Mr President -

The Electricity Network Assets (Authorised Transactions) Bill 2015 and the cognate Electricity Retained Interest Corporations Bill 2015 presumes that the businesses that trade under the name Ausgrid, Endeavour Energy, and TransGrid are akin to the Plymouth Roadking Car.

Once the totem of modernism. A symbol of social progress. An example of the abundance and plenty available to all in a middle-class democracy.

Now: quaint. Its antiquity the source of embarrassment to its owner.

This is the attitude the Baird Government has towards this State’s transmission and distribution networks.

Like the Plymouth Roadking Car, the networks were built in the 1920s. In the eyes of this Government they have become lead weighing down the public’s balance sheet. Their mission to provide equity in the energy market complete.

They have become an asset to be liquidated to fund the flights of infrastructure fancy of this Premier, the Treasurer and whoever else dazzles the Government with a slick presentation redolent with 3D Animation and shiny prospectus.

The Government protests that this Bill does not provide for a sale. It only enables a lease. It claims that there are no deleterious affects that will result from this Lease.

But there is a simple fact The Government denies:

The transmission and distribution assets currently owned by the people of New South Wales are monopoly assets.

Their tremendous scale insulates them from the disciplines of market competition.

Meaning they, and they alone, decide who receives power; and the time and price people receive it.

They, and they alone, decide if the network receives investment. And they decide from whom the cost of that investment is recovered.

It is this power that makes these networks a unique class of business. With unique power over every New South Wales Household. Every New South Wales Business.

If this Bill passes — this power will escape the taming influence of a democracy. That influence will be traded for the mercy of a private monopoly. A private monopoly which will have unprecedented powers to decide how the people of New South Wales will be treated in the energy market.

This is the argument that has been made so eloquently by all my fellow Labor colleagues: The affect private monopolies have had on our energy past. Why those affects will return if this Bill receives this Chamber’s sanction.

So the question to which I turn is the affect an untamed monopoly will have on our energy future.

Whether a monopolist will decide which power generation technology will receive technical permission to join the grid?

Whether a monopolist will decide the speed those technologies –technologies which threaten their monopoly — will be permitted to spread;

Whether a monopolist will decide whether the cost of the transition to these technologies is shared fairly; or whether the alternative prevails: Price used to contain the spread of new technology — not to amplify it.

These questions all allude to questions about market design. And they make those allusions because rather of this Bill providing a schematic to steer the energy markets through the disruption that is resulting from the explosion of renewable energy — they instead provide only for an abdication.

They abdicate their responsibility to decide how power distributors will treat the newest class of power generators — the people who have put solar panels on their roof.

They abdicate their responsibility to use the moment presented by this bill to update Australia’s energy laws — so that the pace of disruption in our power markets is not settled merely by reference to which market actor has the most power;

That instead sub-ordinates the interests of all the players in the energy market to the public’s interest.

If this Parliament proceeds to pass this with these questions unanswered then this Parliament is adopting a market design for our energy market already known to have failed.

It is the market design that prevailed between 1997 and 2010 in the telecommunications industry.

That design stemmed from the Howard’ Government’s preference for a high sale price rather than the higher principle of structural separation and market regulation.

The design that left it to a private monopoly named Telstra to decide the pace of technological change — when Australia would receive Broadband; and whether it would be fibre-to-the-home or fibre-to-the-node.

The design that ceded the first-mover advantage available from whom ever organsied their uptake of these new technologies the fastest to countries like South Korea and Finland; who then built competitive and comparative advantages by being the first to trigger the affect of agglomeration in Cities like Seoul and Helsinki

That left it to a future Parliament and future Government to clean up the consequences of their abdication.

The energy markets today are akin to the telecommunication market of decade ago.

Like the telecommunication industry, the dominant business model is being disrupted by the emergence of new technology, new players and new interests.

The business model being threated in the energy market is the business model that carried power from the point of electricity’s production — a power station — to the point of electricity’s consumption: a home; a business; a Library or other public places.

The power stations that generated electricity in this model were (and are) are big businesses.

The transmission and distribution networks that pipe the power they produce to 9.5 million households on the Eastern Seaboard were (and are) also big businesses.

Both reflected the flavour of the industrial age.

Efficiency resulted from economies of scale.

Obtaining that scale required high levels of capital investment. Prohibitively high levels of capital investment. So high that the natural condition that resulted was a monopoly.

No longer is economies of scale the core concept of those entering the energy market.

Now, the proximity between the point of production and the point of consumption is, for many, the distance between their roofs and their living rooms.

Since 2008 over 280 000 solar photovoltaic systems have been installed on the roofs of NSW Homes.

Nationwide, approximately 1.4 Million systems are in operation.

These systems constitute the greatest investment in electricity creating capacity in a generation.

The power they create is clean and green and (most importantly) communal.

Because the arrival of what is termed ‘distributive energy’ is reflective of a social design.

People coming together to pool their power. Farmers forming co-ops to share risk. Apartment buildings making a collective choice to go clean.

Indeed, ‘distributed energy’ marks the revival of a Movement long considered extinct — the cooperative Movement. After all, collaborative consumption is simply the latest form of co-operation.

And it is threatening form.

So threatening that the energy market is in flux — with a political contest as furious as the contest joined by the legendary speaker of the US House or Representatives, Sam Rayburn to establish the Tennessee Valley Authority. As furious as the fight Lyndon Johnson waged to have the Tennessee Valley Authority connect the Texas Hill Country to the Texan power grid.

This contest is furious because over the next ten years, whom ever owns the grid will be making impactful decisions. And if it is an unfettered privately owned monopolist making these decision:

An unfettered privately owned monopolist will decide which technologies — solar, wind, natural gas or bio-mass — can connect to the grid. As well as the price they will pay for their connection.

An unfettered privately owned monopolist will decide the price paid for a person’s surplus power — and how often they will be paid this price.

An unfettered privately owned monopolist will decide the energy market’s response to the Earth-shaking revolution in battery technology; whether it will be priced to encourage uptake, or whether it will be priced out of the market.

An unfettered privately owned monopolist will have the power to decide if a rival business model is allowed to survive — let alone thrive.

No member should delude themselves about the stance of this bill towards those questions:

The Bill is silent.

The bill provides little of the fetters that ordinarily apply to privately owned monopolies.

No separate provision of a third party access regime that would let competitors access the transmission networks.

No attempt to update the mandates of the Australian Energy Regulator in supervising the energy market.

To require the AER to provide annual adjustments in consumption forecasts; forecasts that determine the level of cost recovery for the level of capital spending.

To require the AER to account for the rise of solar generating capacity in forecasting peak demand.

To subject the choice, pace and speed of technology uptake to a public interest test.

If this bill had provided for more than a mere disposal of assets; if the bill gave affect to a new market design — it would be a much improved bill.

It would have placed New South Wales at the forefront of the clean energy revolution.

And if Members seek an example of a jurisdiction that has gotten the regulatory model right, than I point them to Hawai.

Mr President -

Hawaii now leads the United States in energy transformation.

The Aloha State has experienced explosive growth in solar power.

From 0.8% of the renewable energy sector in 2007 to 29% in 2014.

With 53 409 systems providing 392.8 megawatt hours per annum.

The reason is because Hawaii has a structurally separated power industry.

The generator is different from the transmission networks. And the transmission network, by law, is required to be independent. Answerable to a regulator on the question I just asked.

Mandated to make access to its networks available to all selling power — renewable and non-renewable alike.