House of Assembly Fifty-Second Parliament, First Session (52-1) 52 1 Parliament of South Australia House of Assembly published Bills Statutes Amendment (National Energy Retail Law) Bill STATUTES AMENDMENT (NATIONAL ENERGY RETAIL LAW) BILL Introduction and First Reading Introduction and First Reading The Hon. J.D. HILL House of Assembly Kaurna Minister for Health Minister for Mental Health and Substance Abuse Minister for the Southern Suburbs Minister Assisting the Premier in the Arts The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (15:58): Obtained leave and introduced a bill for an act to the Australian Energy Market Commission Establishment Act 2004, the National Electricity (South Australia) Act 1996 and the National Gas (South Australia) Act 2008. Read a first time. Second Reading Second Reading The Hon. J.D. HILL House of Assembly Kaurna Minister for Health Minister for Mental Health and Substance Abuse Minister for the Southern Suburbs Minister Assisting the Premier in the Arts The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (15:58): I move: That this bill be now read a second time. I seek leave to have the second reading explanation inserted in Hansard without my reading it. Leave granted. The Statutes Amendment (National Energy Retail Law) Bill 2010 makes amendments to the National Electricity Law in the Schedule to the National Electricity (South Australia) Act 1996, the National Gas Law in the Schedule to the National Gas (South Australia) Act 2008 and the Australian Energy Market Commission Establishment Act 2004, which are necessary and consequential to the implementation of the National Energy Retail Law (South Australia) Bill 2010. Consequential amendment of National Electricity and Gas Laws The consequential amendments set out in this Bill are essentially the same for the National Electricity Law and for the National Gas Law. These consequential amendments enable rules to be made about new subject matters that form part of the National Energy Customer Framework and to align the reporting, compliance and enforcement regimes across the three national energy laws (the National Electricity Law, the National Gas Law and the National Energy Retail Law). Application of the Statutes Amendment (National Energy Retail Law) Bill 2010 The National Energy Retail Law will not commence in any participating jurisdiction (including South Australia) immediately upon enactment by the South Australian Parliament. Rather, its commencement will occur in each jurisdiction when the jurisdiction applies the Law. Similarly, the amendments to the National Electricity Law and National Gas Law made by this Bill will apply in a participating jurisdiction when the National Energy Retail Law is applied in that jurisdiction. Rule making power of the South Australian Minister The National Electricity Law and the National Gas Law are amended to give the South Australian Minister the power to make initial National Electricity Rules and National Gas Rules relating to the implementation of the National Energy Retail Law and Rules. There are two new sets of initial rules, for retail customer connections and for regulating the retail support arrangements (including credit support) between energy distributors and retailers. The content of these new rules is considered to be appropriately located in the National Electricity Rules and the National Gas Rules, rather than in the National Energy Retail Rules. As is the case under the National Energy Retail Law, this Bill confers a residual power for the South Australian Minister to make necessary and consequential changes to the initial Rules, should it become evident as part of jurisdictional implementation of the National Energy Retail Law that adjustments are required. Any such changes may only be made by the South Australian Minister until any one of the participating jurisdictions applies the National Energy Retail Law and must first be approved by the Ministerial Council on Energy. Thereafter, all Rule changes will be subject to the standard Australian Energy Market Commission rule change process. Australian Energy Market Commission’s rule making powers The rule making powers of the Australian Energy Market Commission under the National Electricity Law and the National Gas Law will similarly extend to the new subject matters set out in this Bill. In addition, where the Australian Energy Market Commission receives a rule change request under the National Electricity Law, it will be able to make a consequential amendment to another rule that may have been made under the National Electricity Law, the National Gas Law, or the National Energy Retail Law. The Bill also makes a similar amendment to the Australian Energy Market Commission’s consequential rule making power under the National Gas Law. Harmonisation of reporting and information management This Bill provides for a number of ways in which reporting and information management may be streamlined or harmonised under the three national energy laws, which will reduce duplication and costs to industry participants in providing information to the various regulatory bodies. For example, it provides that information used by the Australian Energy Regulator for performance reporting obligations under the National Electricity Law or National Gas Law may be used in preparing similar reports under the National Energy Retail Law. It also provides for the preparation of single documentation by the Australian Energy Regulator under the three national energy laws and for the use of information obtained by the Australian Energy Regulator under each Law for a purpose connected with the performance or exercise of its functions and powers under any of the other national energy laws. Enforceable undertakings This Bill will make amendments to the National Electricity Law and National Gas Law to establish for the first time in the energy sector a power for the Australian Energy Regulator to accept enforceable undertakings from energy market participants, similar to the power which the Australian Competition and Consumer Commission has under the Trade Practices Act 1974 (Commonwealth). Similar provisions will exist in the National Energy Retail Law, creating a uniform enforcement power for the Australian Energy Regulator under the three national energy laws. This type of administrative remedy gives the Australian Energy Regulator an alternative tool in achieving compliance, rather than having to proceed straight to court action. Conduct provision regime for the National Electricity Law In addition, the Bill introduces a conduct provision regime into the National Electricity Law, which mirrors the conduct provision regimes in the National Gas Law and the new National Energy Retail Law. This enables persons regulated under the National Electricity Law to take direct action against another party where appropriate. For example, this regime will operate in relation to certain specified obligations owed by retailers to distributors and vice versa under the new credit support arrangements. Nominated Distributor There are some distribution entities that are not subject to full economic regulation but who provide services to retail customers, such as uncovered gas distribution pipelines. In order to allow jurisdictions to include these distributors in the national connection framework or the retail support rules, this Bill enables the 'nomination' of these distributors by a jurisdiction. The application Act of a participating jurisdiction, for either the National Electricity Law or the National Gas Law, may provide for the making of a local regulation nominating an entity to operate as a nominated distributor. That regulation may apply specified provisions of the National Electricity Rules or the National Gas Rules (as the case may be), with or without modification, to the nominated distributor relating to the connection of premises of retail customers and retail support (including credit support) obligations between distributors and retailers. A nomination of an entity as a nominated distributor may be made for the whole or a specified part of the geographical area of a jurisdiction, or the whole or a specified part of the distribution system or pipeline that is owned, controlled or operated by the entity. Corporations Act displacement This Bill will provide for the displacement of some provisions of the Corporations Act 2001 (Commonwealth) to ensure the primacy of certain National Electricity Rules and National Gas Rules in the event of a retailer of last resort event. This is consistent with a similar limited displacement of the Corporations legislation provided for by the National Energy Retail Law for the purpose of supporting the operation of the national retailer of last resort regime in Part 6 of that Law. Minor and other amendments This Bill includes a range of other minor amendments consequential to the enactment of the National Energy Retail Law or necessary for the implementation of the new national connections rules and the retail support rules as part of the National Electricity Rules and the National Gas Rules. These include the introduction of new or amendment of existing definitions, the identification of relevant civil penalty provisions, and other minor amendments to bring consistency to the terminology used in the three national energy laws. The immunity in relation to failure to supply electricity in section 120 of the National Electricity Law will also be amended to prevent the variation or exclusion of the statutory immunity in that section under an agreement between a retailer, or a distributor, and a person who is a small customer within the meaning of the National Energy Retail Law. This, along with similar provisions in the National Energy Retail Law, will ensure that the statutory immunity applies to electricity and gas retailers and distributors under agreements with small customers, while preserving the right of such customers to seek redress where there has been bad faith or negligence by the other party. Amendment of Australian Energy Market Commission Establishment Act 2004 This Bill also makes minor consequential amendments to the Australian Energy Market Commission Establishment Act 2004 to enable the Australian Energy Market Commission to exercise its functions and powers under the National Energy Retail Law. I commend the Bill to Members. Explanation of Clauses Explanation of Clauses Part 1—Preliminary 1—Short title This clause is formal. 2—Commencement Clause 2(1) provides for the measure to be brought into operation by proclamation. Clause 2(2) excludes the operation of section 7(5) of the Acts Interpretation Act 1915 due to the fact that this measure forms part of a co-operative legislative scheme involving other Australian jurisdictions. 3—Amendment provisions This clause is formal. Part 2—Amendment of Australian Energy Market Commission Establishment Act 2004 4—Amendment of section 3—Interpretation The definition of National Energy Law under the Australian Energy Market Commission Establishment Act 2004 is to be amended to make reference to the legislative instruments associated with the National Energy Retail Law. Part 3—Amendment of National Electricity Law 5—Amendment of section 2—Definitions This clause inserts new definitions in the National Energy Law (the NEL) on account of the new National Energy Retail Law. 6—Substitution of section 2A An access dispute will include a dispute between a retail customer (or other person specified by the Rules) and a regulated distribution system operator about an aspect of access to a connection service specified by the Rules to be an aspect to which Part 10 applies. 7—Insertion of section 2AA This clause inserts a section which outlines the provisions which apply a civil penalty. 8—Amendment of section 2D—Meaning of regulatory obligation or requirement These amendments insert references to the National Energy Retail Law or the National Energy Retail Rules in various provisions of section 2D of the NEL. 9—Insertion of section 6A This clause inserts a section which allows a participating jurisdiction to nominate an entity as a distributor to which certain aspects of the Rules will apply. 10—Insertion of section 10A It is necessary to displace certain provisions of the Corporations Act 2001 of the Commonwealth. 11—Amendment of section 11—Electricity market activities in this jurisdiction 12—Amendment of section 14A—Regulated transmission system operator must comply with transmission determination 13—Amendment of section 14B—Regulated distribution system operator must comply with distribution determination These amendments update cross-references. 14—Amendment of section 15—Functions and powers of AER 15—Amendment of section 16—Manner in which AER performs AER economic regulatory functions or powers These amendments make technical drafting amendments. 16—Amendment of section 28N—Compliance with regulatory information notice that is served 17—Amendment of section 28O—Compliance with general regulatory information order These clauses identify sections as civil penalty provisions. 18—Amendment of section 28V—Preparation of network service provider performance reports Any information that is used to prepare a report under section 28V of the NEL will be able to be used for the purposes of preparing a report under the National Energy Retail Law or the National Energy Retail Rules. 19—Substitution of section 28ZD 20—Amendment of section 28ZF—AER enforcement guidelines These are consequential amendments. 21—Insertion of sections 28ZH and 28ZI A new provision will allow the AER, where it is authorised to prepare a document under the law or the Rules, and under the National Gas Law or the National Gas Rules, or the National Energy Retail Law or the National Energy Retail Rules, to prepare a single document to satisfy all requirements. Another provision will allow the AER to use information obtained under the Law or the Rules for a purpose connected with its performance or exercise of a function or power under the National Gas Law or the National Gas Rules, or the National Energy Retail Law or the National Energy Retail Rules. 22—Amendment of section 34—Rule making powers These are consequential amendments to the rule making powers of the AEMC and the NEL. 23—Amendment of section 49—AEMO's statutory functions This is a consequential amendment. 24—Amendment of section 50D—Network agreement This amendment identifies section 50D(1) as a civil penalty provision. 25—Amendment of section 50F—Augmentation This is a consequential amendment. 26—Amendment of section 53C—Compliance with market information instrument These amendments identify specified sections as civil penalty provisions. 27—Amendment of section 54C—Disclosure required or permitted by law etc This amendment up-dates terminology. 28—Deletion of section 58—Definitions This is a consequential amendment. 29—Insertion of Part 6 Division 1A This clause inserts a provision that will allow the AER to accept and enforce enforceable undertakings. 30—Amendment of section 60—Time limit within which AER may institute proceedings 31—Amendment of section 61—Proceedings for breaches of a provision of this Law, the Regulations or the Rules that are not offences These are consequential amendments. 32—Insertion of sections 61A and 61B This clause inserts a provision that will allow a person other than the AER to apply to a court for a declaration that a person is in breach of a conduct provision. Another provision will allow recovery of damages by people who suffer loss as a result of a breach of a conduct provision. 33—Amendment of section 64—Matters for which there must be regard in determining amount of civil penalty 34—Amendment of section 67—Conduct in breach of more than one civil penalty provision These are consequential amendments. 35—Substitution of section 68 and insertion of section 68A Section 68 must be recast to recognise that a person may breach a conduct provision. New section 68A provides that an attempted breach of a civil penalty provision is deemed to be a breach of that provision. 36—Amendment of section 69—Civil penalties payable to the Commonwealth 37—Amendment of section 74—Power to serve a notice 38—Amendment of section 75—Form of notice 39—Amendment of section 79—Withdrawal of notice 40—Amendment of section 81—Payment expiates breach of civil penalty provision 41—Amendment of section 83—Conduct in breach of more than one civil penalty provision 42—Substitution of section 86 These are consequential amendments. 43—Insertion of section 90D New section 90D will allow the Minister to make initial Rules associated with the operation of the National Energy Retail Law or the National Energy Retail Rules. 44—Amendment of section 91B—AEMC may make Rules that are consequential to a Rule request This amendment will allow the AEMC to make a rule associated with the operation of the National Gas Law or the National Energy Retail Law that is necessary or consequential, or corresponds, with a rule under this law. 45—Amendment of section 120—Immunity in relation to failure to supply electricity This amendment will exclude section 120(2) from operating with respect to certain agreements with small customers (as defined by the National Energy Retail Law). 46—Amendment of section 136—Compliance with access determination 47—Amendment of section 157—Preventing or hindering access These amendments identify certain provisions as civil penalty provisions. 48—Amendment of Schedule 1—Subject matter for the National Electricity Rules This is a consequential amendment. 49—Amendment of Schedule 3—Savings and transitionals This amendment will insert a clause that will provide that the amendments made to the NEL by this measure will not apply in a participating jurisdiction until the National Energy Retail Law is applied in that jurisdiction as a law of that jurisdiction. This provision will ensure that the amendments do not flow "automatically" into a participating jurisdiction unless or until it applies the National Energy Retail Law. Part 4—Amendment of National Gas Law 50—Amendment of section 2—Definitions This clause inserts new definitions into the National Gas Law (the NGL) on account of the new National Energy Retail Law. 51—Amendment of section 6—Meaning of regulatory obligation or requirement These are consequential amendments. 52—Insertion of section 8A This clause inserts a section which allows a participating jurisdiction to nominate an entity as a distributor to which certain aspects of the Rules will apply. 53—Insertion of Chapter 1 Part 5 It is necessary to displace certain provisions of the Corporations Act 2001 of the Commonwealth. 54—Amendment of section 64—Preparation of service provider performance reports Any information that is used to prepare a report under section 64 of the NGL will be able to be used for the purposes of preparing a report under the National Energy Retail Law or the National Energy Retail Rules. 55—Substitution of section 66 New section 60 will allow the use of certain information for the purposes of the other laws or related Rules. 56—Amendment of section 68—AER enforcement guidelines This is a consequential amendment. 57—Insertion of sections 68A and 68B These new provisions will correspond to new sections 28ZH and 28ZI in the NEL. 58—Amendment of section 74—Subject matter for National Gas Rules 59—Amendment of section 91A—AEMO's statutory functions These are consequential amendments. 60—Amendment of section 91GC—Disclosure required or permitted by law etc This amendment up-dates terminology. 61—Insertion of section 178A The new section will apply the dispute provisions to certain disputes under the Rules. 62—Insertion of Chapter 8, Part 1A This amendment inserts a provision that will allow the AER to accept and enforce enforceable undertakings. 63—Amendment of section 232—Proceedings for declaration that a person is in breach of a conduct provision This is a consequential amendment. 64—Insertion of section 294C New section 294C will allow the Minister to make initial Rules associated with the operation of the National Energy Retail Law or the National Energy Retail Rules. 65—Amendment of section 297—AEMC may make Rules that are consequential to a Rule request 66—Amendment of Schedule 1—Subject matter for the National Gas Rules These are consequential amendments. 67—Amendment of Schedule 3—Savings and transitionals This amendment will insert a clause that will provide that the amendments made to the NGL by this measure will not apply in a participating jurisdiction until the National Energy Retail Law is applied in that jurisdiction as a law of that jurisdiction. This provision will ensure that the amendments do not flow "automatically" into a participating jurisdiction unless or until it applies the National Energy Retail Law. Schedule 1—Statute Law Revision This Schedule provides for references to the Trade Practices Act 1974 to be up-dated. Debate adjourned on motion of Mr Pederick.