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Interview with Leon Byner, 5AA

12 June 2020

Interviewer: 
Leon Byner

Subject: Electricity prices, electricity demand.

E&OE

LEON BYNER: Now, I've got two issues about electricity which I want to discuss with the Federal Minister and I'm glad that he's available to come on this morning. But before we speak to Angus Taylor I've been telling you about businesses, and these are not necessarily big, big companies. For example, Pasta Deli got a power bill the other day, an ancillary bill for $1500. Now, he'd already paid his bill but that charge was because the people who were his suppliers and I understand it is AGL said well we paid more for the power so we're just passing this on. Pity you paid the other bill but this is separate. Only thing is some of the retailers were generators and during that blackout where we had no power from Victoria, right we had no, the grid was useless because it was disconnected. The generators made a cool $200 million. Some of those generators are retailers who are sending out these bills, because power retailers had to pay higher prices because we were cut off, right? Now, I think this is very unfair: where you pay a bill, and as it is, it's damn high and then you get this ancillary nonsense which is all, according to the system, no it's okay. Well I think it's unjust. Let's find out what the Minister thinks. Angus Taylor, good morning and thank you for coming on.

ANGUS TAYLOR: Thanks for having me, Leon.

LEON BYNER: What do you think about this?

ANGUS TAYLOR: Well look, it's the first I've actually heard of them passing on a separate bill - I'm very happy to have a look at that for you.

LEON BYNER: I think you should, Minister. With all due respect, this is-

ANGUS TAYLOR: Yes. Very happy to. Very happy to.

LEON BYNER: Business SA are all over it. I can assure you some are getting bills for several hundred, some several thousand - ancillaries.

ANGUS TAYLOR: Yeah, and look, the broader point here is this is what happens when you've got a grid that can't actually take you through those really difficult times like we had at that time. We saw, you know, the grid was being stretched to the limit, the transmission line was under pressure and, of course, we just didn't have enough local capacity to deal with the problem. So you know, that's what brings it about. Now, the way that retailers have dealt with it - I hear you loud and clear, very happy to follow up on that, and I could come back to you.

LEON BYNER: Do you think it's fair though?

ANGUS TAYLOR: Look, the truth is if they are gouging as a part of this, that's not on. I mean and you know, I'd have to have a look at that and see exactly what's been going on. But I will come back to you on that.

LEON BYNER: Fantastic. Well I'm going to, if it's cool with you, I'm going to give a contact straight to you from Business SA because they've had stacks of these calls.

ANGUS TAYLOR: Yep.

LEON BYNER: And when people pay their bill and they get another one they're going to think, hang on, what's happening here? So I'm glad you're going to look at this.

ANGUS TAYLOR: Yep.

LEON BYNER: Now, on another matter. There's a thing called demand side electricity - that is that rather than build more power or more capacity you go to the big users and others and say, look, we'll give you a financial incentive not to consume power which keeps the peak off or down and means the price may be less. But there's only one thing about this - I understand the theory - but if you've got a conveyor belt, if you've got a dry cleaning company, if you've got an auto electrician repair business, if you've got a smelter - you need electricity, you don't want to be paid to not do something, you want to be paid to produce.

ANGUS TAYLOR: The only way this works is if it's voluntary and if that smelter, or whoever it is, is in a position where they can actually not produce for a short period of time. And look, the whole point of this is there is an hour or two a year - and indeed we were just talking about one of those sorts of hours a moment ago - where if you can take pressure off, you take pressure off the price, you improve the security of the grid, the reliability of the grid, and you can provide a revenue stream for manufacturers. And it's a very short time period each year where you can make a real difference. We have done some of this in the past – it is not like this is new - but this would be much more systematic. And what it means is, you know, an aluminium smelter gets paid for the role it can play in our system, a really important role, which is a couple of hours a year it actually backs off - it won't back off completely, it won't turn off, but it'll back off, it's a huge user - we've seen this with Portland and it had an impact on the South Australian grid - and then take pressure off prices, make sure we keep the lights on, avoid the sort of outcome we were just talking about, and consumers as well as the manufacturer are better off.

LEON BYNER: Alright. I'm glad you're going to look at this first issue I raised this morning because for me, to send somebody a bill - I mean - for example, the business I talked about just got the bill two days ago, he's been shut down nearly, and through his own cleverness and that of many others he can now do takeaway and he can do home deliveries, but his restaurant up until recently, and even now he can only have a few in there. I mean his takings are down. I just think that the fundamental idea of going to somebody that you've already paid and saying, well, we had to pay more so here it is, pay up, I think is abominable.

ANGUS TAYLOR: I understand your point, and I mean the other point I'd make on this is that the wholesale prices are way down, and if they are not also being passed on then this is particularly an odious sort of outcome. So happy to have a look at that, happy to come back to you on it.

LEON BYNER: Okay. Good on you.

ENDS