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Energy Legislation Further Amendment
Bill 2007
Introduction Print
EXPLANATORY MEMORANDUM
General
The Bill will amend the Electricity Industry Act 2000 and the Gas
Industry Act 2001 to improve the supplier of last resort arrangements,
extend the operation of the existing gas and electricity industry customer
safety net provisions until the end of 2008 and reduce the publication
requirement for retail safety net tariffs from 2 months to 1 month.
The Bill makes other amendments to the Electricity Industry Act 2000 to
repeal Victorian Energy Networks Corporation's (VENCorp's) electricity
demand management function.
The Bill makes other amendments to the Gas Industry Act 2001 to provide
for the approval of VENCorp's charges for services it provides to participants
in the market regulated under the Market and System Operation Rules (MSO
Rules) and repeal provisions and references relating to the Port Campbell
underground storage facility.
The Bill also amends the Gas Pipelines Access (Victoria) Act 1998 to
clarify that VENCorp is not a service provider under the national gas
pipelines access regime as the operator of the Victorian gas transmission
system.
The Bill also amends the Gas and Fuel Corporation (Heatane Gas) Act
1993 to clarify the effect of an Order made in 1994 under section 11 of that
Act relating to the transfer of the ownership of the heatane gas pipeline.
Clause Notes
PART 1--PRELIMINARY
Clause 1 sets out the purpose of the Bill.
Clause 2 is the commencement provision. Except for sections 23, 25(1),
26 and 33, the Act will come into operation the day after it
receives the Royal Assent.
561087 1 BILL LA INTRODUCTION 18/9/2007
Sections 23, 25(1), 26 and 33 will, subject to earlier
proclamation, come into operation on 1 January 2010.
Section 26 will be proclaimed once the MSO Rules are amended
to provide for the approval (or determination) of VENCorp's
charges for services it provides to participants in the market
regulated by those Rules. Sections 23, 25(1) and 33 will be
proclaimed once the Australian Energy Regulator is conferred
power, under the Trade Practices Act 1974 of the
Commonwealth, to approve VENCorp's charges for services it
provides to participants in the market regulated by the MSO
Rules.
PART 2--AMENDMENT OF ELECTRICITY INDUSTRY
ACT 2000
Division 1--Supplier of last resort amendments
Clause 3 inserts into Part 2 of the Electricity Industry Act 2000 a new
Division 8 providing for supplier of last resort arrangements.
New Division 8 for the most part represents a re-enactment of
the existing section 27 of the Electricity Industry Act 2000.
However, it also contains new provisions principally related to
the transfer of customer information following the disorderly
trading exit of a licensee that supplied or sold electricity.
More particularly, Division 8 comprises the following sections--
· Section 49A sets out definitions used in the Bill,
including--
· defaulting licensee means a licensee that
supplied or sold electricity to a relevant customer
prior to a trigger event;
· relevant customer information means
information in respect of a relevant customer
including name and contact details, billing
address, supply address, national metering
identifier of the metering installation at the point
at which the customer is supplied electricity, past
consumption levels and any arrangements for
continuous supply of electricity;
· supplier of last resort means, following a trigger
event, the licensee obliged to supply or sell
electricity to a relevant customer;
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· trigger event is either of the following events:
where the defaulting licensee's licence is revoked
or the right of that licensee to acquire electricity
from the wholesale electricity market is
suspended or terminated.
· Section 49B defines related relevant customer
information as information that the Essential Services
Commission considers a supplier of last resort requires
to perform its obligation to supply or sell electricity to
relevant customers of a defaulting licensee.
· Section 49C provides that the Governor in Council may
make an Order to declare a relevant customer or class of
customers.
· Section 49D provides that conditions of a licence to
distribute or supply electricity may include a
requirement that the licensee, on terms and conditions
approved by the Essential Services Commission, supply
and sell electricity to relevant customers.
· Section 49E provides for the submission by a supplier
of last resort and approval or specification by the
Essential Services Commission of terms and conditions
to supply and sell electricity to relevant customers to
whom electricity was supplied or sold under another
licence.
· Section 49F provides for the variation of terms and
conditions approved or specified by the Essential
Services Commission under section 49E.
· Section 49G provides that following a trigger event, a
supplier of last resort or the Essential Services
Commission may by written notice request a defaulting
licensee or its insolvency official to provide
information. A supplier of last resort may request
relevant customer information which is defined under
section 49A to include name and contact details, billing
address and supply address. The Essential Services
Commission may request relevant customer information
and related relevant customer information (as defined in
new section 49B).
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· Section 49H provides that a defaulting licensee or its
insolvency official must comply with a written notice
issued under section 49G.
· Section 49I requires the Essential Services Commission
to give information it receives under a written notice
under section 49G to the supplier of last resort.
· Section 49J provides that if the written notice issued
under section 49G is not complied with, the Essential
Services Commission or a supplier of last resort may
apply to the Supreme Court for a declaration that there
has been non-compliance and an order requiring
compliance.
· Section 49K provides that Division 8 is declared to be a
Corporations Act displacement provision for the
purposes of section 5G of the Corporations Act in
relation to the provisions of Chapter 5 of that Act.
Clause 4 repeals section 27 of the Electricity Industry Act 2000 which is
replaced by new Division 8.
Division 2--Customer safety net amendments
Clause 5 amends section 13(7) of the Electricity Industry Act 2000 to
extend the expiry date of section 13 from 31 December 2007 to
31 December 2008. Section 13 grants to the Governor in Council
power to make an Order regulating tariffs for the supply of
electricity to a prescribed customer or class of prescribed
customers.
Clause 6 amends section 23(4) of the Electricity Industry Act 2000 to
extend the expiry date of section 23 from 31 December 2007 to
31 December 2008. Section 23 grants to the Governor in Council
power to make an Order restricting the sale of electricity to
certain customers. This section enables the ongoing regulation of
unmetered electricity supplies.
Clause 7 amends section 35(9) of the Electricity Industry Act 2000 to
extend the expiry date of section 35 from 31 December 2007 to
31 December 2008. Section 35 requires electricity retailers to
offer to supply electricity to domestic and small business
customers at tariffs, and on terms and conditions, published in
the Government Gazette.
4
Clause 8 amends section 36(7) of the Electricity Industry Act 2000 to
extend the expiry date of section 36 from 31 December 2007 to
31 December 2008. Section 36 empowers the Essential Services
Commission to issue terms and conditions relating to the sale of
electricity. Offers made by electricity retailers under section 35
are void to the extent they are inconsistent with these terms and
conditions.
Clause 9 amends section 36A(6) of the Electricity Industry Act 2000 to
extend the expiry date of section 36A from 31 December 2007 to
31 December 2008. Section 36A requires specified electricity
retailers to publish on their Internet sites, details of their market
tariffs and terms and conditions for electricity supply to small
retail customers, in accordance with guidelines published by the
Essential Services Commission.
Clause 10 amends section 37(3) of the Electricity Industry Act 2000 to
extend the expiry date of section 37 from 31 December 2007 to
31 December 2008. Section 37 deems there to be a contract
between a relevant retailer and former franchise customer of that
retailer, until the contract is terminated or a new contract is
entered into. Section 37 provides that the tariffs and terms and
conditions of the deemed contract will be the same as those
published by the relevant retailer under section 35 of the
Electricity Industry Act 2000.
Clause 11 amends section 39(11) of the Electricity Industry Act 2000 to
extend the expiry date of section 39 from 31 December 2007 to
31 December 2008. Section 39 deems there to be a contract
between a relevant licensee and a relevant customer, where that
customer moves into premises without formally entering into an
electricity supply contract. Section 39 provides that the tariffs
and terms and conditions of the deemed contract will be the same
as those published by the relevant retailer under section 35 of the
Electricity Industry Act 2000.
Division 3--Other amendments
Clause 12 amends section 35(1)(a) and (b) and (3) of the Electricity
Industry Act 2000 to reduce the time retail safety net tariffs take
effect after they are published from 2 months to 1 month.
Section 35 requires electricity retailers to offer to supply
electricity to domestic and small business customers at tariffs,
and on terms and conditions, published in the Government
Gazette.
5
Clause 13 repeals section 79A of the Electricity Industry Act 2000 which
provides VENCorp with powers in relation to the management of
electricity demand.
PART 3--AMENDMENT OF GAS INDUSTRY ACT 2001
Division 1--Supplier of last resort amendments
Clause 14 inserts into Part 3 of the Gas Industry Act 2001 a new
Division 8 providing for supplier of last resort arrangements.
New Division 8 for the most part represents a re-enactment of the
existing section 34 of the Gas Industry Act 2001. However, it
also contains new provisions principally related to the transfer of
customer information following the disorderly trading exit of a
licensee that supplied or sold gas.
More particularly, Division 8 comprises the following sections--
· Section 51A sets out definitions used in the Bill,
including--
· defaulting licensee means a licensee that
supplied or sold gas to a relevant customer prior
to a trigger event;
· relevant customer information means
information in respect of a relevant customer
including name and contact details, billing
address, supply address, meter registration
number of the metering installation at the point at
which the customer is supplied gas, past
consumption levels and any arrangements for
continuous supply of gas;
· supplier of last resort means, following a trigger
event, the licensee obliged to supply or sell gas
to a relevant customer;
· trigger event is either of the following events:
where the defaulting licensee's licence is revoked
or the defaulting licensee has been deregistered
as a market participant under the MSO Rules
after the issue of a notice of suspension by
VENCorp.
6
· Section 51B defines related relevant customer
information as information that the Essential Services
Commission considers a supplier of last resort must
have in order to perform its obligations to supply or sell
gas to relevant customers of a defaulting licensee.
· Section 51C provides that the Governor in Council may
make an Order to declare a relevant customer or class of
customers. Section 51C enables a supplier of last resort
to submit different tariffs, terms and conditions for
different customers or classes of customer that it may
supply or sell gas following a trigger event.
· Section 51D provides that conditions of a licence to
distribute or supply gas may include a requirement that
the licensee, on terms and conditions approved by the
Essential Services Commission, supply and sell gas to
relevant customers to whom gas was supplied or sold
under another licence.
· Section 51E provides for the submission by a supplier
of last resort and approval or specification by the
Essential Services Commission of terms and conditions
to supply and sell gas to relevant customers to whom
gas was supplied or sold under another licence.
· Section 51F provides for the variation of terms and
conditions approved or specified by the Essential
Services Commission under section 51E.
· Section 51G provides that following a trigger event, a
supplier of last resort or the Essential Services
Commission may by written notice request a defaulting
licensee or its insolvency official to provide
information. A supplier of last resort may request
relevant customer information which is defined under
section 51A to include name and contact details, billing
address and supply address. The Essential Services
Commission may request relevant customer information
and related relevant customer information (as defined in
new section 51B).
· Section 51H provides that a defaulting licensee or its
insolvency official must comply with a written notice
issued under section 51G.
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· Section 51I requires the Essential Services Commission
to give information it receives under a written notice
under section 51G to the supplier of last resort.
· Section 51J provides that if the written notice issued
under section 51G is not complied with, the Essential
Services Commission or a supplier of last resort may
apply to the Supreme Court for a declaration that there
has been non-compliance and an order requiring
compliance.
· Section 51K provides that Division 8 is declared to be a
Corporations Act displacement provision for the
purposes of section 5G of the Corporations Act in
relation to the provisions of Chapter 5 of that Act.
Clause 15 repeals section 34 of the Gas Industry Act 2001 which is
replaced by new Division 8.
Division 2--Customer safety net amendments
Clause 16 amends section 21(7) of the Gas Industry Act 2001 to extend
the expiry date of section 21 from 31 December 2007 to
31 December 2008. Section 21 grants to the Governor in Council
power to make an Order regulating tariffs for the supply of gas to
a prescribed customer or a class of prescribed customers.
Clause 17 amends section 42(9) of the Gas Industry Act 2001 to extend
the expiry date of section 42 from 31 December 2007 to
31 December 2008. Section 42 requires gas retailers to offer to
supply gas to domestic or small business customers at tariffs, and
on terms and conditions, published in the Government Gazette.
Clause 18 amends section 43(7) of the Gas Industry Act 2001 to extend
the expiry date of section 43 from 31 December 2007 to
31 December 2008. Section 43 empowers the Essential Services
Commission to issue terms and conditions relating to the sale of
gas. Offers made by gas retailers under section 42 are void to the
extent they are inconsistent with these terms and conditions.
Clause 19 amends section 43A(6) of the Gas Industry Act 2001 to extend
the expiry date of section 43A from 31 December 2007 to
31 December 2008. Section 43A requires specified gas retailers
to publish on their Internet sites, details of their market tariffs and
terms and conditions for gas supply to small retail customers, in
accordance with guidelines published by the Essential Services
Commission.
8
Clause 20 amends section 44(3) of the Gas Industry Act 2001 to extend
the expiry date of section 44 from 31 December 2007 to
31 December 2008. Section 44 deems there to be a contract
between a relevant retailer and former franchise customer of that
retailer, until the contract is terminated or a new contract is
entered into. It provides that the tariffs and terms and conditions
of the deemed contract will be the same as those published by the
relevant retailer under section 42 of the Gas Industry Act 2001.
Clause 21 amends section 46(11) of the Gas Industry Act 2001 to extend
the expiry date of section 46 from 31 December 2007 to
31 December 2008. Section 46 deems there to be a contract
between a relevant retailer and a relevant customer, where that
customer moves into premises without formally entering into a
gas supply contract.
Clause 22 amends section 68(6) of the Gas Industry Act 2001 to extend
the expiry date of section 68 from 31 December 2007 to
31 December 2008. Section 68 grants to the Governor in Council
the power to make an Order regulating fees and charges that a
distributor may charge retailers supplied by the distributor in
connection with the retail gas market rules.
Division 3--MSO Rules related amendments
Clause 23 inserts a definition of AER (Australian Energy Regulator) into
section 3 of the Gas Industry Act 2001.
Clause 24 inserts a new section 52AA into Division 1 of Part 4 of the Gas
Industry Act 2001. New section 52AA inserts the definitions
of market services and market service fees. These definitions
relate to the amendments being made by clauses 25 and 26.
Clause 25 amends section 52 of the Gas Industry Act 2001.
Subclause (1) amends section 52(4) to enable Rules to be made
that confer functions and powers on the AER.
Subclause (2) inserts a new section 52(4A)(ba) to confer rule
making powers to enable Rules to be made relating to
VENCorp's market service fees and the approval
(or determination) of VENCorp's market service fees by the
Australian Competition and Consumer Commission (the ACCC).
Subclause (3) repeals section 52(6) to remove VENCorp's power
to amend the MSO Rules.
9
Clause 26 inserts new sections 52B and 52C into the Gas Industry Act
2001.
New section 52B provides for a scheme of approval (or
determination if there is no approval) of VENCorp's market
service fees by the ACCC. Subject to new section 52B(3), the
approval or determination will be in accordance with the MSO
Rules. New section 52(3) provides that market service fees may
only be approved or determined on the basis that the fees are
limited to recovery of the costs of providing the services without
consideration of profit or return on investment.
New clause 52C provides that if the ACCC does not make its
decision whether to approve or not approve VENCorp's proposed
market service fees, VENCorp's proposed market services are
taken to have been approved.
Clause 27 substitutes section 53 of the Gas Industry Act 2001.
The substitution repeals a redundant competition authorisation
provision and inserts a new savings provision to continue
the operation of the fees VENCorp currently charges market
participants (which have been approved under its access
arrangement under the Access Code) until market service fees
approved or determined under new section 52B take effect.
Clause 28 inserts new section 67A into the Gas Industry Act 2001.
New section 67A provides that the Essential Services
Commission may, by written notice, direct VENCorp to a thing
specified in the notice so that a relevant customer in the retail gas
market regulated under VENCorp's retail gas market rules, can be
transferred from the defaulting licensee to a supplier of last
resort. VENCorp is obliged by new section 67A(2) to comply
with a notice of the Essential Services Commission.
Division 4--Operation of underground storage facility
Clause 29 repeals the definition of Port Campbell facility from section 3 of
the Gas Industry Act 2001.
Clause 30 repeals the obligation in section 23 of the Gas Industry Act
2001 on operators of the Port Campbell underground gas storage
facility to be licensed.
Clause 31 consequentially repeals redundant references to the Port
Campbell facility in the Gas Industry Act 2001.
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Division 1--Other amendments
Clause 32 amends section 42(1)(a) and (b) and (3) of the Gas Industry Act
2001 to reduce the time retail safety net tariffs take effect after
they are published from 2 months to 1 month. Section 42
requires gas retailers to offer to supply gas to domestic and small
business customers at tariffs, and on terms and conditions,
published in the Government Gazette.
Clause 33 amends new sections 52(4A)(ba) and 52B of the Gas Industry
Act 2001 to replace the Australian Competition and Consumer
Commission with the Australian Energy Regulator as the entity
to approve (or determine) VENCorp's charges for market services
it provides to participants in the market regulated by the MSO
Rules.
PART 4--AMENDMENT OF GAS PIPELINES ACCESS
(VICTORIA) ACT 1998
Clause 34 inserts new section 20A into the Gas Pipelines Access (Victoria)
Act 1998 that provides that VENCorp is not be regarded as a
service provider for the purposes of the Gas Pipelines Access
(Victoria) Law and Gas Pipelines Access (Victoria) Regulations
when it only operates or controls the operation of the Victorian
gas transmission system. Accordingly, VENCorp will not be
required to have an approved Access Arrangement under the Gas
Pipelines Access (Victoria) Law.
PART 5--AMENDMENT OF GAS AND FUEL
CORPORATION (HEATANE GAS) ACT 1993
Clause 35 amends the Gas and Fuel Corporation (Heatane Gas) Act
1993 to insert a new section 20A.
New section 20A provides that an Order published on 25 August
1994 under section 11 of the Act is deemed to have (and to
always have had) effect as if paragraph (c) of the Order had
referred to Elgas Reticulation Pty Ltd and to the deed known as
the Sale of Pipeline and Transfer of Easement Agreement dated
14 May 1993 between the Gas and Fuel Corporation of Victoria
and Elgas Reticulation Pty Ltd.
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PART 6--REPEAL OF AMENDING ACT
Clause 36 provides for the automatic repeal of this amending Act on
1 January 2010. As suggested by the Scrutiny of Acts and
Regulations Committee, all amending Bills now contain an
automatic repeal provision, which will save the time and expense
of having to repeal amending Acts in statute law revision Bills.
The repeal of this Bill does not affect in any way the operation of
the amendments made by this Act (see section 15(1) of the
Interpretation of Legislation Act 1984).
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