Question Time - Electricity costs

Wednesday March 04, 2020

Question asked in Parliament

Mr BELL (Mount Gambier) (14:33): My question is to the Minister for Energy. Is the minister aware that AEMO is passing a $93 million additional cost on to South Australian power users due to the failure of the interconnector between Victoria and South Australia, and what would the minister say to two businesses in Mount Gambier that are facing a combined increase in power costs of $1.4 million next year?

Ms Cook: They would say prices are coming down.

The SPEAKER: The member for Hurtle Vale is called to order.

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:34): The member for Mount Gambier asked a very important question. Am I aware? Yes. Am I aware exactly the way he stated it? No, because my understanding is that not the entire amount will be passed on, but I am certainly well aware of this. What would I say to two businesses in his electorate who are facing this cost? I would say to them that we need an interconnector between South Australia and New South Wales. We need the interconnector, which those opposite promised to deliver. We need the interconnector, which we are doing everything possible to deliver because if we had had that interconnector in place we would not have had these problems.

For the benefit of the member for Mount Gambier, in that genuine question he asked, there was weather damage in Victoria on 31 January which knocked out some transmission lines in Victoria and which meant that, not entirely but broadly speaking, we were cut off from Victoria, as was the Mortlake power station in Victoria and the aluminium smelter in Portland.

We, in partnership with industry and the regulatory bodies, found a way to support them, so South Australia looked after its own needs plus supported the Portland aluminium smelter, thus saving 3,000 jobs. Victorians have said to me that if we had not done that they would have lost 3,000 jobs and the smelter would have solidified and would not have been repaired and reopened. We do the very best we can to make sure we protect South Australians first and then help our neighbours—a very important principle.

Of course, during that time, while we were what is called 'islanded', AEMO had to require some generators to operate when they would not actually have chosen to do so for commercial reasons. The cost of that forced operation is estimated to be $93 million—$93 million that could have been avoided if we had that interconnector in place already, as those opposite said they would do years and years ago and as those opposite said they believed was an important thing to do until only about three years ago, when we said it was important. When we said it was important, they said it wasn't important.

The important question that you raise, member for Mount Gambier, is: could we have avoided those costs? Yes. Did we avoid them? No. But guess what we did do? We managed to operate, essentially as a cut-off, islanded state for two weeks without any blackouts. We all know that as electricity prices rose and rose over the last few years of the previous Labor government, so did the number of blackouts.

We also know that last summer was the first one for years that we did not have any load shedding in South Australia. We know that so far this summer we have not had any forced load shedding in South Australia. Do I rest on that? No, of course not. Every day, I worry about the prospect of how best to deal with the mess that we have been left with regard to energy. It could happen tomorrow; it could happen the next day. I never, ever take this for granted.

Let me tell you that so far, in the last two years since the member for Dunstan became Premier and since we came into government, we have gone through two summers without any forced load shedding. That is a record.

Members interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: That is a record I will compare to my predecessor's any time—

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The member for West Torrens is warned.

The Hon. D.C. VAN HOLST PELLEKAAN: —and simultaneously the cost of electricity is going down.

Members interjecting:

The SPEAKER: The member for Lee was on two warnings and interjected. He has the call.

The Hon. S.C. Mullighan: The member for Florey was on her feet, sir.

The SPEAKER: You are not seeking the call? The member for Florey.