21 March 2016

In Committee, Labor Amendments

The Hon. ADAM SEARLE (Leader of the Opposition) [2.53 p.m.]: Your understanding of the relationship between the two sets of amendments is correct. I move Opposition amendment No. 1 on sheet C2016-019D:

No. 1  Customers with non-market generators not to be billed based on interval metering data

Page 3, schedule 1. Insert before line 2:

[1]      Section 15B

Insert after section 15A:

15B    Customers with non-market generators to have net billing

Despite anything to the contrary in the National Energy Retail Law (NSW), a customer who is a non-market generator (within the meaning of the National Electricity Rules) is, whether or not the customer has a type 4 metering installation (referred to in Chapter 7 of the National Electricity Rules), to be billed for electricity usage on the basis of the difference between electricity consumed and electricity generated by the customer during the relevant billing period.

This amendment addresses the concern raised by the Opposition during the second reading debate on this bill about what happens to customers generating rooftop solar post the closure of the Solar Bonus Scheme. A view is being promulgated in the industry that those who do not have smart meters installed will somehow not be able to access the best return for the rooftop solar they are generating and passing back into the grid. This amendment is to make the point that the retail industry currently possesses all of the information needed to continue to provide people who generate rooftop solar or electricity from other sources with a return for their investment.

Smart meters, although conferring great benefits on retailers and the network as a whole, are greatly desired by the Australian energy market operator. In my contribution to the second reading debate on this bill, I indicated that these meters also potentially confer benefits on customers, but customers should not feel coerced or obliged to take the step of installing smart meters as it is not strictly necessary. The retailers already have the information they need to work out whether to pay persons with rooftop solar anything post the closure of the Solar Bonus Scheme—that is, whether people are a net contributor to or net drawer on the electricity network.

As I indicated, my energy company knows how much electricity I generate because it pays me for it, so it already has that information. The electricity company, through the meter, can already work out how much electricity my household consumes and therefore it knows whether I am a net contributor to or drawer on the electricity network. That means that post the closure of the Solar Bonus Scheme my retailer will know whether to pay me or charge me for energy. We are concerned that a view has been promulgated that people need to have smart meters to continue to receive any return. We note that retailers are not strictly speaking legally obliged to provide a reasonable tariff for those who select to return excess energy back to the grid. Currently electricity companies are not obliged to pay anything for the energy generated by householders, which electricity retailers can then on sell to other consumers, although there is an Independent Pricing and Regulatory Tribunal [IPART] recommendation on this matter.

We note that retailers have voluntarily indicated that they will pay something. We think there should be a stronger IPART mandate to set a minimum price for rooftop solar energy so that people can get a fair minimum payment for solar energy fed back into the grid by those households generating excess energy, a policy we took to last year’s election. That policy will have to wait for the next Labor government or until this Government decides that this is a fair and reasonable course of action. We press this amendment. To the extent that retailers will still pay for excess solar energy fed back into the grid, this amendment will not provide any impost on retailers. However, to the extent that some retailers do not intend to take this path, we think there is a need for some legislative guidance to be laid down so that customers who generate rooftop solar continue to get some return for their investment.

I note that what is now called the Australian Energy Council, formerly the Energy Retailers Association of Australia, has made a submission to the Government about this legislation. The council approves the legislation in its current form in principle. I have had some discussions in interaction with that body and I note that it is not in favour of this amendment. It is no surprise that the retailers feel that the current market and regulatory settings are adequate. We beg to differ. We accept that most responsible retailers will take a responsible course of action and continue to pay a return to households generating excess rooftop solar. But we think legislative guidance is required because people should not be coerced into having expensive new smart meters installed unnecessarily. Many of the current meters do not need to be replaced for any other reason.

I have received feedback from some people who already have so-called smart meters and are being told by their retailer that the meters need to be upgraded yet again if they are to get the best return for their rooftop solar generation post the closure of the Solar Bonus Scheme. Retailers have all the information to do this properly and we think it appropriate that this Parliament give the guidance in the form of this amendment to provide consumer protection for the 160,000 households that participated in the bonus scheme and for households which before and since the scheme have contributed to our shared clean energy future by installing rooftop solar.

The Hon. ADAM SEARLE (Leader of the Opposition) [3.14 p.m.], by leave: I move Opposition amendments Nos 2 and 3 on sheet C2016-019D in globo:

No. 2  Contestable network services

Page 3, schedule 1 [4], proposed section 31A (2), lines 17–20. Omit all words on those lines.

No. 3  Contestable network services

Page 3, schedule 1 [4], proposed section 31A (5). Insert after line 31:

(b)      the installation, maintenance or replacement of an electricity meter, and

These amendments are directed to page 3 of the bill and to the new section 31A dealing with accredited service providers. In the Minister’s second reading speech the Government indicated that at the moment accredited service providers [ASP] level 2 and above are required to have that accreditation to do the installation work on meters. The Government indicated that it wishes to create a wider market for the provision of these services by providing that qualified electricians other than ASP level 2 and above could perform this work. The Government said that those performing the work would still have to be accredited to Australian/New Zealand standards. I note the in-reply speech indicated that the Government did not propose any sort of lesser standards.

At the moment, as we understand the National Electricity Rules and the current requirements and so on, that level of accreditation by those installing the meters is necessary both to be sure about the skill of those performing the work and also to guarantee worker safety and the safety of the public and households. I note that on 19 February 2016 the National Electrical and Communications Association [NECA] made a submission on the rollout of smart meters in New South Wales. It indicated on page 9 of the submission that metering work has the potential for serious, specific dangers, including electrocution and arc blasts, which have the potential to cause serious injury not only to the workers but also to householders and members of the public, for example, through house fires.

That proposition is elaborated on in some significant detail to lead to the conclusion that in the view of that industry association the current situation should prevail—that is, in order to install these meters the requirement that that work be restricted to ASP level 2 and above should be maintained. Government members in their speeches on the bill suggested that there should be a different standard but they have not indicated what that standard will be or how it addresses the concerns outlined by NECA, the Electrical Trades Union and others. Those concerns are about how you ensure worker safety and the safety of householders and the general public if you allow other qualified electricians without that accreditation to do the work. That is a significant concern that is given rise to by new section 31A of the Electricity Supply Act.

We do not want any tragic events to unfold in the days, weeks and months to come simply because of the Government’s desire to have the potential for smart meters to be rolled out in New South Wales. As desirable as that may be for some, the group of amendments that the Opposition has proposed—including the one that was just unsuccessful—would secure a situation in which there is no need for a rushed mass rollout. It could be done in a more orderly and staged fashion. Notwithstanding the lack of success of the Opposition’s amendment No. 1, Labor still thinks these two amendments are necessary. The second amendment removes new section 31A (2), which provides that:

The regulations may exempt the provision of specified, or a specified class of, contestable network services from the requirement that the services must be provided by an accredited service provider.

This is the mechanism that the Government will use to achieve its approach. Again, the Opposition wants to know in advance, before it signs off on this change, what those exemptions will be and exactly who will be permitted to do this work if it is not to be restricted to ASP level 2 and above, as it is at present. We ask the Government to be frank with us, Parliament and the community, about what its plans are. Sometimes facilitative legislation is passed, and therefore regulations and other documents are provided in the future to flesh it out. I understand this is one of those provisions, but the potential hazard to those performing the work, to households and to the general public is such that it needs to be resolved with clarity at the legislative stage rather than down the track. We are concerned about this issue. We ask that the Government be clear about what it is proposing and that it ensures safety for all concerned. We urge Opposition amendments Nos 2 and 3 on the House and ask honourable members to join with us in support of them.

The Hon. ADAM SEARLE (Leader of the Opposition) [3.30 p.m.]: The Government wants to have it both ways. On the one hand it is saying, “Do not worry; there will be no change. Only accredited service providers will be able to do live work, so there will be no substantive change in this area”, which is why the Opposition moved these amendments. On the other hand, and despite this, the Government is saying that the Opposition’s amendments will create problems. The Government cannot have it both ways. Either it changes the current situation where only level 2 or above accredited service providers can do this work, or it does not. If the Government is not changing that situation it should embrace the Opposition’s amendments and put it beyond doubt and allay any concerns that may exist in the industry or in the community.

The fact that the Government is not willing to embrace our amendments suggests, despite what was said by the Parliamentary Secretary, that the Government’s plan is to have different and lower standards for those who are performing this work. With the exception of level 2 accredited service providers, electricians in New South Wales have never installed electricity meters. To ask electricians to undertake this kind of work without proper training and accreditation could risk serious injury or death.

I mentioned two potential risks—arc light incidents and transposition. An arc light develops during and following an electrical fault and results in the ignition of oxygen surrounding an installation or a plasma cloud. It is characterised by temperatures in excess of 15,000 degrees Celsius and a cocktail of superheated toxic gases and airborne molten metal from melted conductors and steel released by the components within an electricity assembly fault. It can result in a rapid energy release with a pressure wave of significant magnitude developing. If a person is standing in front of an installation during an incident a plasma cloud will envelope that person. Obviously, a serious arc flash incident has the ability to cause loss of life and property damage.

Transpositioning is an electrocution shock hazard and occurs when there is interposed wiring or the active and neutral wires are switched. A practical outcome of this mishap could be that metallic gas and water pipes—reinforcing in concrete showerheads and the water that comes out of showerheads—and every metallic appliance in a house would become live as a result of transpositioning. Electric shock or electrocution could occur if a person comes into contact with any of the items to which I have referred. It would be stating the obvious to say that that could also result in a serious injury or loss of life. Our two reasonable and practical amendments will ensure that there is no dilution of the current safety regime or of the level of skill and accreditation required by those who perform this work.

The Government says, “Do not worry; that will not change,” but Government members seem to be fencing with words because they are saying there will be no change to those who can perform live work. They seem to be drawing a distinction between live work and the rest of the work involved in the installation of meters. The idea of being able to parcel out the work in that way is misleading. If the Government does not intend to change the way in which this work is performed and the resultant maintenance of standards in this area it should embrace the Opposition’s amendments. If the Government does not embrace the Opposition’s amendments it means that it intends, through the regulation power under section 31A, to have a different and lesser regime of accredited professionals performing this work. That gives rise to the significant safety concerns that we raised—safety concerns for householders and the wider public, and safety concerns for the individuals who are performing this work.

Obviously, a significant number of people—up to 160,000 with respect to the solar bonus scheme alone—may wish to change to advanced meters which will create a potential demand for work. It may be that a number of qualified electricians will want to participate in that market, which is not unreasonable, but if they do not have the proper level of training and skills it would create a recipe for disaster and tragedy, unless appropriate safeguards are put in place. The Opposition is proposing, constructively, to implement those safeguards. We urge the Government—if not the Government other members in this Chamber—to join us in putting public safety first.

The Hon. ADAM SEARLE (Leader of the Opposition) [3.44 p.m.]: I move Opposition amendment No. 4 on sheet C2016-019D:

No. 4  Sealing of electrical installations

Page 3, schedule 1 [5], lines 34 and 35. Omit all words on those lines.

Section 32 of the Electricity Supply Act provides for the sealing of electrical installations, which is both a safety measure and a measure to protect public revenue and retailers’ revenue. This bill proposes to delete that requirement. Opposition amendment No. 4 will maintain the status quo for the protection of public safety. I ask members to join us in supporting that amendment.