Electricity Trust of South Australia

The Electricity Trust of South Australia (ETSA) was the South Australian Government-owned monopoly vertically integrated electricity provider. Its controversial privatisation in 1999 was one of the most important political events in recent South Australian history.

Establishment of ETSA

The Electricity Trust of South Australia (ETSA) was created by South Australian Liberal and Country League (LCL) premier Tom Playford through the nationalisation of the Adelaide Electric Supply Company (AESC) in 1946. The Adelaide Electricity Supply Company was established in 1897. It was a private company (with headquarters in London), which held a monopoly over electricity supplies in Adelaide at the time. It was the company's refusal to use brown coal as advocated by Playford, even going to the extent of buying only boilers that used only black coal, that triggered the request from Playford for commonwealth funds to nationalise the company: Labor Prime Minister Ben Chifley readily agreed. The LCL suffered a split in its ranks with regard to nationalisation, and the state legislation passed only with the support of ALP and independent members of parliament.^[1]

Contribution to South Australia's post-war growth

ETSA participated in the post-war growth and industrialisation of the South Australian economy, including providing modern and reliable power for regional areas.

As a vertically integrated generator, distributor and retailer of electricity, ETSA was responsible for the development of new energy sources (brown coal mined at Leigh Creek), major power stations near Port Augusta (Playford B and Northern) and on Torrens Island. ETSA expanded the electricity distribution network to areas where there was previously no supply, or only low voltage (32 volt) supply generated locally. By the end of the Playford era, South Australia had one of the cheapest and most efficient electricity networks in the world. The same low price for electricity was charged in Mount Gambier as it was at the point of production at Torrens Island.

Controversies

Privatized ETSA has been a part of several notable controversies, including power outages, and electromagnetic radiation.

Power outages

ETSA has been criticized for its consistent power outages in the past.^[2] However, more recently ETSA has consistently met and often exceeded its requirements for service interruption duration and frequency.^[3][4]

Privatisation

After the State Bank collapse in the early 1990s the State was left with a large debt after fulfilling its obligation to bail out the bank. In the lead up to the 1997 state election, the incumbent Olsen Liberal government pledged not to privatise ETSA. However, after being re-elected, the government proceeded with privatisation plans citing the dire financial situation of the State, and claiming to be confronted with new information such as a warning from the State Auditor General and the introduction of the Australian National Electricity Market.

Following the 1997 state election, the Olsen Liberal government required the support of an additional two non-Liberal upper house members in order to pass legislation, with the Australian Democrats retaining the balance of power on three seats. However, defectors from Labor in the upper house, Terry Cameron and Trevor Crothers, brought independent member Nick Xenophon in to play. In 1998, Xenophon voted with Cameron and the government to proceed with the second reading of the ETSA power sale bill.^[5][6] The bill became law when Cameron and Crothers voted with the Liberal government. They subsequently resigned from the Australian Labor Party.^[7]

The privatisation involved the disaggregation of the vertically integrated business, with the generation, transmission, distribution and retail assets taken up by distinct investors. However, the South Australian Government retained freehold ownership of the generation, transmission and distribution assets, with the investors acquiring long term leasehold interests in the assets. Also, the Government introduced a regime of industry regulation, calculated to ensure that the public interest was protected and that safety standards are maintained.

The purchaser of the distribution business took the name "ETSA Utilities", while the acquirors of the other parts of the business adopted distinct identities for their businesses.

With privatisation came the establishment of a competitive retail market for electricity. The retailing component of ETSA was acquired by AGL. With the advent of competition, other electricity retailers entered the marketplace, offering consumers choice- competition focussing on tariffs and discounts for "bundling" of gas and electricity supply from one retailer.

Although the State's fiscal situation was substantially improved with funds derived from the sell-off, debate continued as to whether ETSA's privatisation has been to the benefit of the South Australian community. It was estimated that with higher electricity prices, the net loss from ETSA would total between $2 and 3 billion over a ten-year period.^[8]

Following the de-regulation of the State's electricity market from 1 January 2003, AGL's electricity prices increased by an average 23.7%. This has been a political sorepoint for both the Labor and Liberal Parties in South Australia: with the Liberals having enacted privatisation, then the Rann government approving the price increases.

However, by 2006, with a number of competing electricity retailers now in the market, many South Australian households have negotiated electricity contracts delivering reductions in price of up to 15% and substantially larger price reductions negotiated by businesses, however these still well-exceed the pre-sale supply price.

Electromagnetic radiation

ETSA (and many other electricity generation, transmission and distribution entities) undertake Live-line or other maintenance tasks in close proximity to in-service electricity infrastructure. This is done to improve plant availability and avoid customers outages. However, this work methodology does come with additional worker risks including inadvertent contact to live parts and exposure to high electric and magnetic fields. The International Commission on Non-Ionizing Radiation Protection (ICNIRP) set safe limits to avoid excessive occupational exposure and public exposure.

See also

• Electricity Supply Industry Planning Council
• Essential Services Commission of South Australia
• SA Power Networks

References