Legislative Assembly for the ACT: 1998 Week 9 Hansard (19 November) . . Page.. 2690 ..
MR QUINLAN: Mr Speaker, my question is directed to the Chief Minister. Is the Chief Minister aware that one interstate publicly owned firm looks likely to buy out a privately owned power company in Victoria, and also that ACTEW seems to have negotiated a very sweet purchase deal with Delta Electricity? Specifically, Chief Minister, you may be aware that publicly owned Integral Energy is considered to be the likely purchaser of the privately owned Citipower in Victoria and that Integral's chief executive had publicly stated that it has solid bank backing for the $1.6 billion purchase. The reason cited, as reported in the Financial Review, was that the "willingness of the banks was based on the fixed `monopoly' charges available to electricity distributors in their network business". Chief Minister, isn't ACTEW's network business in the same position? Does this not confirm that that large and asset-owning element of ACTEW is not subject to the risk that you have been ascribing to it - speaking of misleading?
MS CARNELL: Mr Speaker, I am very pleased, and I cannot believe, that Mr Quinlan has brought up these issues. The fact that Integral Energy needs to maintain its position in its marketplace in New South Wales to buy another electricity distributor or another electricity entity in Victoria, I think, says - - -
Mr Quinlan: And the bank's backing them.
MS CARNELL: There is no problem with the bank backing them. Again, this shows the problem. Integral Energy is significantly bigger than ACTEW. In fact, from memory, Integral Energy has something like 750,000 clients, Mr Speaker. But Integral Energy do not believe that is enough, so they have to expand to maintain their position in the marketplace. How are they looking at expanding? By buying other entities. How are they buying? By borrowing over a billion dollars. Is Mr Quinlan saying that, for ACTEW to maintain its position, it has to grow? I agree with that. But to grow you have to be willing. There is no problem getting the money, but you have to be able to pay it back. So what Mr Quinlan is saying is that what ACTEW should do is buy an entity in Victoria, which is actually bigger than ACTEW itself, and borrow over a billion dollars that the taxpayer of the ACT ends up underwriting if the market does not go very well. That is what Mr Quinlan is saying. This just shows why - - -
Mr Quinlan: I rise on a point of order, Mr Speaker. Mr Quinlan never said anything of the kind. Mr Quinlan asked a question about the network business of ACTEW and asked about the risk associated with it compared with the risk of the retail business. That is what Mr Quinlan asked.
MS CARNELL: Mr Speaker, I understood that Mr Quinlan went on for quite a long time about Integral Energy buying a Victorian private power company, an arrangement that may be signed in the near future, I hope, between Delta Electricity in New South Wales and the ACT Government, and the issue of risk surrounding all of these issues.