systems where they are cost effective.

The Commonwealth welcomes the communities' enthusiasm for renewable energy, and the indications that the community is prepared to utilise renewable based technologies that are currently economic and available. The Commonwealth recently provided support for a Co-operative Research Centre on Renewable Energy, part of which is to be located in Queensland. This provides a clear signal that continued development of such technologies will play a significant role in meeting Australia's future energy requirements.

The use of renewable sources of energy are sometimes limited by intermittent availability, which can cause operational problems when they are used on a large scale. The establishment of a grid interconnection between Queensland and New South Wales would improve the ability of the electricity supply network to accommodate the use of renewable sources of energy on a large scale.

Senator Woodley's Minority Report

"Given the enormous amount of money which will be expended on Eastlink, the Democrats believe the governments involved should reconsider their commitment to the proposal until such time as the concerns outlined in the report, and in these additional comments have been adequately investigated. Such investigations must be open to public input and scrutiny."

.   No Commonwealth action required—the Queensland Government has indicated that interconnection along the "Eastlink" route under consideration will not proceed.

The issues raised in Senator Woodley's additional recommendation have largely been covered in responding to the recommendations of the principal Report.

The Eastlink environmental impact statement was based on terms of reference that specifically address the communities' concerns. A decision by the New South Wales and Queensland Governments on whether to commit the $300 m construction cost for the project were to have been made after completion of the feasibility study, which included the environmental impact statement. This is consistent with Senator Woodley's recommendation.

While the possibility of adverse health impacts of EMFs cannot as yet be disproved, the Commonwealth considers that exposure to EMFs should be minimised as far as practicable. This is consistent with the ERC recommendation on this matter, particularly with reference to maintaining the policy of `prudent avoidance'.

Senator Woodley supports suggestions that the National Grid Management Council (NGMC) is a commodity vendor trying to sell more electricity as opposed to the development of energy services market. The NGMC, which is an independently chaired inter-jurisdictional advisory body, has produced a report "Demand Management and Energy Efficiency in the Competitive Market" (February 1995) which demonstrates its efforts in identifying and progressing demand side reforms. As a specific example, recommendation 3 in the NGMC report states:

"[The NGMC recommends] That Governments support the development of a robust competitive energy efficiency services industry through:

.   continuing existing programs and introducing appropriate new programs and initiatives that facilitate this outcome;

.   reviewing the funding and administration arrangements currently applying to existing programs;

.   determining appropriate funding and administration arrangements which will apply to new programs and initiatives.

These arrangements should be introduced at the commencement of the competitive electricity market as part of the transitional arrangements."

The Commonwealth Government supports the recommendations of the NGMC report and will work with the States and Territories in relevant fora to achieve their implementation.

The NGMC also notes that the key objectives of the national market reforms are twofold:

.   encouraging the most efficient, economical and environmentally sound development of the electricity industry consistent with key national and State policies and objectives

.   to provide a framework for long-term least cost solutions to meet future power supply demands including the appropriate use of demand management.

In its report the NGMC suggests that the key principles in achieving these broad objectives is the delivery of energy services to customers in a competitive environment at least cost. Attaining this least cost outcome requires equal consideration of both supply-side and demand-side options in meeting customer needs.

"Least cost" is further defined as the least cost from the perspective of society as a whole, rather than from the perspective of any one participant in the electricity supply industry. The cost of environmental externalities are not yet included in the definition of "least costs" as it is suggested that this issue should be the subject of government policy decisions across all energy forms, not just electricity. The Commonwealth acknowledges that development of a vigorous energy services sector is expected to facilitate this least cost approach through the competitive national electricity market.

ANNEX A

ATTACHMENT NO. I

General Requirements for the Environmental Impact Statement for Eastlink

Pursuant to Schedule 2 of Clause 84 of the NSW Environmental Planning and Assessment Regulation 1994 (the EP&A Regulation), an EIS must include:

1. A summary of the environmental impact statement.

2. A statement of the objectives of the development or activity.

3. An analysis of any feasible alternatives to the carrying out of the development or activity, having regard to its objectives, including:

(a)   the consequences of not carrying out the development or activity; and

(b)   the reasons justifying the carrying out of the development or activity.

4. An analysis of the development or activity, including:

(a)   a full description of the development or activity; and

(b)   a general description of the environment likely to be affected by the development or activity, together with a detailed description of those aspects of the environment that are likely to be significantly affected; and

(c)   the likely impact on the environment of the development or activity, having regard to:

   (i)   the nature and extent of the development or activity; and

   (ii)   the nature and extent of any building or work associated with the development activity; and

   (iii)   the way in which any such building or work is to be designed, constructed and operated; and

   (iv)   any rehabilitation measures to be undertaken in connection with the development or activity; and

(d)   a full description of the measures proposed to mitigate any adverse effects of the development or activity on the environment.

5. The reasons justifying the carrying out of the development or activity in the manner proposed, having regard to biophysical, economic and social considerations and the principles of ecologically sustainable development.

6. A compilation, (in a single section of the environmental impact statement) of the measures referred to in item 4(d).

7. A list of any approvals that must be obtained under any other Act or law before the development or activity may lawfully be carried out.

Notes:

1. For the purposes of this Section, "the principles of ecologically sustainable development" are as follows:

(a) The precautionary principle—namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

(b) Inter-generational equity—namely, that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations.

(c) Conservation of biological diversity and ecological integrity.

(d) Improved valuation on and pricing of environmental resources.

2. The matters to be included in item (4)(c) might include such of the following as are relevant to the development or activity:

(a)   the likelihood of soil contamination arising from the development or activity;

(b)   the impact of the development or activity on flora and fauna;

(c)   the likelihood of air, noise or water pollution arising from the development or activity;

(d)   the impact of the development or activity on the health of people in the neighbourhood of the development or activity;

(e)   any hazards arising from the development or activity;

(f)   the impact of the development or activity on traffic in the neighbourhood of the development or activity;

(g)   the effect of the development or activity on local climate;

(h)   the social and economic impact of the development or activity;

(i)   the visual impact of the development or activity on the scenic quality of land in the neighbourhood of the development or activity;

(j)   the effect of the development or activity on soil erosion and the silting up of rivers or lakes;

(k)   the effect of the development or activity on the cultural and heritage significance of the land.

Attachment No. 2

Specific Requirements for the Environmental Impact Statement for Eastlink

Pursuant to clause 85 of the NSW Environmental Planning and Assessment Regulation 1994, the Director General of the NSW Department of Urban Affairs and Planning requires that the following matters be specifically addressed in the EIS. These specific requirements have been discussed and agreed among the assessing agencies. It should be noted that the requirements apply to the whole proposal. If an issue is only relevant to one State, it should be clearly stated in the EIS.

PART A—Need for the Proposal

1. Need for the Proposal—with particular reference made to the power demand of Queensland, NSW and areas to be served by the resulting transmission grid, the deficiencies of the existing system, and the need for a Eastern States transmission line network.

PART B—Strategic Assessment

2. Strategic Options Assessment

(a) Consideration of the Strategic Options to meet Power

Demand—including demand management; utilising alternative power supply sources and alternative technologies such as co-generation; national transmission grid connection between NSW and Queensland; upgrading or constructing other power stations and extending the transmission grid in Queensland to balance power source with distance of transmission; or the combination of all or part of them. Assessment of the relative merits of coals likely to be burnt in Queensland and NSW in particular related to greenhouse gas implications at the major power generating sources. Estimation of the amount of greenhouse gases emission and potential health risk of each strategic option. Consequence of the do-nothing option.

(b) Compliance of the Strategic Options with Relevant Policies—including relevant policies, strategies, international agreements and strategic recommendations of inquiries of the Commonwealth and State Governments, in particular on the minimisation of greenhouse gases emission, ecologically sustainable development, nature conservation, the National Competition Policy (Hilmer Report), the 1992 Senate inquiry on the generation, transmission, distribution and use of electricity and gas in Australia, and the 1995 Senate inquiry on the proposal.

(c) Justification for the Preferred Strategy—with assessment of the comparative economic and environmental costs, benefits and risks of the strategic options including ability to reduce greenhouse gases emissions and potential environmental and health risk, and reference to any relevant consultation conducted.

3. Strategic Impact Assessment

(a) Cost and Use of Electricity—opportunity for reducing electricity costs, the flow-on economic impact, and risk of encouraging more electricity usage and/or wastage under the preferred strategy.

(b) Economic Impact of the Preferred Strategy—on communities in either State due to inter-State electricity trading, shifting of unemployment opportunities, changes in electricity prices, savings in infrastructure investment etc. under the preferred strategy.

PART C—Project Justifications and Details

4. Project Objectives and Alternatives

(a) Project Objectives—objectives of providing the proposed transmission line and the compatibility and relationship of the proposal with the existing regional transmission line network and national grid, including any provisions for rationalisation with existing lines to avoid proliferation and any proposals for longer term augmentation of the proposed link and the regional and national networks.

(b) Consideration of Alternatives—having regard to the objectives of the proposal, the key physical and engineering constraints, pertinent environmental and economic factors and community concerns. Alternatives to be considered include different transmission capacity, design life and capacity of the line, alternative starting and ending points, corridor, routes and the do-nothing option. Clear reasons for rejecting the alternatives. A summary of the environmental trade-offs of each option should be presented. A summary of the outcome of the community consultation process undertaken during the Corridor Selection process should also be included.

(c) Relationship to Findings of the 1995 Senate Inquiry—Consideration of the project level findings and recommendations of the 1995 Senate Inquiry into the proposal.

5. Description of the Proposal

(a) Illustration of the Alignment—using maps and diagrams to indicate clearly the proposed transmission corridor and preferred route with respect to developments, residences, cultural, heritage, agricultural, extractive industry and environmental features and constraints.

(b) Easement Description—any existing easements and new easement requirements, including details of and justification for dimensions of the easement, extent of clearing, restrictions on the activities within the easement, and construction and maintenance access requirements. Assessment on how existing roads and access easements could be utilised for maintenance access to the proposed transmission line.

(c) Design Objectives—capacity and design life of the proposed transmission line and its associated works and infrastructure, and their future role in the National Grid.

(d) Physical Details of Structures—the form, physical dimensions and construction materials of the transmission towers, lines, conductors, other major structures and associated facilities.

(e) Construction Details—including staging of works, method to construct, install and assemble major structures, locations of work sites, workshops/fabrication sites and work camps, and transportation arrangements, services provisions including water and electricity supply, waste and wastewater disposal, site drainage arrangements, temporary and permanent earthworks, sources of major construction materials, materials storage/handling and spoil disposal arrangements, hours of operation, size of workforce and local employment opportunities, and site management and rehabilitation plans.

(f) Operation/Maintenance Details—information on activities related to the operation and maintenance of the transmission line and its associated facilities including how frequently the operational and maintenance activities would be required and the hours of operation, opportunities for community access/inspection, provisions for regrowth control and to minimise fire and storm damage risk.

(g) Decommissioning Details—an outline of how the transmission line would be dismantled and removed and how the alignment would be rehabilitated if a decision is made to decommission it.

PART D—Environmental Impacts

The potential impacts during the construction and operation/maintenance stages of the proposed development shall be covered in the assessment. When some impacts are not quantifiable, they should be fully described. Where applicable safeguards and mitigation measures to ameliorate the impacts should be proposed with an objective assessment of their efficacy. Proposals for monitoring of impacts should also be included where appropriate.

6. Bio-Physical

(a) Greenhouse Gases- quantification of greenhouse gases emissions by source and location during the construction and lifetime of the project.

(b) Natural and Conservation Areas—impacts on any natural or conservation areas which may have wildlife, habitat or aesthetic conservation value.

(c) Flora and Fauna—any likely impacts on the flora and fauna including migratory species. Description of the natural environment including a survey of flora and fauna, identifying any rare, threatened or endangered species, or species and habitats of local, regional, state or national signifi cance. Ability of identified stands of vegetation and fauna to withstand any increased pressure resulting from the proposal. Measures proposed to mitigate impacts, including wildlife corridors and compensatory habitat areas and their adequacy and effectiveness. Measures for ongoing management of the natural environment and prevention of the introduction of pests and weeds.

(d) Vegetation Clearance—clearance requirements and amount of native vegetation affected. Compliance with vegetation policies including NSW State Environmental Planning Policy No. 46, Protection and Management of Native Vegetation . Mitigation measures such as compensatory vegetation and trees planting.

(e) Noise—the existing background noise levels in districts traversed by the transmission line; any increase in background and incidental noise levels at noise-sensitive receptor premises, including consideration of wind noise associated with the wires and tower and expected wind strengths and duration, likely noise from fluctuations/phases in electric and magnetic field and operation of transformers.

Identification of mechanisms for inducing excessive noise and proposed mitigation measures.

(g) Other Impacts—any likely impacts on soil erosion, siltation, bush fire risk, major earth slippage/movement, air quality, groundwater and surface water quality and flow, soil and water contamination risk, acid sulphate and saline soils risk, flooding potential and hydrology. Mitigation measures and their effectiveness.

7. Socio-Economic

(a) Land Acquisition and Compensation—likely impacts on the land use status and ownership of the land crossed by the proposed line, and assessment of the need for and cost of any land easement, acquisition and compensation for loss of land and production and increase operational costs caused by severance of property.

(b) Land Use—potential site specific and cumulative impacts of the proposal on existing and potential land uses and developments including tourism and airfield developments; in particular on the management, operation, productivity of developments, likely sterilisation of mineral and significant extractive industry resources and loss of good quality agricultural land.

(c) Cumulative Impacts of Linear Developments on Land Use—taking into consideration severance impacts of other linear developments including transmission lines, service corridors, roads and railways.

(d) Features of Community Concerns—impacts on any features or areas of local, regional or community concern such as those of recreation, amenity, cultural, heritage or conservation value.

(c) General Social Impacts—on affected property owners and communities, including Aboriginal communities, property values and local authority rates.

(f) Visual Impacts—local and regional visual impacts of the major transmission structures and easement clearance, with artist's impressions, computer generated imagery and/or photo montages to portray the near views and far views of the completed structures and their surroundings at visually sensitive locations.

(g) Health Risk—assessment of the potential risk of electric and magnetic field from the proposed line on adult and child health, including identification of the potential hazards, any dose-response relationship or threshold criteria, the exposure pathways and population at risk, and measures to manage and minimise the risk.

(h) Electric and Magnetic Field—potential impact of electric and magnetic field on flora and fauna, agriculture, TV reception, radio, and on quality of mobile communications, computers and data storage by magnetic disc and navigational instruments. Mitigation measures to manage and minimise the impacts such as buffering and shielding.

(i) Flight Paths—impact on local aircraft flight paths including agricultural flights such as crop-dusting and emergency flights.

(j) Traffic and Amenity—potential impacts on traffic and community amenity especially during the construction phase of the proposal.

8. Cultural and Heritage

(a) Cultural Heritage—anthropological study and cultural heritage assessment using a consultative approach and have regard for Native Title issues to establish the cultural heritage significance of the affected areas. Appropriate aboriginal councils and groups should be consulted. Assessment of potential impacts with consideration of issues including lifestyle, heritage places and increased visitation and damage.

(b) Cultural—other potential cultural impacts on the communities affected by the proposal, including Aboriginal community.

(c) Heritage—general heritage values of the affected area and the likely impacts the proposal may have on items or sites of heritage significance.

9. Environmental Cost-Benefit Summary

Summary of both the short and long term environmental costs and benefits to be borne by the community and the environments such as reduced productivity on land crossed by the line, potential increase in health care costs caused by electric and magnetic field, loss of good quality agricultural land or area of high conservation values, and reduction in greenhouse gases emission. Where some cost/benefits are not quantifiable, they should be described.

PART E—Environmental Management Plan

10. Environmental Management Plan

A draft Environmental Management Plan (EMP) for both the construction, operation/maintenance stages of the project should be included. The plan should contain all relevant details available at the time when the EIS is prepared. When information is not available, they should be described with indication of how and when the information will be incorporated into the final detailed EMP.

The plan should address, but not limiting to, the following matters:

-   the management objectives;

-   specific strategies to meet the management objectives, such as the preparation and implementation of various pollution control plans in consultation with agencies;

-   the quality assurance, monitoring and auditing requirements and programs including the identification of performance indicators and criteria, monitoring and auditing locations and frequency;

-   identification of responsible personnel in the hierarchy;

-   reporting processes, and

-   contingency plan to account for natural disasters such as cyclones, storms and fires etc.

PART F—Consultation

The concerns of the relevant local, State and Commonwealth agencies, service/utility providers and community groups shall be identified and addressed in the EIS. Consultation should include:

11. NSW Consultation

-   Relevant local councils

-   National Park and Wildlife Service

-   Environment Protection Authority

-   Department of Land and Water Conservation

-   NSW Agriculture

-   Department of Mineral Resources

-   Mines Subsidence Board

-   Department of School Education

-   NSW Public Works and Services

-   NSW Bushfire Brigade

-   Civil Aviation Authority

-   NSW Heritage Council

-   Roads and Traffic Authority

-   State Rail Authority

-   North-West Electricity

-   North West Catchment Management Committee

12. Queensland Consultation

-   Relevant local governments

-   Queensland Department of Family and Community Services

-   Queensland Department of Lands

-   Queensland Department of Transport

-   Queensland Department of Primary Industries

-   Queensland Department of Environment and Heritage

-   Condamine Catchment Co-ordinating Committee

-   Wildlife Preservation Society

-   Goolburri Land Council

-   Federation of Aboriginal and Islander Research Action (FAIRA)

-   Relevant Electricity Generating and Transmission Authorities (QETC, Powerlink)

13. Commonwealth Consultation

-   The Environment Protection Agency

-   Australian Heritage Commission

-   Australian Nature Conservation Agency

-   Air Services Australia

It should be noted that the onus is on the proponent to identify all parties with an interest in the proposal.

Attachment No. 3

Information and Advice Related to the Preparation of the Environmental Impact Statement for Eastlink

1. It is the responsibility of the person preparing the EIS to identify and address, as fully as possible, the matters relevant to the specific development proposal in complying with the statutory requirements for EIS preparation. There may be issues other than those specified in the Director General's Requirements at Attachment No. 2 which should be considered in the EIS.

2. It is the responsibility of the person preparing the EIS to determine those parties which should be consulted during the EIS preparation stage in addition to those specified by in the Director General's Requirements at Attachment No. 2. It is recommended that an open community consultation process be carried out.

3. Completion of the EIS in satisfaction of the Terms of Reference does not mean approval.

General Advice

1. The EIS should be a stand alone document. It should contain sufficient information from the corridor selection studies and other supplementary studies to avoid the need to search out previous or supplementary reports.

2. Information provided in the EIS should be clear, succinct and objective and, where appropriate, be supported by maps, plans, diagrams or other descriptive detail. The purpose of the documents is to enable members of the public, the determining authorities and the assessing agencies to properly understand the environmental consequences of the proposed development.

3. The EIS should refer by suitable appendices to all relevant studies/investigations that may have been carried out in support of the proposal. This supporting documentation should be made available during the period of public display of the EIS.

4. The corridor selection report or other studies, reports or literature not normally available to the public from which information has been extracted should also be made available during period of public display of the EIS.

5. An executive summary should be provided in the EIS and be available separately for public information.

6. The EIS should state the criteria it has adopted in assessing the proposal and its impacts, such as compliance with the relevant legislation, policies, standards, the principles of Ecologically Sustainable Development, community acceptance, maximisation of environmental benefits and minimisation of risks.

7. All uncertainties in the assessment and assumptions made should be clearly stated and a worst case scenario should be considered in the assessment with its related risk indicated.

8. A checklist should be provided to indicate compliance of the EIS with the Terms of Reference.

9. The level of analysis and details in the EIS should reflect the level of significance of the impacts.

10. The emphasis is on quality and not quantity.

11. The EIS should indicate a commitment to carry out further impact assessment if there is a decision to expand or include new components to the current Eastlink proposal.


Senator SHORT —I move:

That the Senate take note of the document.