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Legislative Council Legislative Council Wednesday, 9 September 2009 THE PRESIDENT (Hon Barry House) took the chair at 4.00 pm, and read prayers. URGENCY MOTIONS — STANDING ORDER 72 Statement by President THE PRESIDENT (Hon Barry House): Further to my statement yesterday regarding urgency motions, I advise the house that in future all urgency motions must be hand-delivered either to me or, if I am unavailable, to the Clerk on the day the urgency motion is to be debated. Faxed or emailed urgency motions will not be accepted unless they are hand-delivered by the member or the member’s staff. I hope that clarifies the matter for members. MANDURAH-ENTRANCE ROAD PROJECT Statement by Minister for Transport HON SIMON O’BRIEN (South Metropolitan — Minister for Transport) [4.02 pm]: On Friday, 4 September, works commenced on the $155 million Mandurah-Entrance Road project. This project, which is jointly funded by the state and federal governments, involves the construction of around 6.7 kilometres of four- lane dual carriageway, providing a safe and efficient road link between Mandurah and the Kwinana Freeway extension, which itself will open later this month. At the peak of construction, the project will employ up to 200 people, creating employment opportunities and stimulating commercial activity in the area through the supply of goods and services. Construction of the Mandurah-Entrance Road is being started some 12 months ahead of schedule and will ensure the long-term safety of and access for motorists to and from Mandurah, one of the fastest growing regions in Australia. In addition to bringing the project forward a year, an earlier proposal to complete only a single lane for much of the route has given way to a determination to fully develop the link from the start. Further to providing a full four- lane dual carriageway, the government will build a 170-metre extension to the existing Mandurah rail tunnel and a new 220-metre rail tunnel. The project will also deliver great benefits for motorists with five kilometres being shaved off the distance travelled between Mandurah and the Kwinana Freeway extension, resulting in a five- minute time saving for motorists. It will provide a safe and efficient link for commuters, as well as better access for residential communities located to the east in Stake Hill. The Mandurah-Entrance Road project is scheduled for completion in 2010. Consideration of the statement made an order of the day for the next sitting, on motion by Hon Ed Dermer. VERVE ENERGY — OATES REPORT Statement by Minister for Energy HON PETER COLLIER (North Metropolitan — Minister for Energy) [4.04 pm]: The long-term security and reliability of electricity supply is a critical issue for the Liberal-National government. We must get the basics right to ensure the lights stay on before we can move Western Australia’s energy sector forward. One of the first major steps we need to take in this direction is to arrest the slide of Verve Energy’s financial performance. In the three full financial years prior to disaggregation, Western Power Corporation achieved a total-profit-before-tax result of almost $1 billion. In the three years post disaggregation, the four combined electricity entities achieved a forecast profit result of $47 million. This is a deterioration of almost $1 billion in profitability. Last year this left us with the reality that a subsidy of $1.5 billion would be required over three years from 2009-10 to maintain the viability of Verve Energy. The Liberal-National government, on behalf of the taxpayers of Western Australia, cannot continue to subsidise Verve’s losses. Ensuring Verve Energy is a vibrant operator that is in a strong financial position is essential for the long-term economic growth of WA. Although non-cost-reflective tariffs have contributed significantly to Verve’s financial position, the design of the market and current vesting contract arrangements have also had a significant negative impact on Verve’s performance. However, it is not acceptable to simply increase tariffs to resolve Verve’s financial position. The underlying causes of the utility’s financial performance must be addressed. Earlier this year, I appointed Mr Peter Oates to undertake a review of Verve’s financial position and performance, and to present options to address these issues. Today I table a report of Mr Oates’ review, a copy of which is also available on the Office of Energy website. The review identified a number of key factors driving the need for change, including — problems with the wholesale electricity market design that impact reliability, competition, cost efficiency and investment; 6550 [COUNCIL - Wednesday, 9 September 2009] the existence of excess capacity in the market, which has stranded some of Verve Energy’s most efficient baseload plant; and the complexity of the vesting contract and the impaired capacity of Verve Energy to manage its financial position, given the lack of visibility and control that it has over its revenue under the vesting contract. One of the options presented to address these problems was in relation to the structure of Verve Energy and Synergy, including merging the two entities or retaining the existing structure. After consideration of both Mr Oates’ review and the views expressed by stakeholders in the energy sector, I recently announced that the Liberal-National government would not remerge Verve and Synergy. However, significant changes to the market rules and vesting contract will be required. The report outlines a number of recommendations related to the need to address market design issues, improve reliability arrangements and amend the vesting contract arrangements. Implementing the review’s recommendations will go a long way to improving Verve Energy’s financial position, while also increasing the use of state-owned generation assets and ensuring market arrangements support reliability, competition and cost efficiency. Recommendations of the review will be implemented by Mr Oates, the Office of Energy and the Independent Market Operator. During the implementation phase, there will be significant consultation with industry stakeholders through the market rule amendment process. As the Minister for Energy, I have to ensure that we take corrective measures to deliver secure, efficient and reliable electricity supply. It is essential that we get the fundamentals of the electricity system right so that we can establish the foundations for a cleaner, smarter and more efficient energy system. It is our responsibility as a government to deliver a reliable electricity supply going forward, and to protect the interests of consumers and the future economic development of Western Australia. The Liberal-National government believes that implementing the necessary changes identified by the Oates’ review is a significant element to achieving this important objective. Consideration of the statement made an order of the day for the next sitting, on motion by Hon Ed Dermer. [See paper 1118.] METROPOLITAN REGION SCHEME AMENDMENT 1160/41 — HELENA VALLEY Statement by Minister for Child Protection HON ROBYN McSWEENEY (South West — Minister for Child Protection) [4.08 pm]: I present today for tabling “Metropolitan Region Scheme Amendment 1160/41”, which will facilitate the residential development of approximately 29.65 hectares of land in Helena Valley. The MRS amendment is consistent with the approved foothills structure plan, which sets out strategic planning for the broader area, and this amendment is now implementing the recommendations of this plan. The structure plan designates the subject land for future urban purposes and is the final area of land designed for urban use in the eastern portion of Helena Valley. The subject land is relatively unconstrained for the movement of the development front. The proposed amendment consolidates, rather than extends, the existing urban front in this locality. The amendment area is well located in relation to the Midland regional centre, Perth Airport and the Hazelmere and Welshpool industrial areas. Furthermore, this amendment will assist with land and housing availability in the foothills area with approximately 220 lots ranging in size from 270 square metres to 1 000 square metres. An important component of this amendment is that it defines the boundary between the urban zone and the Helena River foreshore. There is currently no foreshore reserve or public access to this section of Helena River. Lots 212, 213 and 214 have unrestricted access to Helena River. The setback to the Helena River foreshore has been carefully determined in consultation with the Shire of Mundaring, the Department of Environment and Conservation and the Department of Planning. It is proposed that the foreshore reserve retain significant remnant vegetation and topographical features. It is envisaged that the foreshore reserve will become publicly accessible. The Helena River foreshore is to be reserved as a parks and recreation area in a future metropolitan region scheme amendment. This will provide for a continuous foreshore reserve along Helena River, providing a connection from the Kalamunda National Park to the Swan River. In accordance with the statutory provisions for region scheme amendments, this amendment was advertised for three months between 2008 and 2009. Thirteen submissions were received in total. Two submissions contained comments of support, three submissions contained comments of objection, and eight submissions contained general comments. As a result of submissions and hearings, minor modifications were made to the amendment. The Western Australian Planning Commission considered that readvertising of the amendment was not necessary given the minor nature of the changes. I am pleased to now table the documentation for metropolitan region scheme amendment 1160/41. I commend it to the house. [COUNCIL - Wednesday, 9 September 2009] 6551 [See papers 1119, 1120A and 1120B.] Consideration of the statement made an order of the day for the next sitting, on motion by Hon Ed Dermer. PAPERS TABLED Papers were tabled and ordered to lie upon the table of the house.
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