Wednesday, 15 October 2025

 Bev McARTHUR (Western Victoria) (18:44): (2001) My adjournment matter is for the Minister for Energy and Resources. Minister, regional Victoria is once again being asked to foot the bill for Melbourne’s energy needs. This time it is through the government’s proposed payment in lieu of rates, or PILOR, scheme for energy storage systems. Under this plan, energy companies developing battery storage projects, which overwhelmingly serve Melbourne’s grid, will be allowed to pay a token amount to rural councils instead of proper rates based on capital improved value (CIV). For a 100-megawatt battery, the difference is staggering. Instead of contributing $500,000 to $800,000 a year, the fair amount under normal rating, they will pay just $25,000. That is a revenue loss of up to three-quarters of a million dollars per project. Who makes up the shortfall? Rural ratepayers – local families, farmers and small businesses – who already carry higher infrastructure costs, lower economies of scale and ever-tightening rate caps. This scheme would strip millions from regional councils – Moorabool, Ararat, Pyrenees and beyond – forcing higher rates, deferred road maintenance and reduced services for communities that already host the infrastructure that powers the city. Let us be honest, these batteries do not exist primarily to keep the lights on in Ballan or Beaufort; they exist to stabilise Melbourne’s grid. Yet the cost burden is shifted to country ratepayers, a textbook case of Labor’s Melbourne-first mentality.

This is a simple matter of fairness. Councils are at breaking point. They have faced population growth of 35 per cent since 2014, construction cost increases of 15 to 20 per cent and waste costs that are up more than 30 per cent since 2020, all while suffering endless cost shifting from the state government and revenue restricted by rate caps. Now this government wants to extend the same broken PILOR model used for wind farms, which already pay barely 38 per cent of fair rates, to energy storage projects as well. These projects already pay a fraction of the fire services levy rates – now this. Regional Victoria cannot keep subsidising the city’s energy transition. This policy is inequitable, unsustainable and unjust.

Minister, the action I seek is this: will you scrap the proposed PILOR scheme for energy storage systems and instead mandate a fair, transparent model requiring developers to pay at least 80 per cent of standard CIV-based rates, indexed annually, so that regional ratepayers no longer subsidise metropolitan energy projects?