Page 1119 - Week 03 - Thursday, 26 February 2009
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It is proposed that the scheme will commence on 1 March and that this will be considered as the first stage. It will meet the needs of ACT householders and small commercial operators with generating facilities of no more than 30 kilowatts. In June this year I will announce the extent to which larger generating facilities may in future be able to participate in the scheme. In adopting this staged approach, the government has been mindful of the potential of the scheme to impact adversely on low-income and other vulnerable households.
Utility use and other costs embedded in energy-hungry products and services represent an increasing burden on low-income households. It is the government’s view that the passing through of utility costs should be fully examined before they are imposed. I am confident that stage 1 represents a justifiable and reasonable impost on the community.
The government does not, however, consider it prudent or responsible at this time to set in place generous long-term benefits for larger-scale generators when sufficient signals within the national electricity market may already exist or are about to be announced. The government wishes to avoid any premature decision that would increase the opportunities for extraordinary profits by larger businesses at the expense of ordinary ACT householders.
I would like to stress that this is why the government will not be supporting the first series of amendments that will be proposed, I understand, by Mr Rattenbury. Those amendments basically say that if nothing else occurs the cap will be removed at 1 July and the premium rate will be available for any scale of generation. The government’s view is that that is premature, reckless and dangerous.
We, as a community, and the government, as the responsible entity, need to take the time to work through very clearly the potential impact of providing for a premium rate or a percentage of the premium rate for larger scale generators. We need to understand in detail what it would mean for lower income households and their electricity bills. We also need to understand what steps can be taken to ameliorate those impacts if there is, indeed, still a broader public interest in allowing the premium rate or a percentage of it to be available to larger scale generation.
Let us not fool ourselves about the potential risks that are at play here and why we need to take the time to get it right. Taking as a worst-case scenario, if we were to see a solar facility in place in the ACT which was capable of generating power to supply all of the needs of the territory—certainly, there is at least one facility that is mooted that may be interested in doing that—we are talking about an increase in electricity costs per household of $1,000 a year. That is, I concede, a worst-case scenario, but it is a scenario that we should bear in our minds.
Even a solar plant of the size proposed by the government—22 megawatts of generating capacity—would potentially see an increase in electricity bills per annum in the order of around $150 per annum. Those are the issues that warrant further and more serious consideration before a decision is taken on expanding eligibility. It is for those reasons that the government has said stage 2 needs to be done in a considered
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