28 November 2023
The Hon. R.A. SIMMS (15:29): I seek leave to make a brief explanation before addressing a question without notice to the Minister for Regional Development on the topic of power outages.
Leave granted.
The Hon. R.A. SIMMS: At the height of the storm that hit South Australia last night, 14,000 people were left without power and over 5,000 South Australians were still without power at 10am this morning, mostly in regional areas. Some of the worst hit regions were the Barossa, the Lower Murraylands, the Mid North and the Flinders. Last year, the secretary of SA Unions, Dale Beasley, wrote an open letter to the Premier, the Hon. Peter Malinauskas, calling for a reversal of the privatisation of our energy network. In the letter he stated that, 'This model has seen under investment in maintenance and replacement of electricity distribution infrastructure.'
I asked the Minister for Regional Development about this matter back in September, and in the response to my question without notice that she has tabled today she stated:
The government believes that privatising the network by the then Liberal administration was a foolish decision which has resulted in sub-optimal outcomes for consumers. However, restoring the electricity network to public ownership would be a complex and expensive undertaking.
She goes on to state:
Any consideration of such a change would require thorough analysis rather than superficial thinking.
My question to the minister therefore is:
1. In light of her remarks, would she consider the Greens' push for a commission of inquiry into bringing electricity back into public hands?
2. What action has the minister taken to ensure that people in the regions have access to power during this storm?
The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (15:31): I thank the honourable member for his question. In terms of one part of that question, it is certainly the case that in the answer I provided to the honourable member, where I alluded to the advice received from the Minister for Energy in the other place, I stated there would indeed need to be a thorough analysis of any proposal to bring electricity back into government hands. We all remember of course how many problems have eventuated due to ill-conceived privatisation by a former Liberal government in this state. In terms of those sorts of steps, I am happy to refer that to the Minister for Energy in the other place.
In terms of the storm power outages, I am advised that, as the honourable member referred to, the storms did cause widespread power outages in addition to localised flooding. I am advised that approximately 155,000 lightning strikes were recorded, some 26,000 of those hitting the ground. Some of the lightning strikes hit electrical infrastructure, which caused damage. There was also damage from trees and vegetation falling on powerlines, and I am advised that this led to about 30,000 SA Power Networks customers being affected by an outage.
I am advised that SAPN mobilised additional crews and have been restoring power to most customers, and as of 10am today there remained approximately 5,000 out of those 14,000 customers who were still without power. SAPN prioritises work to protect public safety first, and then targets outages from the biggest through to single affected customers. I am further advised that the storm also affected some ElectraNet assets, but the transmission provider expected all lines to be in service by mid-morning, which is the most up-to-date information I have in that regard. Further, there was no loss of load from the transmission network.
The Hon. R.A. SIMMS (15:33): Supplementary: does the minister accept the analysis of SA Unions that privatisation has seen underinvestment in maintenance and replacement of electricity distribution infrastructure that has contributed to the power failure we have seen overnight?
The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (15:33): I think the privatisation of the state's electricity assets by a former Liberal government was a disaster.
In reply to the Hon. R.A. SIMMS (28 November 2023).
1. In light of her remarks, would she consider the Greens' push for a commission of inquiry into bringing electricity back into public hands?
2. What action has the minister taken to ensure that people in the regions have access to power during this storm?
The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries): Response by Hon. A. Koutsantonis:
The record shows that the minister provided a detailed answer to the second of the Hon. Robert Simms' questions at the time it was asked.
In answer to the first question, as previously advised, the Malinauskas Labor government believes that the privatisation of the electricity system by the then Liberal government in 1999 was a mistake which has not delivered optimal outcomes for consumers. However, also as previously advised, to reverse the privatisation would be complex and costly. It would raise issues of sovereign risk which could deter investors from funding projects in South Australia. Reversing privatisation would require compensation to be paid by taxpayers to the companies which now operate the electricity system.
The Australian Energy Regulator (AER) assesses the regulated asset bases of the network businesses in South Australia—distributor SA Power Networks (SAPN) and transmission provider ElectraNet. In the current determination period, the AER estimated SAPN's regulated asset base would be $4.9 billion as at June 2025. For ElectraNet, the AER determined the asset base at $3.9 billion on 1 July 2023, rising to $4.4 billion by June 2028. As well as their asset bases, the network providers might have a claim to other value elements of their businesses in the eventuality of a privatisation reversal.
In generation, any proposed compulsory acquisition would be even more complex. There are more than 40 major generation plants in the state and a significant number more of commercial scale while not being market participants in their own right. These vary in technology, scale, plant age and condition, ownership structure and other factors.
With South Australia already linked to Victoria for transmission and soon to be linked to New South Wales, there would be further complexity as some companies operate portfolio generation across multiple plants, influencing the value of an individual asset.
Generation assets would amount to billions of dollars of invested capital. These identified costs would be the minimum burden on taxpayers from a privatisation reversal.
At this point in time, the Malinauskas government does not agree that a commission of inquiry into returning the electricity system to public hands would be a prudent use of taxpayer funds and government resources. Therefore, we will not be supporting the Greens' proposal.
Rather the Malinauskas government is focused on delivering a state-owned enterprise to run the Hydrogen Jobs Plan assets and business.
We are also developing a comprehensive suite of policies on the energy transition to ensure initiatives act in concert across sectors. The Department for Energy and Mining published a green paper to stimulate discussion, held discussions with stakeholders and invited comment and submissions. That work is well advanced.
The government is focused on regulatory and structural reforms to deliver cleaner, affordable, and reliable energy to all South Australians, including the most financially vulnerable.