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Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3187 ..

MR HUMPHRIES (continuing):

Mr Speaker, we have come, I would argue, to the crunch point. The Territory has been warned that, with changes in the electricity market imminent in the next few weeks, the situation with electricity in particular will become very fluid in Australia. The security in which ACTEW has operated over the last few decades is about to be seriously eroded, if not disappear altogether. In those circumstances, Mr Speaker, we have to face the need to reorient and replace the context in which ACTEW is operating.

All the information tells us that as of the end of this year there will be an element of risk entering into the marketplace of electricity sales - risk in the way in which sales are made and risk in the way in which competition impacts on those who purchase electricity and, to a lesser degree, other services from ACTEW. What do we do to protect ACTEW from that risk? We would all argue, I assume, that that risk needs to be avoided or at least minimised if we are to ensure that we protect the value of the asset. How do we minimise that risk, Mr Speaker? We can try to make ACTEW more competitive in its particular environment and work more aggressively to be able to capture those now floating clients who are moving away from the orbit of ACTEW, those people who are no longer tied to ACTEW as committed customers. Yes, we can try to do that.

Mr Speaker, even if we assume an extremely high degree of competitiveness on the part of ACTEW, the position is almost certainly going to be the loss of custom to ACTEW because their client base now is virtually 100 per cent of the Territory's residents and businesses. It is almost inconceivable that in the new environment of competition that will soon be upon us they will be able to retain 100 per cent of those customers, almost inconceivable. The potential to lose a large proportion of those customers is very real.

Mr Speaker, it is not a question just of ACTEW being more competitive in that environment. It is not a question of saying, "Look, ACTEW can somehow magically produce this wonderful set of policies that will aggressively go out into the marketplace and capture lots of business into ACTEW's hands and they will be safe and they will be fine". The fact is that ACTEW is the smallest and will be the smallest player in the whole of the new competitive national electricity market, the very smallest player. What are the chances that ACTEW is going to be able to capture those markets, those fluid markets, which are soon to be upon us from that small - indeed, relatively tiny - base? What is more, what are its chances of doing so, constrained as it is by government ownership and the restrictions that go with being responsible to government and having to face government-type restrictions on the way in which it operates? What are their chances of achieving that in that environment?

Mr Speaker, the best we can say is that we do not know. If we do not know, is it responsible of us to take that risk? Is it responsible of us as the custodians of this asset to expose it to that risk which is bearing down upon us and which will become much more real with the changes in the electricity market beginning in just a few days' time? The first of those changes is due to hit in a few days' time. Is that responsible, Mr Speaker? No, it is not. Is there an alternative, Mr Speaker? We do not know what the alternative is. We have explored the alternatives and we cannot see that there is any viable alternative.

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