Northern Territory Explanatory Statements Northern Territory Explanatory Statements[Index] [Search] [Download] [Bill] [Help]
2017
LEGISLATIVE
ASSEMBLY OF THE
NORTHERN
TERRITORY
TREASURER
NATIONAL
ELECTRICITY (NORTHERN TERRITORY) (NATIONAL UNIFORM LEGISLATION) AMENDMENT BILL
2017
SERIAL NO.
23
EXPLANATORY STATEMENT
GENERAL
OUTLINE
The purpose of the legislation
is to amend the National Electricity (Northern Territory) (National Uniform
Legislation) Act to ensure the National Electricity Law continues to be
legally and practically applied in the Northern Territory in a manner that is
fit-for-purpose and reflects policy decisions made as part of the
Territory’s progressive adoption of the National Electricity Rules.
The National Electricity Law, Rules and
Regulations form part of a co-operative scheme for the regulation of electricity
networks in the National Electricity Market (of which electricity systems in all
jurisdictions except for the Territory and Western Australia form a part). The
lead legislation is the National Electricity (South Australia) Act 1996
(SA).
NOTES ON
CLAUSES
Clause 1. Short
Title
This is a formal clause which provides
for the citation of the Act. The Bill when passed may be cited as the
National Electricity (Northern Territory) (National Uniform
Legislation) Amendment Act 2017.
Clause
2. Commencement
This clause provides for the
commencement of the Act.
The Act commences on 1
July 2017.
Clause 3. Act
amended
This clause provides that this Act amends the
National Electricity (Northern Territory) (National Uniform
Legislation) Act.
Clause 4. Section 3
amended
This clause inserts into section 3(1) a
new definition of SA Act which means the National Electricity (South
Australia) Act 1996 (SA).
Clause
5. Section 6 amended
This clause omits from
section 6 the words from ‘National Electricity (South Australia) Act
1996 (SA)’ and replaces them with ‘SA Act’.
Clause 6. Section 7
amended
This clause omits from section 7 the
words from ‘National Electricity (South Australia) Act 1996
(SA)’ and replaces them with ‘SA Act’.
Clause 7. Section 8
amended
This clause omits from the definition
of the National Electricity Law or this Law in section 8(1)(b) the
words ‘indicates or requires – the National Electricity Law set out
in the Schedule to the National Electricity (South Australia) Act 1996
(SA)’ and replaces them with ‘or subject matter otherwise indicates
or requires – the National Electricity Law set out in the Schedule to the
SA Act’, so that the definition will provide that National Electricity
Law or this Law means:
• the National Electricity (NT Law); or
• if the context or subject matter otherwise
indicates or requires – the National Electricity Law set out in the
Schedule to the SA Act.
This amendment will
ensure consistency in the drafting approach. However, it will not reflect a
change in policy or a change in the effect of this definition in the National
Electricity Law.
Clause 8. Section 9
amended
This clause omits section 9 and
replaces it with a new section 9.
The new
section 9 replaces references to ‘local distribution systems’ and
‘distribution systems’ with references to ‘local electricity
systems’ and ‘electricity
systems’.
This amendment reflects that
some network assets that perform a transmission function will be treated as
such, for some purposes under the National Electricity
Rules.
This amendment is consistent with
amendments to Schedule 2(1) which, for example, replaces the definition of
local distribution systems with local electricity
system.
Clause 9. Section 9A
amended
This clause omits from the definition
of the National Electricity Rules in section 9A(3) the words
‘National Electricity (South Australia) Act 1996 (SA)’ and
replaces them with ‘SA Act’.
Clause 10. Section 12A
amended
This clause inserts in Section
12A(2)(b)(i) after ‘the other instrument’ the words ‘or
decision’.
This amendment is necessary
to correct a minor drafting error. However, it will not significantly impact the
effect of section 12A, which ensures that instruments (such as guidelines) and
decisions (such as approvals) made by the Australian Energy Regulator under
provisions of the NT national electricity legislation (as defined in
section 12A) that have yet to commence can, in certain circumstances, be taken
to be valid and effective.
Clause
11. Section 12B amended
This clause omits from
section 12B(2) the word ‘law’ and replaces it with
‘provision’.
This amendment is
necessary to correct a minor drafting error. However, it will not significantly
impact the effect of section 12B, which ensures that if the Australian Energy
Regulator is required to take preparatory steps (such as undertaking
consultation before making an instrument or a decision) under a provision of the
National Electricity (NT) Law, the National Electricity (NT) Regulations, the
National Electricity (NT) Rules, or this Act that has yet to commence, it is
taken to have complied with the requirement to take the preparatory
steps.
Clause 12. Section 13
amended
This clause omits section 13(2) and
replaces it with a new section 13(2).
The new
section 13(2) provides the regulations that may be made by the Administrator
under the Act, may do any of the following:
• amend Schedule 1, including amending it to provide for matters of transitional nature to facilitate the transition to the application and operation of the National Electricity (NT) Law;
• prescribe modifications to the regulations in force from time to time under Part 4 of the SA Act for the purposes of section 7(a), including modifications that provide for matters of a transitional nature to facilitate the transition to the application and operation of those regulations; or
• provide modifications to the operation of the
National Electricity Rules for the purpose of their having the force of law in
this jurisdiction under section 9 of the National Electricity (NT) Law,
including modifications that provide for matters of a transitional nature to
facilitate the transition to the application and operation of those
Rules.
These amendments expressly provide that
modifications to the National Electricity Law, National Electricity Rules, and
National Electricity Regulations made under the National Electricity (Northern
Territory) (National Uniform Legislation) Act can extend to matters of a
transitional nature.
This clause also omits
from the definition of the National Electricity Rules in section 13(5)
the words ‘National Electricity (South Australia) Act 1996
(SA)’ and replaces them with ‘SA Act’.
Clause 13. Part 4, Division 2
repealed
This clause repeals Part 4, Division
2. Division 2 was reserved for transitional provisions to be inserted by
regulations under section 14(1). Section 14 has been repealed. Division 2 of
Part 4 is no longer needed.
Clause
14. Schedule 1 amended
This clause omits
Schedule 1, Parts 2 to 4 and replaces them with new Parts 2 to
4.
The new Parts 2 to 4 are unchanged from the
omitted versions, except for the following
changes.
Part
2
Both the omitted and new Part 2 make
continuing modifications to the National Electricity
Law.
The following amendments are made to
definitions by the new Part 2:
• The definition of distribution system is amended (to revert to original form)
• The definition of local distribution system is omitted, and the term is omitted wherever it appeared and replaced with local electricity system
• The definition of local electricity system is amended to mean:
o an electricity system declared by the application Act of this jurisdiction to be a local electricity system; and
o the generating systems and other facilities owned, controlled or operated in this jurisdiction connected to that electricity system.
• The word ‘distribution’ is omitted from the definitions of distribution determination, distribution reliability standard and distribution service standard and replaces with ‘a local electricity’ (so that these terms refer to ‘a local electricity system’ rather than ‘a distribution system’).
• The words ‘distribution system’ is
omitted from the definition of regulated distribution system operator and
replaced with ‘local electricity
system’.
These amendments reflect that
some network assets that perform a transmission function will be treated as
such, for some purposes under the National Electricity Rules.
• The definition of Territory electricity market is omitted
• A definition of local instrument is inserted, which means:
o a regulation made under the application Act of this jurisdiction
• The definition of network service provider is amended to mean:
o a Registered participant who:
§ under section 11 (3aa) is deemed to be registered for the purposes of section 11(2); and
§ owns, controls or operates a transmission system or distribution system that forms part of a local electricity system.
• The definition of Registered participant is amended to mean:
o a person who,
under Part 3 of the Electricity Reform Act of the Northern Territory,
holds a licence authorising the carrying on of operations in the electricity
supply industry in connection with a local electricity system, other than a
person who is prescribed by local instrument not to be a Registered participant
in relation to those operations
These
amendments are required to specify requirements in relation to registration of
participants that reflect arrangements in the Territory relating to the local
electricity systems.
• The definition of Regulations is amended to mean:
o the regulations made under Part 4 of the National Electricity (South Australia) Act 1996 of South Australia that apply as a law of this jurisdiction, as modified by the application Act of this jurisdiction or a regulation made under that Act; or
o if the context
or subject matter otherwise indicates or requires – the regulations made
under Part 4 of the National Electricity (South Australia) Act 1996 of
South Australia
This amendment will ensure
consistency in the drafting approach. However, it will not reflect a change in
policy or a change in the effect of these definitions in the National
Electricity Law.
• The definition of retailer which is amended to mean:
o a person who
under Part 3 of the Electricity Reform Act of the Northern Territory,
holds a licence authorising selling of electricity.
This amendment ensures consistency with the
definition of ‘retailer’ to be included in the National Electricity
(NT) Rules and reflects that the National Energy Customer Framework does not
have effect in the Territory.
• The definition of Utilities Commission inserted, which means:
o the Utilities
Commission of the Northern Territory established by section 5 of the
Utilities Commission Act of the Northern
Territory
This new Part 2 also modifies section
8 of the National Electricity Law by inserting the word ‘of’ between
‘all’ and ‘the’ at 8(2)(2a)(c). This corrects a minor
drafting error.
This new Part 2 further
modifies the following provisions in the National Electricity Law:
• It omits the heading of Part 2, ‘National Electricity Market’ and replaces it with ‘Northern Territory local electricity systems’
• It makes a minor modification to the heading of section 11
• It inserts before section 11(1) a new section (1aa) which provides that subsections (3) and (4) (which require that a person, other than the Australian Energy Market Operator, must not engage in operating a wholesale exchange for electricity in this jurisdiction, and set out registration requirements in relation to purchasing electricity through a wholesale exchange) have no effect in this jurisdiction. A note is included that the application of subsections (3) and (4) may be revisited as part of the phased implementation of the National Electricity Rules in the Northern Territory
• It modifies section 11(1) to require that a person must not engage in the activity of owning, controlling or operating, in this jurisdiction, a generating system connected to a local electricity system unless –
o the person is a Registered participant in relation to that activity and that local electricity system; or
o the person is the subject of a derogation that exempts the person from the requirement to be a Registered participant in relation to that activity and that local electricity system under this Law and the Rules; or
o the person is prescribed by local instrument not to be a Registered participant in relation to that activity and that local electricity system
• It makes a change to the modification made to section 11(2) to require that a person must not must not engage in the activity of owning controlling or operating, in this jurisdiction, a transmission system or distribution system that forms part of a local electricity system unless –
o the person is a Registered participant in relation to that activity and that local electricity system; or
o the person is the subject of a derogation that exempts the person, or is otherwise exempted by the Australian Energy Regulator, from the requirement to be a Registered participant in relation to that activity and that local electricity system under this Law and the Rules; or
o the person is prescribed by local instrument not to be a Registered participant in relation to that activity and that local electricity system
• It also inserts a new subsection (3aa) after section 11(2) which states that a Registered participant who holds a licence authorising the carrying on of operations that correspond to any activity and a local electricity system mentioned in subsection (1) or (2) is deemed to be a Registered participant in relation to that activity and that local electricity system for the purposes of that subsection or those subsections, as the case requires
• It inserts new subsections 12(1aa), 13(1aa) and
14(1aa) before subsections 12(1), 13(1) and 14(1), to provide that sections 12,
13 and 14 have no effect. These sections relate to registration and exemptions
in the national electricity market. A note is included in each instance that the
application of these sections may be revisited as part of the phased
implementation of the National Electricity Rules in the Northern
Territory
The new Part 2 omits a change made by
the previous Part 2, which provided that Part 5 of the National Electricity Law
had no effect in this jurisdiction. Part 5 now will have effect, subject to
certain modifications.
The new Part 2 modifies
section 49 of the National Electricity Law (within Part 5), to insert a new
subsection (1aa), which provides that:
• certain of AEMO’s statutory functions (which are not relevant to the Territory’s circumstances) have no effect in the Territory: specifically, the functions at paragraphs 49(1)(a)-(f)
• the notes at subsection (1) have no effect in the Territory
• the functions that AEMO has as National
Transmission Planner (subsection 49(2)) have no effect in the
Territory
This new Part 2 also inserts, after
the heading to Part 5, Division 5 of the National Electricity Law, a new
section 53AA which provides that Division 5 has no effect. Division 5
relates to the Australian Energy Market Operator’s information gathering
powers.
This new Part 2 also modifies section
54C of the National Electricity Law to authorise disclosure of protected
information to the Utilities Commission.
This
new Part 2 inserts after the heading to Part 5, Division 7 of the National
Electricity Law, a new section 55AA which provides that Division 7 has no
effect. Division 7 relates to the Australian Energy Market Operator’s
statutory funds.
The above amendments are
required to specify requirements in relation to registration of participants
that reflect arrangements in the Territory’s local electricity systems.
They reflect that the Australian Energy Market Operator, which performs a
registration role in the interconnected national electricity system, will have a
very limited role in the Territory, and will not have a registration or any
operational role in the Territory’s local electricity systems.
This new Part 2 also modifies section 88 of
the National Electricity Law by inserting the word ‘of’ between
‘all’ and ‘the’ at 88(2)(2a)(c). This corrects a minor
drafting error.
This new Part 2 inserts after
the Part 8 heading of the National Electricity Law, a new section 109AA
which provides that Part 8 has no effect. Part 8 relates to the safety and
security of the National Electricity System, and is not relevant to the
Territory’s local electricity system. This amendment involves renumbering
a provision that was already included to this effect by the previous Part 2.
(Section 108B is renumbered as section 109AA, to comply with current drafting
practice.)
This new Part 2 modifies section 122
of the National Electricity Law, by inserting before subsection 122(1) a new
subsection 122(1aa) that provides that section 122 has no effect. Section 122
relates to immunity from personal liability of the Reliability Panel but is not
required in the Territory as the Reliability Panel will not have a role in the
Territory.
This new Part 2 inserts, after the
heading to Part 10, Division 1 of the National Electricity Law, a new
section 123AA which provides that Part 10 has no effect. Part 10 relates
access disputes. A note is included that the application of this Part may be
revisited as part of the phased implementation of the National Electricity Rules
in the Territory. Previously, a modification was made under Part 3 to the effect
that Part 10 would have no effect in this jurisdiction until 1 July
2019.
This new Part 2 inserts a new Part 1AA
into Schedule 3 that provides that Parts 1 to 12 of Schedule 3 will have no
effect in the Territory, on the basis that none of the Parts (including Part 12)
are relevant to the Territory’s
circumstances.
Part
3
Both the omitted and new Part 3 make
modifications that will expire on
1 July 2019.
The new Part 3 omits
amendments, which had been included by the previous Part 3, to the definition of
regulated distribution system operator in section 2(1) of the National
Electricity Rules.
The new Part 3 also omits an
amendment made to Part 10, to provide that the Part has no effect in this
jurisdiction. A change is made to this effect by Part 2, on an ongoing basis, by
the inclusion of new section 123AA (see
above).
Part
4
Both the omitted and new Part 4, make
modifications that will expire on application of the National Energy Retail
Law.
The new Part 4 omits the words ‘,
and includes a retail customer’ from the modifications previously made to
the definition of end user in section 2(1) of the National Electricity
Law by the omitted Part 4. This amendment effectively allows for the definition
of end user to revert to its original form.
The new Part 4 omits section 2A which had been
included by the omitted Part 4, and defined an access dispute. This section has
been repealed as dispute arrangements under the National Electricity Law and the
National Electricity Rules are to be considered holistically as part of the
Territory’s progressive adoption of the National Electricity
Rules.
The new Part 4 omits the repeal of
section 6A, effected by the previous Part 4, and inserts before section 6A(1) a
new section (1aa) which provides that section 6A has no effect in the Territory
until the National Energy Retail Law is applied as a law of the Territory. This
amendment will ensure consistency in the drafting approach. However, it will
not reflect a change in policy or a change in the practical effect of this
section of the National Electricity Law.
The
new Part 4 inserts before section 10A(1) a new section (1aa) which provides that
section 10A has no effect in the Territory until the National Energy Retail Law
is applied as a law of the Territory.
Clause
15. Schedule 2 amended
Clause 15 amends
Schedule 2. It omits from the Schedule 2 heading, and the headings of items 1 to
4, the word ‘distribution’ and replaces it with
‘electricity’. In items 1 to 4, it also omits the words
‘distribution system’ and replaces them with the words
‘electricity system (being the apparatus, electricity lines, equipment,
plan and buildings used to convey or control the conveyance of
electricity)’.
These amendments reflect
that some network assets that perform a transmission function will be treated as
such, for some purposes under the National Electricity Rules, and as such,
transmission systems may be prescribed as local electricity systems in the
Territory, as well as distribution
systems.
Clause 16. Expiry of
Act
This clause provides that the Act expires
on the day after it commences.