Tuesday, 14 May 2024

Bills

National Energy Retail Law (Victoria) Bill 2024

Second reading

Debate resumed on motion of Harriet Shing:

That the bill be now read a second time.

Richard WELCH (North-Eastern Metropolitan) (14:53): Thank you for inviting me to speak on the National Energy Retail Law (Victoria) Bill 2024, a bill which considers provisions of the National Energy Retail Law contained in the schedule to the National Energy Retail Law (South Australia) Act 2011 providing for retailer of last resort arrangements and other provisions et cetera. I think it is sensible that when you expect failure you should plan for it. What a pity the government have not applied this principle across the board in fact. And why is it necessary – well, in part it is a vote of no confidence in Labor’s own energy policy. It is a sign that Labor cannot manage money, cannot manage projects and in terms of energy are half expecting failure themselves. We have seen from the tragicomedy of the budget handed down last week more taxes, less services and more likelihood that their projects will blow out and state debt will blow out and, most particularly in relation to this bill, that their management of the energy system will continue to fail.

Let us just call this another little bandaid before the real bleeding starts. They cannot get offshore built because they did not plan it properly, and they cannot communicate properly with their federal partners. They cannot build offshore at the scale planned because they did not plan it properly and did not take into account widely available science. And they cannot build transmissions lines at the scale required for renewables, at least not without going full Stalin and overriding every notion of consultation, property owner rights and local amenity. One thing is certain: you know a government has run out of endurance, imagination and energy if it has to go full Stalin to get its projects delivered. To paraphrase Tropic Thunder, never go full Stalin.

You also are in complete disagreement with the federal Labor government about the essential role of gas. They are all for it; in fact they point out it is essential for the transition to renewables. Does this bill of last resort cover gas retailers? Does this bill provide a supplier of last resort when you have run the entire gas industry – appliance makers, producers, suppliers to the industry, the experts, the industries that need gas, all of them – into the ground and legislated them out of the state? In this case I guess the supplier of last resort will be businesses in South Australia and businesses in New South Wales. In fact they will be the employer of last resort for the businesses that these energy policies run out of the state. Other states are running out red carpets for business, but not us. We are here applying bandaids like the Dutch boy with his finger in the dike, King Canute ordering the tide not to come in or Stalin ordering the next five-year plan to be successful because it just will be.

Speaking of Stalin and government programs in the context of this bill, what is the SEC’s role in this? I am willing to be corrected, but I thought originally the SEC was meant to be a retailer itself. Yes? No? No-one knows. Anyway, we now know that it is a venture capital business designed for picking winners and losers in the energy sector and for undermining the commercial terms on which the energy sector operates by funding on subcommercial terms. By definition it does this, and any transactions based on subcommercial terms inevitably have subcommercial outcomes. As sure as night follows day, it will have an effect on the retailers as much as the suppliers and operators. So we have the SEC venture capital business on one hand undermining the commerciality of the sector and this bill on the other providing a bandaid for the failure of the retail market – well played indeed.

In fact we could say the single greatest virtue that there is in this bill is that the government itself is not the supplier of final resort, because based on the government’s record on housing waitlists, hospital waitlists and cuts to police and ambulance services, when the government is the provider of last resort, it does not do well. So I guess the virtue in this is that at least the government is not the supplier of last resort in the gas industry. But I am happy that I think we are going to support this bandaid. It is a necessary bandaid. Let us put it through. There I complete my contribution.

Michael GALEA (South-Eastern Metropolitan) (14:58): I am rising slightly earlier than I had anticipated. I was hoping for the full 30 minutes, Mr Welch, but it is a journey we are all on, and I am sure on your next one you will be much, much closer. I am not sure if I myself have got to 30 minutes yet, but I am on the way.

I do rise to speak today on the National Energy Retail Law (Victoria) Bill 2024, and I do so noting, as I did in the last sitting week in this place, that this bill is an important bill but it is an important bill that is part of a suite of bills that are coming into this place at the moment that are all part of the former Andrews and now Allan Labor government’s plans for a more sustainable, greener future for all Victorians. We are transforming our energy sector in this state and have done so. Obviously we have numerous other things to look forward to as well, such as the reintroduction of the SEC. There are projects happening right across the state. Last sitting week as we were speaking about electricity grids, we spoke about various projects in that space that will support some of our state-shaping projects, such as Star of the South and other projects that will really transform this state. For the last 10 years, from the start of this government, Victoria has been an absolute national leader. We have been setting the most ambitious targets. We have also been meeting and beating those targets. So as we look towards these next steps, we do so with the background of being a government that has put out its plans and delivered on those plans for the people of Victoria.

We know that not only has this government committed to a greener energy supply for Victorians, but it has also committed to cheaper power prices for Victorians. It is why I once again welcomed the news just recently of the draft Victorian default offer, with those new prices under the VDO – an average $112 decrease in power prices for individual households and a decrease of $266 on average for our small businesses. This is a government that is putting the investment in to deliver these results and deliver results that will lead to better and cheaper power for all Victorians, because that is what they frankly deserve and what we all, as a state and as a planet, so very much need.

The timing of the Victorian default offer announcement has been particularly beneficial for constituents in my region as well. From many in the South-Eastern Metropolitan Region, where I have been going out to people, whether it has been in Berwick or in Rowville or joining many of my wonderful colleagues in many Labor-held seats in the south-east region, I am hearing firsthand that cost-of-living pressures are such an important thing for all of us right now. It is why it is so good to see that Victorian default offer coming out, and it is also why I take the opportunity to remind and encourage all Victorians to make the most of the facilities and of the resources that we have out there, including the Victorian Energy Compare website. Last year of course we had the fourth round of the Andrews, now Allan, Labor government’s $250 power saving bonus program, and it was great to be out in the community helping people with less access to tech than others to get access to that benefit as well. We had well over a hundred people at just a single street stall at Wellington Village shopping centre in Rowville coming in keen to take up that offer, keen to get the best value. Even after the end of that program the Victorian Energy Compare website is still a terrific resource. It is still a free resource for all Victorians. You can go on, have a look and see whether you are getting the best energy deal – how your current plan stacks up compared to the Victorian default offer and how it compares to other options that may be out there. I really again encourage all Victorians to make use of that Victorian Energy Compare website, because it is a fantastic way to keep one of the many cost-of-living pressures down; as we know in so many other places, things such as groceries have been going up as well.

The bill that we have before us today addresses this fundamental role that energy has in all of our lives. It powers our homes, our shops, our businesses and our places of work. As I say, as we are taking these next steps in Victoria’s renewable energy future, this is a bill that will also help us to achieve all the many reforms that are taking place. We have of course as well in recent years tripled the share of renewables in our state’s power generation, which is a testament to initiatives such as the Solar Homes program, another initiative of this government. That has provided rebates to more than 300,000 Victorian households and supported them in getting rooftop solar. We have also of course funded the installation of the Victorian Big Battery, which is the largest in the Southern Hemisphere, which is another good thing to see as well. Cumulatively, all of these investments, as I say, are not just words. It is not just putting things out and hoping it will happen; it is taking real and tangible action, and real, tangible action gets real results. The real results that we have seen since 2014 are that, again, we have reduced our greenhouse gas emissions more than any other state in Australia over the past 10 years. We are leading the nation in reducing our greenhouse gas emissions, with targets of renewable energy output of 65 per cent by 2030 and 95 per cent by 2035. Again, when we say these things, Victorians can have the confidence that we will deliver those outcomes, because we have delivered already so far. But the rapid evolution in our energy generation also demands that our safety and regulatory frameworks also evolve at a very quick pace, and this section of the bill and the things that this particular bill focuses on are crucial because they seek to bridge the gap between what is in our current legislation and what we need to get to to achieve the needs of what will be a modern, dynamic energy market.

Furthermore, by adopting the national retailer of last resort scheme in Victoria the bill will also ensure continuity of service and enhance consumer protections across the state – noting, in terms of consumer protections, one of the very early acts of this government almost ten years ago was in fact to double the wrongful disconnection payment. Previously it was $250 per day under a wrongful disconnection; under this government that was doubled to now be $500 per day. We hope to of course see no-one wrongfully disconnected, and it is important that the financial measures that are in place, the punitive measures, are rigorous and reasonable. The $500 amount certainly meets both of those requirements but also ensures that anyone who does encounter a wrongful disconnection has financial support provided to them. I know of constituents who have been through having to make a claim on wrongful disconnection and who with the support of the Energy and Water Ombudsman Victoria were able to secure that as well as the waiver for some unfair charges.

Some more key provisions that this bill will introduce are all about improving and strengthening the resilience of our energy market. Of course that key feature that I refer to is the national retailer of last resort scheme, which is going to be a consumer safety net ensuring that if an energy retailer fails, their customers will not be left without the essential service of electricity. Instead these customers will automatically be transferred to another retailer without disruption of supply. It will also, significantly, empower the Australian Energy Regulator by enabling it to oversee these transitions effectively. It will also as part of this process grant the regulator the authority to allocate customers from a failed retailer to capable successors, ensuring that the new providers are equipped to handle any increased surges of demand that such an event would obviously create. This is critical for maintaining the quality and reliability of service for all Victorians and for those customers affected directly by a failure of a power company right through to those customers of those capable power companies, ensuring that their supply is also maintained.

Additionally, the Essential Services Commission of Victoria will play a complementary role in this process. Whilst the national scheme is designed to align our state with the broader national standards, ESC will still have a role to play as well – ‘ESC’ of course referring to the Essential Services Commission and not the Eurovision Song Contest, as wonderful as that performance was last week. The dual approach of this maintains Victoria’s high standards of consumer protection, which are amongst the strongest in the country, and by strengthening this, this will continue so that all Victorians can keep the lights on.

The benefits for consumer protection, economic stability and environmental responsibility are all features that this bill will achieve. By integrating into that national retailer of last resort scheme, it will directly support Victorians with their electricity supply in those cases where they may, through no fault of their own, see disruptions due to a market failure of any particular operator. I do again draw that comparison that we have often seen in this place. On this side of the house we are delivering policies that are achieving real and tangible benefits – and again I refer to the Victorian default offer. Just recently we have seen an average reduction in power bills annually under this Victorian draft default offer – of $112 for households and $266 for small businesses. That is a real and tangible result that everyday Victorians in my electorate and in the electorates of all other members in this place will be able to benefit from. Again, I urge all people looking at their power bills to take up the benefits that the Victorian Energy Compare website offers.

We know that when you have clear targets and clear policies and you work towards delivering them and you achieve them, you provide that certainty for the marketplace as well. You provide that certainty for industry to invest, whether it is in state-shaping projects like Star of the South or the Big Battery or in smaller projects. The framework and the government have such an important role to play in setting the scene and in having the policies in place and the legislation in place – the legislation we are discussing today being one small part of that. Once you have that in place you give industry the ability to invest and to deliver those renewable energy projects that will make such a difference.

In contrast, as we saw when those opposite were in power federally and we saw the 17, 18 or 19-odd different policies, when you are changing a policy as much as you change your underwear, you get bad policy outcomes for Australians, you do not achieve what you set out to, you do not achieve emissions reductions and you certainly do not achieve price reductions either.

The fact that Victoria has been able to secure such gains – again leading the nation in reducing our greenhouse gas emissions, despite a completely chaotic and dysfunctional federal government in Canberra for the first eight years or so of this state government’s time – goes to underline the effectiveness of the investment that we have been making even as other parts of the country have been held back even further by the negligent actions of the former federal Liberal government. Whilst it is very good to have a safer pair of hands at the wheel in Canberra now – we are not seeing party spills every other week and we are not seeing a change to their energy policy every other week as well; that is very, very good to see – Victoria does still remain ahead of the pack with our targets, which is where we like to be. We like to be achieving those targets as well, which is what we are certainly doing. We encourage other states and indeed the Commonwealth to join us in our ambition, but either way having a supportive federal government in this space is certainly making a big difference. And when you have both levels of government working in the right direction, you also see benefits such as we have seen through the Victorian draft default offer.

This is a straightforward bill. It is a good bill. It achieves good outcomes for consumers, particularly for those going through difficulties through no fault of their own, if their electricity retailer happens to fail. For those reasons and also as part of supporting our renewable energy transition, I do commend this bill to the house.

Melina BATH (Eastern Victoria) (15:13): I am really pleased to rise today to make my contribution on the National Energy Retail Law (Victoria) Bill 2024 and in doing so to put the grounds for its intent – what this bill is designed to do – to ensure that Victorians do not have their power cut off if their energy provider of choice goes under. Under this bill – and the Nationals do not oppose this bill – the Australian Energy Regulator can and will automatically transfer customers to another provider if their existing provider ceases to exist. The bill does this by making a number of amendments to the Electricity Industry Act 2000 and the Gas Industry Act 2001 and some other technical amendments. It is designed, naturally, to protect consumers, to protect the person in their home from a retail failure. This will give the government the option to create a retailer of last choice. That is the theory. That is all about providing sustainability of service and providing that continuity of connection. I heard from the previous Labor Party member a really wideranging debate, so I feel that I probably have a very big paddock to walk around in in this debate. We heard about a suite of policies. We heard about the SEC, which I am happily going to prosecute – what is happening or not happening or failing to happen with the SEC.

The Star of the South is something that I have, since probably about 2017, supported and endorsed – the very good groundwork they did in terms of community consultation. That is a really interesting one, because Star of the South and others have done it very well as opposed to the Labor government, which has often conducted consultation and then gone out and done exactly what they were intending to do prior to consultation – many of the people in my region, the Eastern Victoria Region, and others, talk about being consultold by this Allan Labor government. Also, on the power saving bonus, I know that many people in my Eastern Victoria Region who are absolutely on their knees and desperate under the weight of cost-of-living pressures were able to access that. He did not mention the Latrobe Valley Authority – I think I might give that a run too in my contribution – in the lovely province of Latrobe Valley and the importance of a transition plan in that space, which I think the LVA has unfortunately failed in dismally.

But let me talk about gas, because part of this is impacting the Gas Industry Act 2001. What a world of confusion the Labor Party exists in on gas. It is absolutely at sixes and sevens. We see, on the guarantee of supply, that the Australian Energy Market Operator – and this is the competition watchdog for Australia, as we know – warned recently in the media that New South Wales and Victoria will face gas shortages this winter. I am going to go to a case study – and it is absolutely despicable for humans to have to exist like this – of a most beautiful lady in Latrobe Valley. I will paint that picture shortly. But federally we have got the federal gas strategy that came out in the last week or so, and Labor now backs gas to beyond 2050. That is the gas strategy. The Albanese government is going to, so the media tells us:

… shed its ambivalence towards gas, adopting a strategy that locks in its use beyond 2050 to underpin renewables, power manufacturing, and help trade partners manage their energy transitions.

In effect this is something that the Nationals and the Liberals have been speaking about for some time. When you have targets, when you are in a transition phase, there has to be a plan to provide continuity in our energy supply – in our electricity supply and in our gas supply. But this Labor government over the last 10 years has been absolutely wilfully neglectful of its duty to keep prices down and keep supply in a reasonable space.

The federal minister Ms King said the future gas strategy:

… will mean a continued commitment to exploration, and an openness to the kinds of foreign investment that have helped build the industry into the powerhouse it is today.

The federal Treasurer Mr Chalmers says gas will play a crucial role in the energy and net zero transformation. Well, we know when the powerlines fell over in the western side of the state a month ago – when there were storms and they fell over – what kicked in. Certainly I know by looking at the national electricity market regulator that the coal-fired power stations in the valley kicked in to their maximum, but we also knew that the gas peaking plants kicked in. For this government to have such a gas ban mentality is absolutely quite frightening. We on this side support a transition, and we have been on record about that. The Nationals support a transition, but not a transition at all costs. You have to keep the lights on and the electricity to our hospitals – those beautiful hospitals that are so stressed at the moment with the abandonment of the government. We need schools, and we know the importance of keeping electricity to schools and all of our industries associated. Gas and electricity are very important.

But what does Lily say? Well, Lily has a gas substitution road map. She is banning gas. It is her mandate, her ideology, banning gas, and we have seen that. We have seen the ban on gas: no more gas on your cooktops in new establishments, in homes or in apartments or apartment blocks or the like – no more gas. Indeed, speaking with people at the coalface of need in Victoria, we know that they are quite concerned about how that will actually roll out. The electricity required, the infrastructure required and the power required to run solely electric in your home, whether it be in an apartment block specifically, are going to make real compromises to that structure, and they have raised those concerns with us.

Will this ban on gas actually undermine both our gas supply and our electricity security? This is what this bill is about. It is saying, ‘If one supplier falls over, we’re going to be able to pick that up, and you’ll be able to get your energy through.’ But what do we see with Mr Ben Carroll? He has a different opinion. We have the federal government with one opinion, changed now, and then we have Minister D’Ambrosio, who is ideologically opposed to gas. Then we have Mr Carroll coming out and saying on radio the other day:

We’re keeping it … a lot of Victorians like cooking with gas.

He also said he endorses cooking with gas; he uses gas in his home as well. Many of our wonderful restaurants in Melbourne and right across Victoria and my Eastern Victoria electorate use gas for their beautiful cooking of our fine produce. So we are getting these mixed messages on banning gas by the state Labor government. It is confusing, and it is frightening people in their homes. I will quote a letter from a man whose lovely mother is 95 years old. Pat Wells wrote to me only this last week:

… my 95 yo mother who lives in Traralgon has recently been admitted to hospital emergency verging on pneumonia. She usually lives independently but recently when back in her home family members have been staying with her to care for her health and safety needs. We have struggled to get her to put her gas wall heater on overnight as she has been very insistent in not allowing us to turn it on, as a result she has been waking during the night in a distraught state as she is so cold and shrivering further exacerbating her health condition. We finally convinced her to keep her gas heater on a constant lower temperature for her health and comfort. We eventually discovered she thought she was not allowed to use her gas appliances because of the constant messages from the governments –

federal and state governments –

about the shortage of gas supplies. I am concerned about the mixed messages and scare tactics being used by the governments and how this is impacting on elderly and vulnerable people in the community.

Woe betide this poor lady, this beautiful 95-year-old lady, who should be warm and comfortable in her home. Because of this messaging on banning gas, this whole philosophy that the current state government has on the evilness of gas, this lady took it to heart. She turned off her gas heater, and she then became so cold she was verging on pneumonia and had to be taken to the hospital. Shame on this government for that.

I want to just pre-empt a couple of things that we have heard a number of times in the past when we have had energy discussions in this house. We have heard, from the speaking notes provided to some of the Labor backbenchers, about fracking. I just thought they need a bit of history and a bit of an update to stop the fracking fallacy that frequents the floor of this place. I want to put on record that in 2012 the then Liberals and Nationals in government announced a fracking moratorium. Indeed fracking has never occurred under a Liberal and National government. In contrast, the previous Brumby–Bracks governments issued 73 licences for unconventional gas exploration and approved 23 fracking operations without public consultation – again, people were consultold. So I want to put that on record, because these are the facts.

Of course we also have taken to previous elections in my time very sensible gas policy, and that has been about onshore natural gas where farmers have the right to veto that exploration on their land, but if they choose to adopt and go ahead and agree with the importance of natural gas and agree with the benefits that could occur, then they also have the right to have some of the royalties – also, that particular gas that is made in Victoria gets to stay and be used in Victoria. So that is a history lesson on the Nationals’ and Liberals’ policies in the past – just an update for people on the other side.

We also know the importance of our food and fibre, and we do not like the fact that we have recently been silenced and that this government has removed the right of people to go to VCAT and protest and request and oppose and have VCAT investigate and challenge any decisions. The Minister for Planning has removed that fair right of assessment. What we also know about, in my last minute – I had many more things to say – is the cost-of-living pressure that this current government is creating on the shoulders of families and indeed mature people in our electorates. The cost of electricity has gone up, according to ABS data, 25 per cent over the past 12 months. Gas has increased 22 per cent – that is from St Vincent de Paul.

I do not have a problem with this bill. What I do have a problem with is the minister creating fear in our people, creating fear in elderly people, flipping and flopping all over the place and putting a ban on gas. Gas is a sensible transitional source, and when there is no longer a requirement for it, then let that go. But until that point we take the point of the federal government, which has changed its tune.

Sheena WATT (Northern Metropolitan) (15:28): I appreciate the call today and the opportunity to speak in this place on the National Energy Retail Law (Victoria) Bill 2024. I have spoken many times in this place on many bills about the importance of energy reform, renewable energy targets and the re-establishment of the SEC. For the work being done by this government in the energy sector I really must commend the Minister for Energy and Resources in the other place. We have certainly achieved so much reform in energy while continuing to deliver the cheapest power prices to Victorians, particularly compared to the rest of the country. But there is more work to be done. There is always more work to be done for Victorian consumers, who continue to be at the very centre of our reforms, and that is what this bill before us is about and who our work in this place is for – Victorians – each and every day.

In practice, this bill will adopt the national retailer of last resort scheme in Victoria provided for in the National Energy Retail Law. Whilst Victoria itself has had its own successful retailer of last resort scheme since 2007, recent energy market instability has prompted this government to assess the scheme’s suitability. Over the last two years there have been a total of nine retailers that have failed across the east coast electricity and gas markets, including four in our own state. Factors such as a surge in wholesale gas and electricity prices coupled with unexpected global events, such as the war in Ukraine, have added substantial strain on our retailers. The bill before us will provide the Australian Energy Regulator with the power to direct the failed retailer’s gas contracts and supply to the retailer that takes on the failed retailer’s customers. This ensures that the retailer has the necessary gas to service a larger consumer base. This provision addresses a critical and crucial gap in Victoria where the Essential Services Commission does not have equivalent powers.

But this bill is about much more than adopting a national retailer of last resort. This bill is about protecting Victorian consumers from the failures of retailers. This government has a long track record of standing up for consumers and protecting consumers from corporate greed and of course dodgy retailers, where they exist. The fact is that we are bringing back the SEC – it truly does speak to this – providing a cheaper alternative to energy retailers by providing reliable renewable energy to consumers. We are building our own renewable energy projects – building community batteries, building neighbourhood batteries and power storage that will keep the lights on for communities during emergencies to safely conduct business during unforeseen outages – to strengthen the resilience of our power grid.

Victoria has its own energy retail laws, and they are regulated by the Essential Services Commission and tailored specifically to the needs of and to benefit Victorian consumers. This last resort scheme is really another way to give those Victorian consumers protective measures that are needed. It aims to transition our customers to alternative energy providers in the event that their current provider collapses, and it ensures stability, guaranteeing uninterrupted power supply for consumers. Unlike other states and territories, whose retail laws are regulated by the National Energy Retail Law and monitored by the Australian Energy Regulator, Victoria maintains its own regulatory framework enforced by the state’s Essential Services Commission. Victoria continues to have some of the strongest energy consumer protections in the country, and it is something that that we are very much proud to continue – to stand up for Victorians.

In 2016 we commissioned the independent and bipartisan review of the electricity and gas retail markets in Victoria, known as the Thwaites review, to examine the operation of the Victorian electricity and gas retail markets and provide options to improve outcomes for consumers. In 2017 the final report of the Thwaites review was published, and it included 11 recommendations to encourage energy markets to be simpler, fairer and more affordable for all Victorians. The following year, in 2018, the government publicly released the response to the Thwaites review and supported all 11 recommendations.

Our government has introduced a number of rules to make the energy market clearer and fairer, including forcing retailers to tell customers if they are on the best deal on every bill and banning some really dodgy short-term discounts. Some of the things that come to mind on the actions we have taken to protect consumers include the increase of the utility relief grant, from $500 to $650 per utility in July 2018. In July of that same year we introduced the first power saving bonus. We introduced the payment difficulty framework in January of the following year. We expanded the eligibility criteria for the utility relief grant and made it easier to apply for; that happened in mid-2019. At the same time we introduced the Victorian default offer. With that, can I just say one thing that I was particularly pleased about came about in July of 2020, which is that retailers can only change prices once per year, really ending the bait and switch which was happening to far too many consumers. Of course in January of 2021 there were some rule changes that came into effect that meant Victorians no longer have to pay bills going back nearly a year if their retailer in fact fails to bill them correctly. At the end of 2021 we banned those door-to-door sales and cold calls by retailers and banned win-back offers. This I think has been enormously popular with the community. Any of us that has ever faced one of these quite hostile characters in door-to-door sales knows that they are not always welcome, so I was very happy to see that initiative take place from December of 2021.

Through this work we have become world leaders in renewable transition. We have tripled the renewable energy share of the market in the 10 years that we have been here. We have transitioned away from the outdated fossil fuel power plants of the past towards really some cheaper energy that capitalises on the surplus of sun and wind that our great state is supplied in such ample volumes.

We introduced the Victorian default offer – I said that earlier – into the market, which does provide Victorians with competition and drives down energy prices. Can I just say the new draft offer shows an average of $112 or a 6.4 per cent decrease in electricity bills for our residential consumers. For small businesses that works out to around $266, or a 7 per cent decrease, and that is really money back in the pockets of Victorian families and Victorian businesses. This reduction in energy bills is primarily driven by wholesale energy costs declining as a result of our renewable energy investments. There are of course 360,000 Victorians that are on the Victorian default offer and will see this direct bill saving. Can I say we have also got 176,000 customers on embedded networks, and with those embedded networks the VDO is actually the maximum price that they can be charged. As somebody who has previously been on an embedded network, I have got to say some of those prices are quite runaway, so this is indeed very good news.

Victorians truly are big fans of our bold energy policy agenda. We heard it many, many times in the 2022 elections, and I continue to hear it quite loudly as I engage with constituents, particularly across my region in the northern suburbs. I am particularly happy to see so many initiatives there focused on vulnerable Victorians. I really am a big supporter of the fact that we are about protecting Victorian families and businesses from the failure of the market, because when these retailers collapse, Victorians and Victorian energy consumers should not have to bear the consequences and be cut off from the energy that they need, and that is exactly what this bill before us is about.

In Northern Metro we are set to install a community solar power storage battery, something that I am particularly pleased about. That will be going into Brunswick, being one of the 52 recipients announced in the first round of funding by the federal government’s program. This 500-kilowatt battery will be able to store and redistribute excess solar energy generated by about 10 per cent of the dwellings in the Brunswick area that already have solar panels installed, so there you go.

I am particularly pleased to get up here and join my colleagues in speaking about our energy transition and our move to a more reliable energy grid, and I am continuing to listen to community as they tell me that they are keen for action on climate. This transition, I have got to say, is not a nice-to-have for our community; it continues to be a must-have as the global impacts of climate change begin to be felt around the state and the country. We know that April 2024, just last month, was warmer globally than any previous April in the data on record, and it is true to say that we have had months and months in a row of the hottest month ever on record. This is something that we take quite seriously. There are a number of scientific findings by some leading experts that really do show that the impacts of climate change are being felt not just in temperature records but in all sorts of other ways. We are taking these matters seriously, the scientific findings made by our experts, and we just must do more. We are not just listening to fossil fuel lobbyists or pro-nuclear lobbyists, who would see parts of our state that we very much love become nuclear exclusion zones. What we want is lower power prices powered by renewable energy for Victorians.

I have got to say that there is probably more to be said in my contribution, but I will finish off with some remarks around the SEC. It is something that I am very pleased to speak about. The fact is that we have brought back the State Electricity Commission, which is investing more than $1 billion in renewable energy projects, which will drive default offer bills down by 6.4 per cent for Victorian families in the next financial year.

This bill provides better financial protections to customers affected by a retailer of last resort event. Unlike the current one-time fee imposed on customers of failed retailers in Victoria, the bill spreads the cost across a wider consumer base, mitigating the impacts on those unexpectedly impacted by retailer failure. This piece of legislation before us in this chamber is another step and another building block in Victoria’s energy future, one that the Victorian people voted for. I am proud to be a member of a government that believes in climate science, in reliable power and in actioning and delivering results for everyday Victorians, for vulnerable Victorians and for anybody who wants to keep the lights on, and for that I commend this bill to the Council.

Evan MULHOLLAND (Northern Metropolitan) (15:42): I rise to speak on the National Energy Retail Law (Victoria) Bill 2024, a bill for an act to apply as laws of Victoria, subject to necessary modifications prescribed under regulations, provisions of the National Energy Retail Law providing for retailer of last resort arrangements and the other provisions of that law that support the effective operation of those provisions, to make related amendments to the Electricity Industry Act 2000 and the Gas Industry Act 2001, to make minor technical amendments to the Electricity Industry Act 2000 and the Gas Industry Act 2001 to improve their operation and for other purposes.

We do not oppose this bill. It is designed to ensure that Victorians are not left in the dark if their energy provider goes under. As I said, that is done through a handful of amendments. It protects consumers in the event of retail failure. If only we had protection for ministerial failure. I think the Minister for Energy and Resources is deeply failing in her portfolio and pushing up the cost of energy for all Victorians. We have seen both contradictions and this petulant back and forth between Labor governments in regard to gas. The government is all over the place on whether it actually supports gas or not. This is what I think has happened: they have been going off on a tangent, calling gas ‘fossil gas’, as the minister immaturely describes it.

Ryan Batchelor interjected.

Evan MULHOLLAND: But then we saw Ben Carroll, the Deputy Premier – I know Mr Batchelor might not be a fan of his – go on the radio and state that Victorians quite like gas and that he uses gas himself, seemingly contradicting the minister’s petulant campaign against gas. And they have realised it, because we have all seen the polling in regard to gas. Victorians love cooking with gas. They do not want their gas appliances taken away. They do not want to have to pay massive amounts of tax if they have to repair a gas unit, and if they move into a new home in a greenfield development, they want to have the opportunity to access gas. But this government does not do that. I will tell you what, you do not create a gas substitution road map if you do not intend to ban gas altogether for all Victorians. That is the intent of what this government wants to do. They want to ban gas throughout Victoria. They do not want Victorians to have the opportunity to use gas, and they want to minimise choice for all Victorians in regard to their usage of gas.

I know many businesses who rely on gas. I was at Sparkling Beverages last week, a great manufacturer in Campbellfield, and the owner Scott Edgley was telling me and the Leader of the Opposition John Pesutto, who came also with Shadow Treasurer Brad Rowswell, how much he relies on gas and how the cost of gas is making it harder for people. This is a specific example of how the Labor government’s ineptitude when it comes to energy is directly impacting on the price at the check-out. Sparkling Beverages, a great manufacturer in the northern suburbs, actually produces the Woolworths-brand beverages for Woolworths, so all your colas, your tonic water – which I get very often for my occasional gin and tonic – and all the other beverages. When their energy bills go up, someone has to pay for that. When the government decides to increase the bin tax, the waste levy, in last week’s budget, someone has to pay for that. That is what this government does not realise. Labor wastes, Labor taxes and Victorians pay the price. This is what we see over and over. Victorians will be feeling it at the check-out as a result of this government’s ineptitude when it comes to energy and when it comes to waste. We know that this government wastes. When this government wastes, they tax, and it is Victorians that pay the price at the check-out. It is Victorians that pay the price due to the cost-of-living crisis going on at the moment. It is Labor that is minimising choice for Victorians.

Actually I think it says a lot about the contempt this government holds for people living in growth areas. They are willing to say to some Victorians, ‘You can have your gas appliances for now, until our Gas Substitution Roadmap is in full effect.’ But for those who have decided, whether it be recently arrived migrants or young Victorians, to make the choice to live in a growth area and buy a new house and land package, they are discriminating against those Victorians by saying, ‘We don’t want you to have gas; you can only have all electric.’ It is discrimination against people living in growth areas to say they will not have access to what the rest of the state has access to.

I know many businesses in Victoria that are struggling with the cost of gas. I visited recently a great Chaldean business, Bamboo. I met with Salim Sanaty from Bamboo on Sydney Road in Campbellfield. They have seen increases in their cost of energy, and someone has to pay for that. As I say, someone has to pay for that, and the people who pay for that are the people who come in. Although this government might like to think that you can, you cannot cook fantastic Iraqi food on an electric stove or on electric induction at mass scale in restaurants. It just does not work. So when the cost of gas increases due to the shortage of supply in Victoria, someone has to pay for that. When Labor wastes and Labor fails – as this minister has in regard to our energy – it is Victorians that pay the price.

I do not think those opposite have actually read the future gas strategy from their federal counterpart – I do not think they were particularly pleased with it – but we know both the Australian public and the Victorian community do not actually hold gas in contempt like those opposite do. They hold the use of gas in contempt. They want to convert everyone to electric as much as possible. And we know they will make it harder for anyone that has a gas unit or heating unit that breaks down. They will tax the hell out of them to convert to electric, which will end up costing them more.

Melina Bath interjected.

Evan MULHOLLAND: Exactly – worsening the cost-of-living crisis for all Victorians.

We know that competition watchdog the Australian Energy Market Operator has warned that New South Wales and Victoria will face gas shortages this winter unless extra supplies can be shipped from Queensland, but we see the minister just acting completely immaturely in regard to the federal minister Madeleine King pointing out this fact. She tweeted that:

… @MadeleineMHKing is more like a Coalition Minister on radio … How about talking the facts: 1. Qld gas is not doing ‘the heavy lifting’ as it remains a nett importer of Vic gas 2. There is no ban on Vic onshore con. gas exploration. And Vic fixed Iona – not you

Melina Bath: That’s Minister D’Ambrosio, is it?

Evan MULHOLLAND: That’s Ms D’Ambrosio. We see this immature, petulant slinging match between Labor comrades on Twitter, we have a minister that is failing in her responsibility as energy minister and we have former staff members for the minister going around town and speaking to businesses, scratching their heads and criticising the government’s approach to energy, having seen from the inside the realities of our energy market and now being very critical of the government’s energy approach. If only they could have perhaps convinced Ms D’Ambrosio otherwise. Gas will play a crucial role in our energy mix going forward beyond 2050. I have to agree with the federal Labor government that it will play a crucial role beyond 2050. It will play a crucial role in our energy mix and our net zero transformation. All Victorians will benefit from having choice in their energy mix. I know Victorians, particularly in growth areas, love using gas. Speaking to many communities, as I do, I know multicultural communities prefer using gas. Those that do not have access to gas even often use the woks on their barbecues to cook if they have moved into a home that already has a pre-existing electric stove, because they prefer the choice. Choice is what we need.

They will keep going back to their talking points. We hear discussions about the SEC and how great the SEC is going to be and how so much of the public support the SEC, but I think the Victorian people have realised this is a lie. If the SEC was going to be popular anywhere, it would have been in the seat of Morwell, and the people of Morwell thoroughly rejected the government’s approach to the SEC.

Melina Bath interjected.

Evan MULHOLLAND: It did not resonate at all. We see, especially recently from polling – including by one of their old Labor comrades from RedBridge – that the Victorian people really like using gas and see gas as playing a role in our energy transition. They do, as do the federal government. But this government is stubborn-headed when it comes to gas having a role in our energy future. You have got the Deputy Premier basically having to publicly distance himself from his own energy minister on the use of gas. The minister still has not revealed whether there is gas usage or any gas upgrades at her six different investment properties, as we saw reported in the Australian. Gas will play a really important role into the future. In my electorate people love gas, people love using gas and people want to have choice. As I said, it is discriminatory for this government to say to people in growth areas buying a new house and land package, ‘You can’t have the use of gas; you don’t have choice in the use of gas in your home, but everyone else does.’ So you are saying to one part of Victoria, ‘You’re not good enough to have that – we don’t like this form of energy – but everyone else in Victoria is fine.’ We know through their Gas Substitution Roadmap that they intend to extend this ban to all Victorians. You do not start a gas substitution road map unless you plan to wholesale ban gas for the use of all Victorians, and that is what they are doing in this state.

We see 120 jobs will go at Seeley up on the border by Christmas due to the Victorian government’s gas policy. We see South Australian Premier Peter Malinauskas rolling out the red carpet for business, highlighting his government’s approach to gas in relation to Victoria. So while other states are rolling out the red carpet for business, Victorian Labor are rolling out the red tape for business – and we wonder why we are in the state we are in with both the budget and our energy market, where Victorians are paying more. When Labor wastes, when Labor is incompetent, somebody has to pay for it, and it is Victorians that pay the price for Labor’s incompetence when it comes to energy.

As I said, we do not oppose this bill, but the government in regard to both energy policy and the cost-of-living crisis is found wanting when it comes to doing what we can to ensure lower energy prices for all Victorians.

Ryan BATCHELOR (Southern Metropolitan) (15:57): The National Energy Retail Law (Victoria) Bill 2024 is yet another reform from the Allan Labor government to better protect and take care of Victorians in the retail energy market and is a significant step towards safeguarding the interests of energy consumers at a time obviously when there is a degree of change occurring in our energy market, as I will go on to demonstrate in some detail, with the significant shift and transition that is occurring in the Victorian energy landscape towards renewable energy. There is a lot that is happening in the Victorian energy sector, and this legislation will help improve support and protections for retail consumers.

It is important that we do not let an opportunity go by without remarking upon just how significant the energy transition that we are seeing in Victoria is. We understand on this side of the chamber that climate change is real, that the effects that carbon pollution have on our environment, on our climate, are real and significant, and as one of the larger contributors to carbon emissions through our economy and through our society, our energy sector is one that we need to be working with to ensure that we can transition the energy sector from one that relies on the burning of fossil fuels to one that is powered by renewables. That is what is at the core of the Victorian government’s approach to energy transitions. We are nation-leading when it comes to transitioning our energy sector away from a reliance on fossil fuels towards the use and the embrace of clean renewable technologies that not only deliver Victorians the energy that they need but, as has been demonstrated again and again, are doing so in much cheaper ways. They are lowering power bills, lowering the cost of energy for consumers whilst delivering environmental benefits and delivering on action that is reducing the amount of carbon pollution in the air and making our energy sector cleaner.

It is quite remarkable what has been able to be achieved when we have had a state government led by an exceptional energy minister who is tenacious when it comes to the question of improving Victoria’s energy sector, making it cleaner and making it more affordable. We have more than tripled the share of renewable power generation in the state in the last eight years. We have supported households. We have given over 300,000 rebates to Victorian households so that they can help reduce their energy costs and embrace renewable and lower energy intensive usage in their homes and to give them greater control of their energy use through our Solar Homes program. We have held the Victorian renewable energy target auction, the country’s largest reverse auction for renewables, and we installed the Victorian Big Battery, the largest in the Southern Hemisphere, and made Victoria the home of big batteries. Others may have their bananas and their sheep and their prawns, but we have got big batteries here in Victoria, and they are helping Victoria transition to renewable energy and lowering costs for consumers. Through all of these actions and others we have reduced greenhouse gas emissions by more than any other state in Australia since 2014, and we are only just getting started. We already more than surpassed our renewable energy target in 2020 of 20 per cent. We exceeded that target. As a result of the confidence that we have in the policy direction that is demonstrating results, we have increased our 2030 renewable energy target from 50 per cent to 65 per cent and we have put a target at 95 per cent not long thereafter.

In the context of that overall renewable energy target we have put in targets for offshore wind, which we debated in this chamber in the last sitting week. We have got targets for energy storage. In relation to offshore wind we are going to have 2 gigawatts by 2032, 4 gigawatts by 2035 and 9 gigawatts by 2040, and the legislation that this Parliament just passed will set us up for that. To support the increase in renewable capacity we are supporting an increase in renewable energy storage through things like our battery program. We are going to have at least 2.6 gigawatts of storage capacity by 2030 and at least 6.3 gigawatts by 2035, and we have brought forward our net zero emissions target from 2050 to 2045, which is a fundamental transformation of our entire energy sector. But we are on track to do it, and with the policy settings this government has got in place, provided they are not derailed by those opposite, we will achieve our targets. This will be the most fundamental transformation of our energy sector in our lifetimes. The march of time is real, and we get older every year. But by the time we get to 2045–50 Victoria will be a fundamentally cleaner energy state, and I look forward to seeing that.

As part of that energy transition the implementation of this National Energy Retail Law (Victoria) Bill will help make sure that our consumer protections that are in place are keeping pace with the scale of the transition in the broader energy market. We know that the consequences of having a privatised and deregulated energy market mean that we need to put in place protections for Victorian consumers and protect them from adverse consequences that do take place in the private retail energy market. One of those protections is the retailer of last resort scheme, which ensures that customers of failed energy retailers are quickly transitioned to another retailer to avoid disruption to their energy supply. It is a mechanism that has been in place in the Victorian context for a number of years. As good governments should and good governments do, we have been examining that scheme, reviewing the scheme’s suitability. But it has also been the case that the national energy system and the national energy laws are catching up with some of the features that we have here in Victoria, and what this bill will do is adopt the national retailer of last resort scheme for here in Victoria. This national scheme, which already operates in a number of jurisdictions, provides a uniform framework for the managing of energy retail failures, ensuring consistency and reducing the risk of unintended consequences for the consumer.

What the scheme does is transfer customers to alternative energy retailers should their current provider fail in the market, so that households, largely, and others can continue to receive their supply of electricity or gas without disruption. It will empower the Australian Energy Regulator to direct certain contracts of supply to the retailer that takes on failed retailers’ customers and help ensure that some gaps in the current scheme that we have operating here in Victoria, especially with respect to the powers of the Essential Services Commission, apply. It also will allow for the transfer of affected customers to multiple retailers, minimising the disruptive impact across the community and the energy market from that transition, which is different to the existing arrangements here in Victoria and I think an improvement on them, and will provide better financial protection for affected customers of a retailer of last resort event – the events that generate the triggering of the retailer of last resort provisions.

The bill itself will provide better financial protection, spread costs and mitigate the impact on those unexpectedly affected in the aftermath of retail failure. Victoria will maintain its own regulatory framework enforced by the Essential Services Commission, and I think that structure demonstrates and makes clear that we have some of the strongest consumer energy protections in the country, and those protections will be retained here in Victoria as we move to the national retail law. It is an important step, as I said, in the way that consumers are protected as part of the transitions and as part of the evolution of our energy sector, as part of the evolution of the way that our energy sector is transitioning from fossil fuel based to renewables-based sources of transition. In doing so, as part of those changes, the government has been very clear to ensure that Victorians in the deregulated private energy retail market have access to lower prices, and it is clear that our government’s actions mean that things like our renewable energy focus are leading to some of the lowest wholesale energy prices in the national market.

The protections that we have put in place to ensure that Victorians have access to things like the Victorian default offer are also seeing those savings flow through, and the new draft Victorian default offer that will be in place from the middle of the year shows an average of a $112 or 6.4 per cent decrease in electricity bills for those on the Victorian default offer from 1 July. For small businesses it is a 7 per cent decrease on average – $266. That is lower prices that people on the Victorian default offer will be paying from 1 July, largely driven by the increase in renewable energy going into our energy supply, which is pushing prices down. Renewable energy is going up; power prices are going down. That is the consequence of this government’s policy settings with respect to energy here in Victoria.

So how many Victorians are going to benefit? Well, we know there are about 360,000 Victorian households on the Victorian default offer who will see this saving and there are another 176,000 customers on embedded networks, many of whom live in apartment buildings where the Victorian default offer is the maximum price that they can be charged. Many of those stand to benefit because we know that the default offer itself is lower than prevailing market prices, and so further decreases in those things are going to obviously result in lower power prices for Victorians. But more than that – more than just ensuring that our system has more and cheaper energy going into it, more than having settings in the market that ensure that our default offers are as low as they can be and on 1 July coming down – the government also has a range of supports for vulnerable Victorians, such as the utility relief grant. There is also tailored support for those struggling with energy bills through the energy assistance program, which since February last year has helped out more than 8000 Victorians. Things like the Victorian energy upgrades scheme and the Solar Homes scheme, as I said before, are providing real assistance to Victorian households to convert their household energy consumption to lower cost renewables. This helps reduce overall energy usage across the network, again driving down price.

What we are seeing here in Victoria is a policy framework that is not only ambitious but being delivered. It is not only focused on giving Victoria the kind of energy sector that will meet our future needs but also helping lower power prices today. It is delivering the power that Victorians need, it is delivering it cheaper and it is ensuring, while we do so, that those Victorians have the kinds of consumer protections that absolutely they should have. This is an important piece of legislation, and I am pleased to support it.

Georgie CROZIER (Southern Metropolitan) (16:11): I am very delighted to be able to rise and speak to the National Energy Retail Law (Victoria) Bill 2024. As my colleague Mr Davis has said, the government’s response to a number of things around gas policy shows that they are ideological and not practical. I will come back to those comments, but I am pleased that this bill actually addresses the issue that should an energy provider go under, then the Australian Energy Regulator will be responsible and ensure that we are not left in the dark, so to speak. The AER will automatically transfer customers to another provider. I think that is very reassuring for Victorians, because there are so many Victorians that are very worried about their lights going out.

As I said, Mr Davis made that point in relation to comments between the state Minister for Energy and Resources Ms D’Ambrosio and the federal minister Ms King, who is a supporter of gas, where we have got this ideologically driven minister and her government having this spat over gas being imported from Queensland. Her federal minister corrected the record and said that Queensland is doing the heavy lifting of pumping gas to the whole of the east coast. Well, that started off a hell of a blue between those two, but I think the ACCC really did put it all into some perspective when they actually corrected the record for Ms D’Ambrosio. I mean, you have got to see the tweets – they are actually quite amusing – between the state minister and the federal minister. Nevertheless the ACCC’s latest report makes it very clear that Victoria is facing a gas shortage in the next quarter if not for Queensland gas stepping in to ensure Victorians continue to have reliable and affordable gas this winter. That is what is happening, and for the minister to say that is not happening just shows what disarray the energy policy in this state is in. She is already responsible for banning gas in new households. What people are saying to me is that they are really concerned that the government has failed to understand – it is determined to turn off gas to all Victorians over coming years – that to rewire a house and to replace appliances is a hugely costly exercise, and the government has failed to even understand the impacts that will have on Victorians.

I am pleased that the Deputy Premier Mr Carroll understands the power of gas. He says, ‘I cook with gas – we’re keeping it – and a lot of Victorians like cooking with gas.’ That is what the Deputy Premier has said. He is going against his own energy minister in relation to how he wants to have choice, and I do not blame him. I think there are households out there that agree with Mr Carroll that they do want choice, and they want gas. It is a sensible, practical application that we need for our energy sector and our energy needs. It is absolutely ludicrous, this frolic that the minister is on, where she is shutting down gas and having this ridiculous spat with her federal counterpart, who actually understands what is happening on the ground. I am pleased that the federal government has taken a commonsense approach to this and understands that we do need gas and that this Allan Labor government is trying to shut gas down and is making it extremely difficult for Victorian businesses and Victorian households. We know that utility prices have skyrocketed under this government; there is no doubt about that. We get those complaints all the time in our electorate offices, and I do not think there are many on this side of the house that would disagree that that is a huge issue. When you talk to the community, when you talk to your electorate, they will tell you about utility prices and the cost and the pressure that is putting on them. I am sure they are talking to the government backbenchers as well. I know there are blank faces over there, but they know that this is a real issue.

We have to have a reliable energy supply in this state. We need it to be cheap. We do not need it to be so expensive that it puts our businesses out of reach of being competitive. We have had far too many companies that have left the state already because of the high prices. I would urge the minister to consider businesses, families and households in the impacts of her decisions. In any case, I think the points have been made that she really is on the wrong tram on this. Her federal counterpart understands the needs of Victorians better than she does, and her own Deputy Premier certainly understands the needs of Victorians better than she does.

In relation to this bill we need that assurance that the Australian Energy Regulator will step in and assist those consumers if a provider goes under. Let us hope that is not the case, but we have seen too many issues that have arisen in the state so far. I would hate for providers to go under and the lights to go out and for businesses, households and Victorians to suffer as a consequence.

Jacinta ERMACORA (Western Victoria) (16:17): I speak today on the National Energy Retail Law (Victoria) Bill 2024. I wish to begin with a Chinese proverb: ‘When the winds of change blow, some people build walls, others build windmills.’ This proverb has literal application in the context of Victoria’s renewable energy transition. We know that change is in the wind and that there is uncertainty about how the change will occur. We also know that Victorians want affordable and reliable energy. Another way of saying this proverb is that risk and opportunity are two sides of the same coin. We are dealing simultaneously with critical risks – with climate change and a failing, out-of-date energy supply system. The reality is we have been watching and experiencing energy market failure unfold over recent decades. The privatised energy market is an instructional example of how the market has failed residential customers and businesses. Prices have gone up and reliability has gone down. This has been our reality for too long, and I am proud of the Allan Labor government for tackling climate change and energy inequality head-on.

When Kennett sold off the State Electricity Commission in 1992 our state became a more unequal place. When the Kennett government sold the SEC they claimed it was laden with debt and had to be privatised. In fact the truth was very different. The Sydney Morning Herald, in an article on 9 November 2013, reported that the SEC paid a $191 million dividend to the state government and made a profit of $207 million. This article was titled ‘The shocking truth about the privatisation of power’ and went on to say:

… we have become hardened to the ridiculous amounts being charged for what is an essential service.

The Australia Institute published a report on 29 April 2013 expressing a similar position:

The analysis shows that since Victoria privatised power in the 1990s, electricity prices have outpaced inflation, increasing by 170 per cent compared with an increase of 60 per cent in the consumer price index.

Energy is an essential service. All Victorians deserve a reliable and affordable energy supply to their homes and businesses. Competitive markets and for-profit businesses have a central place in any pluralist society, and that is certainly the case in Victoria. However, when an essential service becomes unaffordable to a significant portion of the community, it is time for government to step in.

Electricity has become so expensive that many householders struggle to pay their power bills. Last year I hosted power saving bonus clinics in Portland, Warrnambool and Heywood in my electorate, and on more than one occasion residents mentioned to me that they had to choose between paying their power bills and buying food. I want to say that I stand here for all those residents of my community who must choose between eating and paying their power bills. That is why I am here. That is why my Labor colleagues are here. It is obvious that the market has failed.

Energy equality is an important principle of Victoria’s energy transition. I think we can all agree that access to energy is an essential service for safe and healthy living. A reliable supply requires a stable base load across our energy grid, yet the competitive market model overseen by AEMO, the Australian Energy Market Operator, periodically results in producers waiting for high prices before they sell into the market. I know that some corporate customers wait for low prices before they buy into the market. For example, some water corporations utilise the spot market to pump when the price is low. Of course during a cold snap or a heatwave, domestic consumption of energy goes up. These legitimate variable supply-and-demand behaviours can result in destabilisation of the grid, which can cause outages.

This is an example of where legitimate profit-driven behaviour can cause supply outages. This is not the kind of energy system Victoria can thrive under, an energy system where residential customers experience energy stress and where businesses cannot afford to rely on their supply. This is why the Allan Labor government is bringing back the SEC, and this is why our minister for energy, Lily D’Ambrosio, is working day and night to ensure that our energy transition achieves affordability, reliability and renewability. Government has an important role to play in driving our state’s transition in a fair, affordable and renewable way. Instead of using coal, the new SEC will deliver government-owned renewable energy to drive down power bills and put energy back in the hands of Victorians. The Victorian government is determined to ensure a stable transition.

As I mentioned earlier, the entire world is grappling with the urgent need to transition to renewable clean energy. We are dealing with the dual challenges of climate change and the inevitable closure of ageing coal-fired power plants. Both the government and the private sector are completely rebuilding our energy production system. This is the biggest disruption to our energy system since the introduction of the Victorian power grid, when households first connected to the mains power. My mother is 86, and she was 12 when the power was connected to her place at the farm in Nullawarre just near Warrnambool. That is 74 years ago and less than one woman’s lifetime. We are going through a period that Tony Seba accurately describes as ‘disruption’. Seba is a Silicon Valley entrepreneur who lectures in entrepreneurship and clean energy at Stanford University. His iconic book, first published in 2014, wins the award for longest title: Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. He predicted that decentralised generation of storage will supplant the centralised hub-and-spoke model that has dominated the past century – how right was he. Seba told RenewEconomy in 2023:

I am incredibly optimistic that by 2030, nuclear, coal, gas, big hydro, and oil will be all but obsolete … The world will be mostly powered by solar and wind, and most new vehicles will be electric. The architecture of energy markets is going from centralized to distributed …

It is the speed of this transition that is the most striking of his predictions. In discussing disruption theory he describes the difficulty in predicting the pace at which change will occur. An example commonly used for this theory is the incredible uptake we all witnessed of mobile phones. In 1985 AT&T made the prediction that 900,000 mobile phones would be in use by the year 2000. In fact the number sold by that year was more than 100 million. Another example is the transition from horse and carriage to car. A picture of Times Square in New York in 1901 shows the road full of horses and carts, with only one car. Twelve short years later the same photo showed all cars and only one horse and carriage. Imagine the impact on blacksmiths and farriers during that period – disruption.

Tony Seba is predicting the same transition for energy markets, and of course here in Victoria we know he is right, because the Victorian government has set renewable energy targets, re-established government ownership of energy by the SEC, incentivised renewable investments and legislated and regulated to facilitate the above. This bill is part of that very transition. The Allan Labor government is actively strengthening our energy market to adapt and innovate during this transition to renewables. We know where we are going, and we know when we want to arrive. We have some of the most ambitious climate targets in the world: 95 per cent renewable energy by 2035 and net zero by 2045. We are 38 per cent of the way on our journey, and that is no accident.

This bill provides further government intervention in the energy market to protect customers from the vagaries of the marketplace, in particular where an energy retailer fails. The bill adopts the national retailer of last resort scheme in Victoria provided for in the National Energy Retail Law. The retailer of last resort scheme is a key consumer safeguard designed to transfer customers to alternative energy retailers should their current provider fail in the market. The scheme ensures customers continue to receive electricity or gas supply without disruption. The bill acknowledges that in an efficient competitive market, market exit is a natural occurrence. The bill also allows for the transfer of affected customers to multiple retailers, minimising the disruptive impact across the community and the energy market. This stands in contrast to the current Victorian scheme, which does not allow additional retailers to be appointed. The scheme outlined in the bill today serves as the primary regulatory mechanism for dealing with market exits. The retailer of last resort scheme is another step to stabilise our energy future, therefore ensuring a more reliable energy service, to make sure we deliver an essential service for all Victorians.

I am proud that the Allan Labor government understands these dynamics and is proactively working through the disruption phase. When the winds of change blow, I know who I want at the helm: a government that is focused on the opportunities of this transition, not one obsessed with market ideology and fossilised technologies, a government that is focused on what Victorians need – affordable, reliable and renewable energy. I commend the bill.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (16:31): This bill continues our government’s record of protecting energy consumers and making the energy market fairer by adopting the national retailer of last resort scheme in Victoria. Since the Minister for Energy and Resources commissioned the bipartisan review of the electricity and gas retail markets in Victoria, the Thwaites review, in 2016, our government has taken action to make the retail energy markets fairer and easier to understand. We supported all 11 recommendations of that review, and we introduced the payment difficulty framework to protect consumers and customers from disconnections. We introduced the Victorian default offer to provide a fair reference price for consumers. We have had four rounds of the power saving bonus; we have forced retailers to publish their best offers on bills; we have prevented retailers from back-billing customers if the retailer made a mistake; we ended dodgy marketing practices, like short-term discounts and door-to-door sales; we have increased the utility relief grant and deployed four rounds of the power saving bonus; and we developed the energy assistance program to provide one-on-one support for people struggling with their energy bills. This is an incredible record, and this bill should be seen in the context of our ongoing commitment to protecting consumers.

The retailer of last resort scheme is a key consumer safeguard that transfers customers to alternative energy retailers should their current provider fail in the market. The scheme ensures customers continue to receive electricity and/or gas supply without disruption. Victoria has had its own scheme since 2007. However, recent energy market instability caused by the war in Ukraine has sent coal and gas prices spiralling and has highlighted some areas where the national scheme offers stronger consumer protections. Where we see a clear consumer benefit in adopting a national framework, we will move to that framework. The national scheme is already operational in several jurisdictions and provides a uniform framework for managing retailer failures. This will ensure consistency and reduce the risk of unintended consequences for consumers.

There are four key benefits to the national scheme. First, under the national scheme the Australian Energy Regulator has the power to direct the failed retailer’s gas contracts and supply to the retailer that takes on the failed retailer’s customers. This means that the new retailer does not have to go to the market to find the necessary gas to meet the increased demand from the transferred customers. Victoria’s market regulator, the Essential Services Commission, does not have the same power. Secondly, the national scheme also allows for the transfer of affected customers to multiple retailers. Under the existing Victorian scheme additional retailers cannot be appointed after an event, placing undue pressure on a single retailer. This creates a risk of cascading retailer failure, as the new retailer may not have the capacity to take on a large volume of new customers. Thirdly, the bill provides better financial protection for affected customers of a retailer of last resort event. Under the current scheme the customers of a failed retailer are charged a one-time processing fee. This is unfair, as very few people would have any awareness that their retailer is about to fail. The national scheme recovers costs across all customers on an annual basis, which minimises the impost on consumers. Finally, by adopting a national retailer of last resort scheme any future strengthening of the scheme will automatically apply in Victoria. For example, the national rule-making body, the Australian Energy Market Commission, has proposed reforms to energy ministers, including the option for small customers of a failed retailer to be transferred to a market retail contract which offers more competitive prices.

Unlike the other jurisdictions, where energy retail laws are regulated by the National Energy Retail Law and monitored by the Australian Energy Regulator, Victoria maintains its own regulatory framework enforced by the Essential Services Commission. Victoria has some of the strongest energy consumer protections in the country, and these will continue to apply. While the Australian Energy Regulator will regulate the National Energy Retail Law retailer of last resort arrangements to be introduced by the bill, the rest of Victoria’s nation-leading consumer protections, including the payment difficulty framework, will still apply.

In conclusion, the bill adopts a clear and robust scheme that ensures well-functioning exit arrangements, which are crucial for continuity of supply for households and energy.

Can I foreshadow that the government has house amendments, and I ask that those amendments be circulated now.

Amendments circulated pursuant to standing orders.

Ingrid STITT: Just by way of explanation, the amendments are required after the Office of the Chief Parliamentary Counsel noticed a small drafting error in the bill. As it currently reads, where a retail licence is revoked for one form of energy – electricity or gas – it would automatically be revoked for the other if the retailer held both. This was not the intention of the bill, which should treat gas and electricity licences separately under the retailer of last resort scheme. Although there have been no examples of a retailer failing in one energy market but remaining viable in another since 2016, ensuring that they are separated will ensure consistency with the national scheme, which is the intention of the bill. I commend both the bill and the house amendments to the house.

Motion agreed to.

Read second time.

Committed.

Committee

Clauses 1 to 25 agreed to.

Clause 26 (16:40)

Ingrid STITT: I move:

1. Clause 26, lines 23 to 25, omit all words and expressions on these lines and insert –

“retailer authorisation means a retailer authorisation within the meaning of the National Energy Retail Law (Victoria) that authorises the holder to sell electricity;”.

As I foreshadowed a little earlier, this amendment is required after the Office of the Chief Parliamentary Counsel noticed a small drafting error. We would commend the amendment to the house.

Amendment agreed to; amended clause agreed to; clauses 27 to 33 agreed to.

Clause 34 (16:41)

Ingrid STITT: I move:

2. Clause 34, lines 27 to 29, omit all words and expressions on these lines and insert –

“retailer authorisation means a retailer authorisation within the meaning of the National Energy Retail Law (Victoria) that authorises the holder to sell gas;”.

Amendment agreed to; amended clause agreed to; clauses 35 to 41 agreed to.

Reported to house with amendments.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (16:42): I move:

That the report be now adopted.

Motion agreed to.

Report adopted.

Third reading

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (16:43): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The ACTING PRESIDENT (Michael Galea): Pursuant to standing order 14.28, the bill will be returned to the Assembly with a message informing them that the Council have agreed to the bill with amendments.