Energy Administration Amendment (Water and Energy Savings) Bill 2005
Reverend the Hon. Dr GORDON MOYES: The Energy Administration Amendment (Water and Energy Savings) Bill amends the Energy Administration Act 1987, principally to establish the mechanisms required for the establishment of both the Energy Savings Fund and the Water Savings Fund, initiatives brought about by the Government to encourage savings in water and energy. I wholeheartedly commend the purpose of the bill, although I find it strange that the initiative is not part of the New South Wales Budget to be handed down in a few weeks time. Perhaps the Minister is simply pre-empting the Treasurer.
Given the impending increase in population to 4.5 million and the current state of the environment, particularly in a time of drought, it is no surprise that governments will have felt the need to establish effective frameworks for the provision of basic utilities such as water and energy. Mechanisms for the provision of such utilities must be sustainable for the sake of future generations. Thus, a good government will have in place schemes to ensure that water and energy are provided to communities in a safe, stable and sustainable way. In my opinion, the advent of savings funds, as introduced in this bill, is one step closer towards realising effective water and energy reform.
I note that the Auditor-General’s performance audit report entitled “Planning for Sydney’s Water Needs”, dated May 2005, refers to a whole series of reforms. However, those reforms are not addressed in the bill. One of the main initiatives provided in the bill is the establishment of the Water Savings Fund and the Energy Savings Fund. The funds will go towards mitigating excess resource use, and conserving water and energy. It is envisaged that the savings generated by the funds will be substantial. The second reading speech states:
By 2010-11, the expected benefits from initiatives supported by the funds include: savings of between 30 and 80 billion litres of water per annum, which is 5 to 12 per cent of Sydney’s total water use … a gross saving in consumer energy bills of $370 million in net present value terms; and reducing greenhouse gas emissions by 800,000 tonnes of CO2 per year, equivalent to removing 170,000 cars from the road.
That it is a remarkable visionary statement, but the public wants a straightforward plan for closing the gap between supply and demand. We are still awaiting such a visionary plan. Minister Sartor has said:
The Government has evaluated all sensible practical options to supply, save or substitute water.
Indeed, the Government must employ a holistic approach to adequately deal with the water problem that we face. The bill’s initiatives will assist in remedying one aspect of this jigsaw puzzle. Reducing water consumption by consumers, both large and small, through the implementation of water-saving devices, and thereby providing incentives for businesses to create better water and energy saving strategies, is amongst the many reforms needed. However, it seems that this involves merely imposing a major tax on water use. Detecting new water supplies and exploring new ways to recycle water are also required. Water usage in the agricultural industry, which is a major issue, must also be addressed. Vast proportions of New South Wales’ water consumption go towards supporting the needs of our agricultural industry, particularly in a time of unusual drought.
The purpose of the Water Savings Fund is to provide funding for conservation projects, largely on a contestable basis, to encourage water savings and the recycling of water, to stimulate investment in innovative water-saving measures, and to increase public awareness and acceptance of the importance of water-saving measures. It is envisaged that the Energy Savings Fund could pay for measures such as specific energy-saving projects submitted by industry and commercial enterprises, specific energy-saving projects submitted by local councils and State government agencies, joint water and energy retrofit programs for residences, and increased investment in energy-efficient appliances. Projects put forward by business will be assessed on a contestable basis. It is great to know that money will be set aside for these purposes. But how will it be possible to differentiate between equally good causes? Attention must be paid to that issue.
How will these funds be resourced? The Minister will be able to require Sydney Water and the electricity distribution network service providers—EnergyAustralia, Country Energy and Integral Energy—to make annual contributions to the relevant fund by order published in the Government Gazette; in other words, by the imposition of a tax upon service providers. The order will specify such things as the contribution amount and the date by which it must be paid. Other sources of funds will supplement this main source, such as advances by the Treasurer, appropriations by Parliament, investment proceeds of the fund, or voluntary contributions by any person or body, including State agencies. I believe it is highly unlikely that that will occur.
The bill also provides the important initiative that certain categories of high water and energy users will be required to prepare savings action plans, setting out measures to save water and energy, which is commendable. These categories will be established by the Minister and published in the Government Gazette. The time frame for the preparation of such plans will also be specified in that publication. Some examples of these designated users include local councils and the top 200 non-residential water customers of Sydney Water Corporation. For energy, the designated users will initially include the 200 highest energy users from business, local councils and State government agencies. Plans are important because they establish a vision for the future. As stated in the wisdom of Solomon in the Old Testament, “Where there is no vision, the people perish.” That seems applicable here.
The bill amends section 40 of the Act to allow the Minister to require certain water and energy providers to supply information about the identity of high users and the amount of water or energy being used. Those required to provide both a water and energy savings plan can prepare one plan that covers both. It must be also pointed out that contributions to these funds will ultimately be passed on to consumers in some manner or form. The bill amends the Energy Administration Act 1987 to enable regulations to be made to allow for contributions that distribution network service providers are required to make to the Energy Savings Fund to be passed through to retail customers of electricity.
The Minister may require the Independent Pricing and Regulatory Tribunal, when making pricing determinations with regard to the provision of water services, to take into account contributions that Sydney Water Corporation and other State water agencies are required to make to the Water Savings Fund. The bill will give benefits to consumers, but there will also be a cost involved through higher prices for water and energy. With every action there is an equal and opposite reaction. There must be a sacrifice, a cost involved, to reap a benefit in this area. I am sure that many consumers will be content to part with more money in order to have greater security that their money will be managed wisely and distributed fairly to save both water and energy.
The community is keenly aware that Sydney’s inflow of water has been decreasing at an alarming rate and that by April 2005, Sydney storages had dropped to 41.5 per cent of their capacity, their lowest level in the past 45 years. More needs to be done to better manage water resources, such as reduction in leaking of old pipes and other infrastructure, the use of surface water, grey water, ground water and stormwater, and the like. All of this is difficult, but I commend the Government for the Energy Administration Amendment (Water and Energy Savings) Bill. The Christian Democratic Party will support the Government on this initiative.
