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Legislative Council

30 May 2013
Second Reading


                                 Second reading
Ordered that  second-reading  speech be incorporated  into Hansard on  motion of
Hon. G. K. RICH-PHILLIPS (Assistant Treasurer).

  Hon. G. K. RICH-PHILLIPS (Assistant Treasurer) -- I move:
  That the bill be now read a second time.
Incorporated speech as follows:
  The Energy Legislation Amendment (Feed-in Tariffs and Other Matters) Bill 2013
  will amend various acts within the energy and resources portfolio.

  Part  2  of  the  bill  amends the Electricity Industry Act 2000 to  implement
  aspects  of  the  government's  response  to  the  Victorian  Competition  and
  Efficiency  Commission's  report  Power  from  the   People  --  Inquiry  into
  Distributed Generation. The government response will improve the efficiency of
  feed-in tariff arrangements and assist in minimising  barriers  to distributed
  The Victorian Competition and Efficiency Commission's recommendations included
  establishing a  new efficient and fair  feed-in tariff that would be available
  to  all small-scale, low-emissions or renewable  energy distributed generation
  facilities. The inquiry found that continuing to  provide above market premium
  feed-in  tariffs for these  facilities could lead to  unnecessary increases in
  electricity prices for all Victorian consumers.

  The  bill  implements  the  government  response  to  this  recommendation  by
  providing for a new efficient and fair feed-in tariff rate. This efficient and
  fair  rate will be set by the Essential  Services  Commission,  based  on  the
  wholesale price of electricity and  the  distribution  and  transmission costs
  avoided through the supply of electricity from distributed generators.
  The bill also allows for a wider range  of small  generation facilities  to be
  eligible for the  feed-in tariff scheme  by removing existing  restrictions on
  facility  eligibility. This will  allow new technologies  to  be assessed  for
  inclusion in the scheme on a case-by-case basis.
  An  electricity customer with  a  small solar energy  facility who receives  a
  premium feed-in tariff and who chooses to increase the  generating capacity of
  that  facility  after  31  December 2012 will no longer be eligible  for  that
  premium rate.

  While these customers may still  be  eligible  for  the new efficient and fair
  rate, if they were to continue to receive a  premium rate, the costs for these
  schemes,  ultimately  borne  by  all Victorian  electricity  customers,  could
  significantly increase.
  The bill strengthens oversight of the feed-in tariff  schemes by ensuring that
  feed-in  tariff scheme terms and  conditions may be referred  to the Essential
  Services Commission at any time for assessment of whether  they  are  fair and
  reasonable. This referral power is the main tool the government has to  ensure
  compliance with the  minimum requirement for  retailers  to provide  fair  and
  reasonable feed-in tariff  offers. The Electricity Industry Act 2000 currently
  requires referrals to be made within a  relatively  short  time  and  does not
  allow   later  referrals.  The  amendment  ensures  that  customers  are   not
  disadvantaged merely because  the terms and conditions  offered by a  retailer
  were not immediately referred for assessment.

  I turn now to the other provisions of the bill.
  Part 6  of  the  bill  amends the Victorian Energy Efficiency Target Act 2007.
  Energy retailers  participating in the scheme  will now include  retailers who
  meet an energy-use  threshold, as an alternative to the existing 5000-customer
  threshold.  This   amendment  addresses  an  existing  anticompetitive  market
  distortion where retailers with relatively few,  but very large, customers are
  currently outside the scheme.
  In order to align with the range of activities  permitted under  the New South
  Wales  scheme,  the  bill  will  also expand the scope  of  the  Energy  Saver
  Incentive scheme by enabling project-based and  public  lighting activities to
  be eligible for the scheme.
  The bill makes a number of other changes to improve energy safety in Victoria.

  Part 3 of  the bill  amends the  Electricity Safety  Act 1998  to clarify that
  electrical installation work  that will make  an electrical installation  or a
  building supplied with electricity unsafe is prohibited by the act.
  Part  4 of the bill amends  the Energy Safe Victoria Act 2005 to permit Energy
  Safe Victoria to provide  information to the Australian Energy Regulator. This
  will  facilitate  appropriate assessment of network safety compliance costs by
  the economic regulator when determining network prices.
  Finally,  part 5  of the  bill inserts  a new  offence provision  into the Gas
  Safety Act 1997 to prohibit a person from carrying out building work that will
  make a gas  installation,  or  a  building supplied with gas, unsafe. This new
  offence mirrors an existing offence in the Electricity Safety Act 1998.

  The  bill also confirms  that  the functions of  Energy  Safe Victoria include
  monitoring  and  enforcing  compliance  with  the  Gas  Safety  Act  1997  and
  I commend the bill to the house.
Debate adjourned for Mr SCHEFFER (Eastern Victoria) on motion of Mr Leane.
Debate adjourned until Thursday, 6 June.