Territory Stories

Debates Day 1 - Tuesday 6 May 2014



Debates Day 1 - Tuesday 6 May 2014

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Parliamentary Record 12


Debates for 12th Assembly 2012 - 2016; ParliamentNT; Parliamentary Record; 12th Assembly 2012 - 2016




Made available by the Legislative Assembly of the Northern Territory





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Hansard Office

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Attribution International 4.0 (CC BY 4.0)

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Legislative Assembly of the Northern Territory



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DEBATES Tuesday 6 May 2014 4024 NewCo said - this is where it differs from the member for Port Darwin - this will help the government to: put a lid on power prices and to place downward pressure on power costs. Can you show us how that will happen? Show us where these savings will be which will put a lid on power prices. It has not happened. NewCo also said this will: provide the instruments for identifying and rooting out inefficiencies Again, I ask what the inefficiencies are: by putting more focused boards and management teams into place It also mentions finances being truly transparent. Ken Clarke said, during the Public Accounts Committee hearing, they have nearly broken up the divisions, so you can see what they are from a financial point of view. Benchmarking: A question was asked during the Public Accounts Committee hearing about being shown an equivalent system to Darwins, and there is not one. They were looking at Kalgoorlie, which is connected to the grid. It is difficult to benchmark when there is no one else in Australia to benchmark with. NewCo also says we will turn on the blowtorch on costs, which can only be done through competition. That is fine; I am not opposed to competition, but can someone tell me where the blowtorch will go and where costs can be cut? It is a statement. We have been around a long time, so someone must know how much it costs to run generation and where you would find competition. Treasury has said this will provide safe and reliable least cost electricity to Territorians. There is also a statement which says: the historical financial performance of Power and Water suggests these economies have been more than offset by the additional complexity that comes from integration. Ken Clarke said they are working to achieve financial transparency and have just about achieved it. The Treasury also said the boards of the GOC will exert: an increased degree of specialisation in their particular areas. What concerns me is supporters of this process are saying you will break it into three different companies. This will make it work better, they can concentrate, there will be three boards, three administrations and a fair bit of money will be spent, at least $6m or $7m. Can someone tell me if the Origin electricity company has broken itself into three different companies? It produces, undertakes exploration and sells power. I looked at Origins website, as far I could dig, and I found nothing to say it has been broken up. We are saying to Power and Water, You have to break yourself into three different companies and have three different boards. Origin has one board to run quite a large company. It has 4.5 million customer accounts. That is a large number of people, but it has one board. Why should you have three boards if you are trying to run an electricity company? The disadvantage of three boards is they do not start talking to one another, whereas with one board, the company knows how it is operating overall. All parts, such as retail and generation, talk to each other. They are not separate. One board is capable of running a company with 4.5 million customers. Why must we break ours into three? Are we not putting Power and Water at a disadvantage against other companies that come in, which have not had this similar break up? QEnergy is holding discussions with Northern Power. I imagine they talk to each other but are separate companies in the first place. If Origin Energy comes here, will we ask it to cut into three individual companies? I do not think so. Some of this advice, thankfully, came from the AuditorGeneral, and it gave me some indication I will read some of it because my argument is we do not need to break it into separate companies and can leave it as separate divisions, as Ken Clarke said they have nearly done already. The argument against that is, as Ken Clarke said, back in the days of Paul Everingham or Shane Stone, the pendulum will switch back and we will lose control. Do not forget we still have competition. We are saying that to improve competition we need transparency in how Power and Water operates. This is what Frank McGuiness, the Auditor-General, wrote back to me: Until 2007-08, Power and Water Corporation, along with all other entities, was required to include segmented information in the notes to its financial statements. A copy of the relevant note is attached. A change in accounting standards which flowed from a decision that Australia would adopt international accounting standards saw the requirement to include segmented information dropped for entities that did not issue financial

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