Legislative Assembly for the ACT: 2000 Week 8 Hansard (29 August) . . Page.. 2495 ..
MR SPEAKER (Mr Cornwell) took the chair at 10.30 am and asked members to stand in silence and pray or reflect on their responsibilities to the people of the Australian Capital Territory.
MS CARNELL (Chief Minister) (10.32): Mr Speaker, I ask for leave to make a ministerial statement concerning the ACTEW/AGL joint venture.
MS CARNELL: I thank members. Mr Speaker, the introduction of the national electricity market together with national competition policy and independent regulation of monopoly businesses over recent years has fundamentally changed the nature of the energy industry. The changes have substantially increased the commercial risk faced by ACTEW, and thus by the ACT and its citizens.
The ACT government knew that these changes were coming and attempted to provide an operating environment in which ACTEW can prosper into the future and at the same time limit the exposure of the government and the community. Limiting risks and protecting and maximising the territory's interests are this government's primary objectives in supporting the proposed changes to ACTEW.
I am pleased to announce today that the voting shareholders of ACTEW, the Treasurer and I, have agreed to the formation of the ACTEW/AGL joint venture. Formally, the Treasurer and I have accepted the recommendation of the Chairman of the ACTEW board that we authorise ACTEW, in accordance with section 16 of the TOC Act, for ACTEW and its related entities to enter into contracts that will implement the joint venture, and authorise the ACTEW partners in the joint venture to grant equitable charges in favour of ACTEW over the assets to be contributed to the partnership as additional protection over the assets. In addition, we have agreed to enter into a memorandum of understanding with AGL in relation to other economic initiatives.
At present the ACT government is exposed to the full extent of ACTEW's financial and operating risks. These risks, should they come to pass, could result in a reduced shareholder value, lower dividends and tax receipts. In addition, consumers might be confronted with higher electricity prices.
In the competitive electricity market, ACTEW is disadvantaged due to its relatively small size and its limited capacity to grow. In addition, ACTEW's charges, its source of revenue, are constrained and subject to independent regulation. The establishment of this joint venture demonstrates that this government is prepared to actively manage the assets of the community in our care.