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ENERGY LEGISLATION AMENDMENT (FLEXIBLE PRICING AND OTHER MATTERS) BILL 2012

     Energy Legislation Amendment
   (Flexible Pricing and Other Matters)
                  Bill 2012

                         Introduction Print


               EXPLANATORY MEMORANDUM


                                  General
The Bill will amend the Electricity Industry Act 2000 to facilitate
implementation of consumer protections required for the introduction of
flexible electricity tariff pricing. The Bill will also amend the National
Electricity (Victoria) Act 2005 to enable modification to provisions of the
National Electricity Rules, to ensure consistency with Victoria's advanced
metering infrastructure regime.
The Bill will amend the National Electricity (Victoria) Act 2005 and the
National Gas (Victoria) Act 2008 to clarify the scope of the enforcement
responsibilities of the Essential Services Commission of Victoria with respect
to electricity and gas regulation.
The Bill will repeal cross-ownership restrictions in the Electricity Industry
Act 2000 and Gas Industry Act 2001.
The Bill will also amend the National Gas (Victoria) Act 2008 to provide
for the declaration of gas distribution and transmission systems for the
purposes of the wholesale gas market.

                               Clause Notes

                       PART 1--PRELIMINARY
Clause 1    states the main purposes of the Bill.

Clause 2    provides for the commencement of the Bill. The Act will come
            into operation on a day or days to be proclaimed. The default
            commencement date for the Act is 1 December 2013.


571313                                 1     BILL LA INTRODUCTION 12/12/2012

 


 

PART 2--AMENDMENT OF ELECTRICITY INDUSTRY ACT 2000 Division 1--Repeal of separation of generation, transmission and distribution restrictions Clause 3 repeals section 24 of the Electricity Industry Act 2000, and is consequential to the repeal of Part 3 of the Electricity Industry Act 2000 under clause 4. Clause 4 repeals Part 3 of the Electricity Industry Act 2000, which relates to the separation of generation, transmission and distributor sectors. The effect of this provision is the removal of restrictions on cross ownership in the electricity sector. The provisions of the Competition and Consumer Act 2012 of the Commonwealth (formerly the Trade Practices Act 1974) will still apply to any proposals for vertical integration of production and distribution infrastructure. Division 2--Advanced metering infrastructure amendments Clause 5 repeals definitions in, and inserts new definitions into, section 46B of the Electricity Industry Act 2000 with respect to advanced metering infrastructure (AMI) requirements. The definitions being repealed are exempted retailer and relevant licensee. The new definitions being inserted are exempt seller and relevant entity. Clause 6 substitutes section 46C and inserts new section 46CA into the Electricity Industry Act 2000. These sections provide that it is a deemed licence or exemption condition requirement that a relevant entity comply with AMI Orders made under section 46D of the Electricity Industry Act 2000. Clause 7 substitutes section 46D of the Electricity Industry Act 2000. The new section re-enacts the power for the Governor in Council to make an Order relating to AMI, retains the current heads of power and includes several new heads of power to ensure Orders made under section 46D can provide appropriate consumer protections for smart meter customers. The heads of power make provision for matters such as choice of tariff structure and access to electricity usage data. 2

 


 

Clause 8 makes a consequential amendment to section 46DA of the Electricity Industry Act 2000 with respect to AMI requirements. Clause 9 inserts new Part 8 into the Electricity Industry Act 2000 which includes a savings and transitional provision consequential to the amendments made to Division 6A of Part 2 of the Electricity Industry Act 2000. That provision (new section 120) deems a reference to a relevant licensee in AMI Orders to be a reference to a relevant entity. PART 3--AMENDMENT OF GAS INDUSTRY ACT 2001 Clause 10 repeals Part 6 of the Gas Industry Act 2001, which relates to prohibited interests. The effect of this Part is the removal of restrictions on cross ownership in the gas sector. The provisions of the Competition and Consumer Act 2012 of the Commonwealth (formerly the Trade Practices Act 1974) will still apply to any proposals for vertical integration of production and distribution infrastructure. PART 4--AMENDMENT OF NATIONAL ELECTRICITY (VICTORIA) ACT 2005 Clause 11 inserts a new Division 2A heading of "Feed-in tariff modifications" in the National Electricity (Victoria) Act 2005. This amendment is consequential to clauses 12 and 13. Clause 12 inserts a new Division 2B heading of "Metering" in the National Electricity (Victoria) Act 2005. Clause 13 inserts a new section 16BA into the National Electricity (Victoria) Act 2005. The new section will enable modification, by Ministerial Order, of the operation in Victoria of Chapter 7 of the National Electricity Rules (related to metering) and clause 6.18 of the National Electricity Rules (related to pricing proposals) to ensure consistency with Victoria's advanced metering regime. Clause 14 inserts a new definition of ESC enforceable regulatory requirement into section 17 of the National Electricity (Victoria) Act 2005. This amendment is consequential to clause 15. 3

 


 

Clause 15 inserts new section 22A into the National Electricity (Victoria) Act 2005. The new section will enable a Ministerial Order to specify relevant regulatory laws or instruments, or provisions thereof, as the enforcement responsibility of the Essential Services Commission and not the responsibility of the Australian Energy Regulator. Clause 16 amends section 23(3) of the National Electricity (Victoria) Act 2005, to make clear that references in relevant regulatory laws or instruments, or specified licence conditions, codes or guidelines, to the Essential Services Commission are references to either the Commission or the Australian Energy Regulator, as the case requires. Clause 17 amends section 24 of the National Electricity (Victoria) Act 2005, to provide that the Essential Services Commission has every function or power under relevant regulatory laws or instruments, or specified licence conditions, codes or guidelines, required for the Commission to perform enforcement related functions under the Essential Services Commission Act 2001. This is despite the Australian Energy Regulator having functions and powers under these instruments in its role as economic regulator. Clause 18 amends section 26 of the National Electricity (Victoria) Act 2005, to enable the Essential Services Commission to serve a provisional order or a final order under section 53 of the Essential Services Commission Act 2001, in relation to a failure by an electricity distributor to comply with an ESC enforceable regulatory requirement determined under new section 22A. Clause 19 inserts new section 28A into the National Electricity (Victoria) Act 2005. The new section enables the Australian Energy Regulator to provide information to the Essential Services Commission in relation to the enforcement of regulatory obligations. PART 5--AMENDMENT OF NATIONAL GAS (VICTORIA) ACT 2008 Clause 20 inserts a new definition of ESC enforceable regulatory requirement into section 17 of the National Gas (Victoria) Act 2008. This amendment is consequential to clause 21. 4

 


 

Clause 21 inserts new section 20A into the National Gas (Victoria) Act 2008. The new section will enable a Ministerial Order to specify a relevant gas distribution system law or instrument, or a provision thereof, as the enforcement responsibility of the Essential Services Commission and not the responsibility of the Australian Energy Regulator. Clause 22 amends section 28(3) of the National Gas (Victoria) Act 2008, to make clear that references in relevant gas distribution system laws or instruments, or relevant distribution licence conditions, to the Essential Services Commission are references to either the Commission or the Australian Energy Regulator, as the case requires. Clause 23 amends section 29 of the National Gas (Victoria) Act 2008, to provide that the Essential Services Commission has every function or power under relevant gas distribution system laws or instruments, or relevant distribution licence conditions, required for the Commission to perform enforcement related functions under the Essential Services Commission Act 2001. This is despite the Australian Energy Regulator having functions and powers under these instruments in its role as economic regulator. Clause 24 amends section 31 of the National Gas (Victoria) Act 2008, to enable the Essential Services Commission to serve a provisional order or a final order under section 53 of the Essential Services Commission Act 2001, in relation to a failure by a gas distribution company to comply with an ESC enforceable regulatory requirement determined under new section 20A. Clause 25 inserts new section 34A into the National Gas (Victoria) Act 2008. The new section enables the Australian Energy Regulator to provide information to the Essential Services Commission in relation to the enforcement of regulatory obligations. Clause 26 inserts new section 39(2) into the National Gas (Victoria) Act 2008. The new section will allow a declaration of a distribution system or transmission system to relate to a specified provision of the National Gas (Victoria) Law. This will enable declarations to be made for different purposes depending on whether a distribution system or transmission system is or is not part of the wholesale gas market. 5

 


 

Clause 27 amends section 45 of the National Gas (Victoria) Act 2008 to ensure that terms are defined under that section for the purposes of the National Gas Rules as well as the National Gas (Victoria) Law. PART 6--REPEAL OF AMENDING ACT Clause 28 provides for repeal of the Act on 1 December 2014. The repeal of the Act does not affect the continuing operation of the amendments made by the Act (see section 15(1) of the Interpretation of Legislation Act 1984). 6

 


 

 


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