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National Gas (Victoria) Bill 2008
Introduction Print
EXPLANATORY MEMORANDUM
General
A new national framework for economic regulation of services provided by
means of electricity and gas distribution networks has been developed by the
Ministerial Council on Energy under the Council of Australian Governments
(COAG). This Bill will facilitate implementation in the gas sector of the
second phase of the national energy market reform program under COAG.
The Bill will also continue to facilitate access to pipeline services provided
by means of transmission pipelines.
As part of the second phase of the reform program, economic regulation of
services provided by means of electricity and gas distribution networks is
being transferred from the various jurisdictional regulators to the Australian
Energy Market Commission (AEMC) and the Australian Energy Market
Regulator (AER). In addition, economic regulation of pipeline services
provided by means of transmission pipelines will be transferred from the
Australian Competition and Consumer Commission to the AER. The new
framework is to be enacted through the Parliament of South Australia and
will apply in Victoria pursuant to this Bill.
This Bill will--
· first, apply the National Gas Law (NGL) and National Gas
Rules (NGR) as laws of Victoria and will repeal the Gas
Pipelines Access (Victoria) Act 1998;
· second, provide for transitional arrangements in relation to
access arrangements relating to pipeline services provided by
means of distribution pipelines;
· third, provide for the transfer of responsibility for Victorian
specific economic regulation of pipeline services provided by
means of distribution pipelines from the Essential Services
Commission (ESC) to the AER.
561047 1 BILL LA INTRODUCTION 6/5/2008
Clause Notes
PART 1--PRELIMINARY
Clause 1 sets out the main purpose of the Bill which is to provide for the
establishment of a national framework to enable third parties to
gain access to certain natural gas pipeline services.
Clause 2 provides for the commencement of the Bill on a day or days to
be proclaimed. The clause does not specify a default
commencement date because the Bill is implementing a
nationally agreed legislative scheme. It is the intention of the
scheme that it comes into operation on the same day in all of the
participating jurisdictions. The clause provides for maximum
flexibility in relation to the commencement of the Bill to ensure
that the nationally agreed legislative scheme will commence in
Victoria on the nationally agreed day.
Clause 3 defines certain words and expressions used in the Bill.
Clause 4 provides that the National Gas (Victoria) Law and the National
Gas (Victoria) Regulations bind the Crown.
Clause 5 provides that the National Gas (Victoria) Law and the National
Gas (Victoria) Regulations apply in the coastal waters of this
State.
Clause 6 provides for the extra-territorial operation of the National Gas
(Victoria) Law and the National Gas (Victoria) Regulations.
PART 2--NATIONAL GAS (VICTORIA) LAW AND
NATIONAL GAS (VICTORIA) REGULATIONS
Clause 7 applies, as a law of Victoria, the National Gas Law set out in the
Schedule to the National Gas (South Australia) Act 2008 of
South Australia. The applied Law is to be referred to as the
National Gas (Victoria) Law.
Clause 8 applies, as regulations for the purposes of the National Gas
(Victoria) Law, the regulations in force under Part 3 of the
National Gas (South Australia) Act 2008 of South Australia.
The applied regulations are to be referred to as the National Gas
(Victoria) Regulations.
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Clause 9 defines certain expressions that occur in the National Gas
(Victoria) Law and the National Gas (Victoria) Regulations,
being expressions whose meaning necessarily varies according to
the jurisdiction within which they are being applied, for the
purposes of their application within Victoria.
PART 3--CROSS VESTING OF POWERS
Clause 10 provides for the Minister of the Commonwealth administering
the Australian Energy Market Act 2004 of the Commonwealth
(the Commonwealth Minister), the AER, the National
Competition Council and the Australian Competition Tribunal
to do acts in, or in relation to, this State in the performance or
exercise of a function or power conferred by the national gas
legislation of another participating State or Territory.
Clause 11 provides for the Minister of another participating State or
Territory to do acts in, or in relation to, this State in the
performance or exercise of a function or power conferred by the
national gas legislation of another participating State or Territory.
Clause 12 provides that if the national gas legislation of another
participating State or Territory confers a function or power on the
Minister for Energy, the Minister may perform that function or
exercise that power.
PART 4--GENERAL
Clause 13 provides for an exemption from State duties or taxes in relation
to certain transfers of assets or liabilities that are made for the
purposes of ensuring that a person does not carry on a business of
producing, purchasing or selling natural gas or processable gas in
breach of any ring fencing requirements of the national gas
legislation or for the purpose of the separation of certain
businesses or business activities as required by an AER ring
fencing determination.
Clause 14 provides that if any action is taken under the national gas
legislation of a participating jurisdiction with respect to a cross
boundary pipeline by a relevant Minister or a Supreme Court of
the jurisdiction, each other relevant Minister or Supreme Court in
any other participating jurisdiction in which the pipeline is
situated is also taken to have taken that action. No grounds for
appeal is permitted against any such action by a relevant Minister
except in the jurisdiction with which the pipeline is most closely
connected. See also clause 16.
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Clause 15 provides that a provision of the proposed Act or the National Gas
(Victoria) Regulations is to be construed so as not to exceed the
legislative power of the Parliament, in particular with respect to a
provision that appears to impose a duty on the Commonwealth
Minister, the Australian Energy Regulator, the National
Competition Council or the Australian Competition Tribunal.
Clause 16 provides that it is the intention of section 14(2) of the Bill to alter
or vary section 85 of the Constitution Act 1975. Section 14(2)
provides that no proceeding for judicial review or for a
declaration, injunction, writ, order or remedy may be brought
before the Supreme Court to challenge or question any action,
or purported action, of a relevant Minister taken, or purportedly
taken, in relation to a cross boundary distribution pipeline unless
this jurisdiction has been determined to be the participating
jurisdiction with which the cross boundary distribution pipeline
is most closely connected. The effect of the provision is that
proceedings may only be brought in the Supreme Court of the
jurisdiction with which a cross boundary distribution pipeline is
most closely connected.
PART 5--SPECIFIC VICTORIAN TRANSITIONAL
ARRANGEMENTS
This Part will clarify the operation in Victoria of, on the one hand, the new
national framework for economic regulation of gas distribution networks
under the National Gas Law, on the other hand, the current framework under
the Gas Industry Act 2001 (the GIA) and the Essential Services
Commission Act 2001 (the ESC Act). Both frameworks are established
under Victorian law and the provisions for Part 5 will assist with avoiding
inconsistencies.
Division 1--Interpretation
Clause 17 defines certain words and expressions used in Part 5 of the Bill
including--
· designated distribution pipeline;
· distribution pipeline service;
· ESC guideline No. 17;
· Gas Distribution System Code;
· gas distribution system regulatory duty;
· gas distribution system regulatory function or power;
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· GIA distribution pipeline;
· relevant gas distribution system law or instrument;
· revised gas distribution access arrangement.
Clause 18 defines the term gas distribution system regulatory duty, that is,
a duty under a relevant gas distribution system law or instrument
the ESC had in relation to a gas distribution company
immediately before the day on which a revised gas distribution
access arrangement that relates to pipeline services provided by
that gas distribution company is deemed to be an AER approved
full access arrangement. The clause excludes a duty to--
· grant, vary revoke or approve the transfer of a
distribution licence held by that gas distribution
company; or
· make or amend a code or guideline that relates to the
provision of distribution pipeline services provided by
that gas distribution company.
Clause 19 defines the term gas distribution system regulatory function or
power, that is, a function or power under a relevant gas
distribution system law or instrument the ESC had in relation to
a gas distribution company immediately before the day on which
a revised gas distribution access arrangement that relates to
pipeline services provided by that gas distribution company is
deemed to be an AER approved full access arrangement.
The clause excludes a function or power to--
· grant, vary revoke or approve the transfer of a
distribution licence held by that gas distribution
company; or
· make or amend a code or guideline that relates to the
provision of distribution pipeline services provided by
that gas distribution company.
Clause 20 empowers the Minister, by Order published in the Government
Gazette, to specify a provision of the Gas Distribution System
Code that confers a function or power on the ESC or imposes a
duty on the ESC as a specified Gas Distribution System Code
provision. The Minister can only do so if the provision relates to
the economic regulation of distribution pipeline services provided
by a gas distribution company.
5
Clause 21 provides that, except where the contrary intention appears, Part 5
of the Bill does not affect the Interpretation of Legislation Act
1984.
Division 2--Current and pending Victorian gas distribution
system access arrangement revisions
Clause 22 provides that certain transitional clauses contained in Schedule 3
to the National Gas Law will not apply as laws of Victoria.
These clauses relate to access arrangements relating to pipeline
services provided by means of distribution pipelines that are
covered pipelines under the Gas Pipelines Access (Victoria) Law.
The transitional provisions in Division 2 of Part 5 of this Bill will
apply instead.
Clause 23 provides that on and after the NGL commencement day (the day
on which the Gas Pipelines Access (Victoria) Act 1998 is
repealed and the National Gas (Victoria) Law commences
operation), the Gas Pipelines Access (Victoria) Law continues to
apply in respect of a gas distribution access arrangement that is
under review under Gas Pipelines Access (Victoria) Law before
the NGL commencement day and the relevant Regulator has an
obligation to continue to take action under the Access Code until
the review is finalised.
Clause 24 provides that if a decision under the Gas Pipelines Access
(Victoria) Law has been made in relation to a gas distribution
access arrangement before the NGL commencement day and the
review of that decision has been commenced and has not been
completed under the Gas Pipelines Access (Victoria) Law before
that day, then the Gas Pipelines Access (Victoria) Law continues
to apply to that review and any proceeding (including any appeal)
relating to the review until the review or proceeding has been
finally determined.
Clause 25 provides for when a revised gas distribution access arrangement
(defined in clause 17) under the Gas Pipelines Access (Victoria)
Law is deemed to be an AER approved full access arrangement
under the National Gas (Victoria) Law.
Clause 26 clarifies that sections 3, 8 and 10.8 of the Access Code continue
to apply to a revised gas distribution access arrangement deemed
to be an AER approved full access arrangement under clause 25
until the revisions to such an access arrangement first approved
or made under the National Gas (Victoria) Law and National Gas
Rules take affect.
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The clause also provides--
· for an avoidance of doubt, that a covered pipeline
service provider must submit an access arrangement
revision proposal for such an access arrangement in
accordance with section 132 of the National Gas
(Victoria) Law and the National Gas Rules despite
anything to the contrary in the access arrangement; and
· the AER is deemed to have the functions and powers a
relevant Regulator has under sections 3, 8 and 10.8 of
the Access Code as applied under the clause.
Clause 27 provides that the definition of reviewable regulatory decision in
section 244 of the National Gas (Victoria) Law is to include
decisions of the AER that--
· disallow a variation proposed by a service provider of a
Reference Tariff contained in a revised gas distribution
access arrangement deemed to be an AER approved full
access arrangement under clause 25; or
· make the AER's own variation of a Reference Tariff in
respect of a revised gas distribution access arrangement
deemed to be an AER approved full access arrangement
under clause 25 on disallowing a variation proposed by
a service provider or because the service provider fails
to submit such a variation as required.
Division 3--AER functions, powers and duties under State
instruments
Clause 28 confers and imposes on the AER the regulatory functions, powers
and duties the ESC had under a relevant gas distribution system
law or instrument in relation to a gas distribution company
immediately before a revised gas distribution access arrangement
that relates to pipeline services provided by that gas distribution
company is deemed to be an AER approved full access
arrangement. The clause also confers and imposes on the AER
the functions, powers and duties under Division 3 of Part 5 of the
Bill.
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Clause 29 removes from the ESC any powers, functions and duties that the
ESC had under a relevant gas distribution system law or
instrument in relation to a gas distribution company immediately
before a revised gas distribution access arrangement that relates
to pipeline services provided by that gas distribution company is
deemed to be an AER approved full access arrangement.
Clause 30 confers on the AER functions and powers to enforce, under the
ESC Act, provisions of gas distribution licences that require
compliance with the Gas Distribution System Code, the
Wimmera and Colac Tariff Order or ESC Guideline No. 17.
Clause 31 removes from the ESC any powers and functions it had
immediately before a revised gas distribution access arrangement
that relates to pipeline services provided by a gas distribution
company is deemed to be an AER approved full access
arrangement to enforce provisions of gas distribution licences
that require compliance with the Gas Distribution System Code,
the Wimmera and Colac Tariff Order or ESC Guideline No. 17.
Clause 32 provides that the AER can request the ESC to amend the Gas
Distribution System Code or ESC Guideline No. 17.
Clause 33 provides that the appeal provisions of the ESC Act will apply to a
requirement made by the AER under section 37 of the ESC Act
or a decision of the AER under the ESC Act to disclose
information or the contents of a document given to the AER by a
person under a notice given by the AER under section 38(2)(c) or
38(2)(d) of that Act.
Clause 34 authorises and requires in a particular case, the ESC to provide
information and assistance to the AER.
Division 4--Miscellaneous matters
Clause 35 provides that the AER must not direct a covered pipeline service
provider to, and a covered pipeline service cannot, submit a
consolidated access arrangement for 2 or more covered pipelines
that are distribution pipelines.
Clause 36 continues the operation of the accounting ring fencing obligations
under the Gas Pipelines Access (Victoria) Law until 1 January
2011 as they apply to the provision of pipeline services provided
by means of a designated distribution pipeline, and disapplies,
until the same date, the provision of the National Gas Law
(section 141) that provides for the equivalent obligation.
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Clause 37 continues the operation of ESC Guideline No. 17 by deeming it
to be a regulatory information order under the National Gas
(Victoria) Law (the transitioned Victorian distribution RIO) until
the day revisions to a revised gas distribution access arrangement
that is deemed to be an AER approved full access arrangement
under clause 25, and that are first approved or made in
accordance with the National Gas (Victoria) Law and the
National Gas Rules after the NGL commencement day, take
effect.
Clause 38 imposes a duty on the AER, when making a general regulatory
information order or preparing a regulatory information notice
after the transitioned Victorian distribution RIO ceases to have
effect, to--
· have regard to the transitional Victorian distribution
RIO; and
· ensure, to the maximum practicable extent, that the
general regulatory information order or regulatory
information notice is consistent with the transitional
Victorian distribution RIO.
PART 6--REPEALS AND AMENDMENTS
Division 1--Repeal of Gas Pipeline Access (Victoria) Act 1998
Clause 39 repeals the Gas Pipeline Access (Victoria) Act 1998.
Division 2--Amendment of this Act when Offshore Petroleum Act
2006 of the Commonwealth commences
Clause 40 provides for the substitution of the definitions adjacent area of
another participating jurisdiction and adjacent area of this
jurisdiction in clause 9(1) on the commencement of the Offshore
Petroleum Act 2006 of the Commonwealth.
Division 3--Other amendments
Clause 41 amends sections 3, 20A(2), 48(4) and 51D(3) of the Gas
Industry Act 2001 to substitute references to "Access Code"
with references to the National Gas (Victoria) Law. The clause
also repeals section 20(6) of that Act which will be made
redundant on the commencement of the National Gas (Victoria)
Law.
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Clause 42 amends section 32(1), and substitutes section 38BA, of the
Interpretation of Legislation Act 1984 to substitute references
to the Gas Pipelines Access (Victoria) Law and the Gas Pipelines
Access (Victoria) Regulations with references to the National
Gas (Victoria) Law and the National Gas (Victoria) Regulations.
Clause 43 amends section 122(9) of the Pipelines Act 2005 to substitute a
reference to the Gas Pipelines Access (Victoria) Act 1998 with
a reference to the National Gas (Victoria) Law.
Clause 44 amends the definition of relevant State Act in section 3 of the
Federal Courts (State Jurisdiction) Act 1999 to repeal
paragraph (d) of that definition which makes reference to the Gas
Pipelines Access (Victoria) Act 1998.
10