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Alex is committed to government transparency and accountability; protecting the natural and urban environments, open space and Sydney’s unique heritage; retaining inner city social and affordable housing; the humane treatment of animals; improving transport options; and fairness and equality for the LGBTI communities.
 

Electricity Privatisation

(Debate, 28 May 2015, Legislative Assembly, NSW Parliament)

I oppose the Electricity Network Assets (Authorised Transactions) Bill 2015 and the cognate Electricity Retained Interest Corporations Bill 2015, which will facilitate the transfer of 49 per cent of State electricity network assets through a 99-year lease. The Government justifies ramming these bills through the House, without letting them lay on the table for five days as is required by the standing orders, because the bills reflect an election commitment. This shows contempt for parliamentary process, members' roles as representatives and the many people who are concerned about the sale of government assets. These bills are not urgent: We are sitting next week, there are few other bills tabled, and members should be given adequate time to consider and consult.

The election invoked extensive debate over whether the State's power transmission and distribution businesses should be publicly or privately owned. Disappointingly, from both the Opposition and Government, the debate failed to acknowledge the risks a transfer could have on our ability to address climate change. Climate change is the biggest challenge of our time and the energy sector is a major producer of greenhouse gases; almost 80 per cent of Sydney's emissions come from electricity supplied to homes and businesses. Any restructure of the electricity industry should be about shifting to a low-carbon economy that secures the future of our State and planet. We must establish a long-term plan for a reliable, clean and sustainable energy industry with changes in who controls the industry to occur within this framework. It is essential for our economy and for our future. 

But I am concerned that short-term financial gains are driving the sales agenda, at the expense of the long-term cost of entrenching our dependence on a centralised energy system based on dirty coal-fired power. New South Wales can only transition to a low-carbon economy if we increase competition in the electricity industry from greener and local sources, reduce demand for power through efficiency measures and require power companies to pay for emissions. But because these actions could also reduce the value of our power assets, there is risk that they will be forgone to secure a higher price. 

Last year my questions on notice to the Premier asked that the sale of electricity poles and wires rule out protections, exemptions or compensation from the impacts of any carbon reduction program, such as an emissions trading scheme, renewable energy target or price on carbon. I got no assurances. I asked that sales conditions impose a mandatory timeframe for a ban on constructing new coal-fired power stations. I got no assurances. In June last year I wrote to the Premier and asked for a briefing so that I could make an informed decision about the sale, raising concerns that it could preclude expansion of low-carbon energy. My letter was never responded to. I acknowledge that I received a briefing yesterday from the Treasurer's office and Treasury staff, and appreciate the time they took to explain the bills before the House. 

To give my concerns some context, this Government already withdrew a successful feed-in tariff scheme that led to a quick uptake of solar power, refused to mandate the Independent Pricing and Regulatory Tribunal's recommended rate for energy retailers to reimburse households with solar panels for renewable energy returned to the grid and changed planning laws to make it harder to get approval for a wind farm than for a coal mine. The legislation is only one part of the sales process; contract details will be a vital part of how the public will benefit from this sales program. 

Sheltering or compensating the energy industry from the costs of emission reduction schemes is not good for New South Wales, but previous infrastructure contracts have not always been in the long-term public interest. I ask that in reply the Treasurer address this concern and commit to excluding any form of sheltering or compensation to private lessees from present or future emission reduction schemes. I am concerned that because we do not have adequate policies and laws to secure the necessary energy-related greenhouse gas emission target cuts, transferring control of this polluting industry to the private market is a significant risk. 

Transmission of energy from distant power stations through poles and wires remains extremely inefficient—66 per cent of this already emissions-intense energy is lost through heat. Federal and State governments have failed to introduce energy market reforms that would enable people to export energy to neighbouring buildings thereby preventing the uptake of more efficient local generation such as co- and tri-generation. Professor Garnaut has argued that reform is needed in this area to help decentralise energy production in order to reduce our greenhouse gas emissions, and that privatisation of poles and wires should not occur before this reform occurs because uncertainty about pricing reform would reduce the sale price of assets. 

I am also concerned about price hikes, which have occurred in other private markets. The Public Interest Advocacy Centre and the New South Wales Council of Social Services have expressed concerns about impacts on low-income and vulnerable people, and people in my community are also worried. While the bills require bidders to show how they will reduce prices, we have had years of increases to fund transmission and distribution network upgrades to supply demand on a few hot days because this was more profitable than energy efficiency, demand management and decentralised energy. Our energy market rules create incentives to over-invest because networks earn returns based on the size of the network and the amount of power that flows through the poles and wires.

These problems remain. The Government believes that selling the poles and wires on a 99-year lease is the best way to raise funds for infrastructure without diverting funds from other services and projects. I agree that New South Wales needs to expand infrastructure urgently, and I strongly support many of the plans earmarked as part of this sale, including a second harbour rail crossing, expansion of rail services—including at Barangaroo—and an inner-city high school. However, I do not support fast-tracking and extending the WestConnex motorway. I oppose this project because it is a short-term solution to traffic problems that will create significant congestion in the long term while causing serious environmental impacts. There is a long history of road projects receiving funding instead of other more sustainable and essential public transport projects. The sale of electricity networks should not be used for this short-term and damaging project. 

If we do not green our power supply, New South Wales will become an energy dinosaur and we will risk losing business. Business does not want to rely on large fossil fuel driven power stations based in regional areas, while other global cities are advancing greener energy supplies. Business wants a competitive edge, which involves being part of the green revolution. We need stronger energy-efficiency measures, demand management, strong renewable energy generation targets, incentives for renewables, planning laws that favour green energy, a greenhouse gas reduction target, support for sustainable building construction and retrofits, a price on emissions, more local generation, and a moratorium on new and expanded coal power. These measures should be implemented before industry ownership is changed. I share the widespread community concern that this sell-off could entrench New South Wales into long-term reliance on a centralised coal-fired power network. I cannot support that. 

 

 


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