NATIONAL ELECTRICITY (SOUTH AUSTRALIA) (NATIONAL ELECTRICITY LAW—MISCELLANEOUS AMENDMENTS) AMENDMENT BILL

Committee Stage

In committee (resumed on motion).

(Continued from page 907.)

Clause 5.

The Hon. M. PARNELL: I move:

Page 13, after line 19—

Insert:

renewable electricity means electricity generated from renewable energy sources;

Renewable Electricity and Emissions Intensity Panel means the panel of persons established by the AEMC under section 38A;

This covers the same ground as amendment No. 4 that we have already dealt with, so I do not propose to speak to that amendment further.

The Hon. P. HOLLOWAY: The government has indicated its opposition and the reasons for it when we spoke to the previous amendment.

Amendment negatived.

The Hon. R.I. LUCAS: Clause 5 refers to the definition of AEMC-initiated rules and then talks about additional minister-initiated rules and various other issues. I have a series of questions in relation to the National Electricity Rules, and this is as good a clause as any to resolve them. First, what is intended in this legislation for what is called in the definitions 'additional minister-initiated rules'?

The Hon. P. HOLLOWAY: Essentially these are the rules we distributed yesterday (the final draft), which relate to distribution regulation. They are entitled National Electricity Economic Regulation of Distribution Services Amendment Rules 2007. Copies have been distributed to interested members and they are the ones referred to under this clause of the bill.

The Hon. R.I. LUCAS: This may neatly segue into the other question I raised in the second reading, but I needed to clarify the government's response. When we debated this legislation in 2005, we were told explicitly then that the ministers were taking a once only opportunity of establishing a set of rules. The minister then stated:

...placing these principles in the law rather than the rules ensures they cannot be changed by the normal rule change process and instead must be changed by legislation, thereby providing greater certainty for the industry consumers on the regulatory practice of the Australian Energy Regulator.

The minister also said in the 2005 debate:

It is important to note that this initial rule-making power can only be exercised once.

The argument was that the minister had to have the capacity to initiate these rules on one occasion only, and after that we could be assured that there would be an independent and transparent process through the AEMC and other regulatory bodies without interference by the politicians and jurisdictions in terms of the rules. The minister said that we were only doing this once, that the industry needs certainty and that we have to provide greater certainty for the industry and consumers on regulatory practice. It was on that basis that a number of us accepted the assurances of the minister.

The arguments were that, if there were to be further changes, they would require legislation and the parliaments would therefore have to make legislative change, and that we would not in essence be sneaking changes in through the minister's rule-making process, but there would at least be a process whereby you have to come back to legislation or go through the transparent process of the AEMC.

The minister is saying that the book he has given me contains the additional minister-initiated rules. Having promised parliaments generally that there would be only a once-off use of this provision—a provision which has no parliamentary oversight at all (albeit I am sure my friend the Hon. Mr Parnell will indicate that it is of somewhat restricted or limited parliamentary oversight; nevertheless, we have the opportunity to raise issues in the debate)—we as members do not have an opportunity to participate at all in the process involving the rules.

I now understand from the government that, having given a commitment in 2005, it has broken that commitment and come back with 120 pages of minister-initiated rules, which have not been through the transparent process they talked about. I ask the minister to either agree or disagree with the proposition I am putting, and we will see where it takes us.

The Hon. P. HOLLOWAY: The rules the honourable member referred to and the debate that occurred back in 2005 related to the transition and market rules that were the subject of that legislation. My advice is that, apart from some consequential minor changes, those rules that provide the transmission market essentially have been unchanged. Here we are providing the rules relating to distribution, and it has been agreed that in future we would do the same in relation to gas and retail, so you would have the rules that would cover those new areas. Apart from some minor consequential changes, there have not been any changes to those transition and market rules that were part of the 2005 package.

The Hon. R.I. LUCAS: Are the minor changes the minister talks about incorporated in these additional minister-initiated rules, or have they been amended through some other process?

The Hon. P. HOLLOWAY: As the honourable member said in his earlier comments, there is the capacity for changes through the AEMC, but what we were talking about here is in relation to the minister-initiated changes. Those in this particular set of rules are, I am advised, minor and consequential, and they come through the extension of the new rules to cover distribution.

The Hon. R.I. LUCAS: Without wanting to delay this debate, is the minister prepared to undertake to provide advice regarding these 120 pages of rule changes or new rules? Which particular rules are designated by the minister as being minor or consequential changes to the existing rules? If the minister is prepared to give an undertaking, I am happy to accept that; otherwise I could work my way through them and ask the minister to outline which particular changes are consequential—which is probably not productive. Is the minister prepared to give that undertaking?

The Hon. P. HOLLOWAY: We can do that fairly quickly. I understand it is those on pages 88 to 90 of the rules circulated.

The Hon. R.I. LUCAS: So, that is pages 88, 89 and 90?

The Hon. P. HOLLOWAY: Yes.

The Hon. R.I. LUCAS: Is that all?

The Hon. P. HOLLOWAY: If there is any further information that is relevant we will provide that.

Amendment negatived; clause passed.

Clauses 6 and 7 passed.

Clause 8.

The Hon. M. PARNELL: I move:

Page 17, lines 19 to 26—Delete section 7 and substitute:

7—National electricity objective

(1) The objective of this Law is to promote efficient investment in, and efficient operation and use of, electricity services for the long-term interest of consumers of electricity with respect to—

(a) price, quality, safety, reliability and security of supply of electricity; and

(b) the reliability, safety and security of the national electricity market,

while taking into account the principles set out in subsection (2).

(2) The following principles are relevant to the objective of this Law:

(a) decisions under this law should take into account principles of ecologically sustainable development;

(b) recognition should be given to the long-term environmental and economic costs associated with greenhouse gas emissions arising from the generation or use of electricity;

(c) steps should be taken to achieve a reduction in greenhouse gas emissions arising from the generation or use of electricity, especially taking into account any targets to reduce greenhouse gas emissions that apply under a law of a participating jurisdiction;

(d) reasonable and reliable access to electricity should be viewed as an essential service within the community.

(3) For the purposes of subsection (2), principles of ecologically sustainable development will be taken to be the principles of ecologically sustainable development applying under the Environment Protection and Biodiversity Conservation Act 1999 of the Commonwealth.

As I alluded to before, this is the most important of my amendments—in fact, it goes to the heart of the whole regime of the national electricity market. The amendment deletes section 7 and substitutes a new section 7.

Section 7, as it currently exists, provides that the objective of this law is to promote efficient investment in and efficient operation and use of electricity services for the long-term interests of consumers of electricity with respect to (a) price, quality, safety, reliability and security of supply of electricity, and (b) the reliability, safety, and security of the national electricity system. They are fine as far as they go but, for the reasons I have already mentioned, they do not go far enough.

My amendment proposes the additional words 'while taking into account the principles set out in subsection (2)' after those I just read out. I then add proposed new subsection (2), which provides that 'The following principles are relevant to the objective of this law', and it then lists four additional principles which generally fall into three categories. The first, proposed new paragraph (a), provides that 'decisions under this law should take into account principles of ecologically sustainable development.'

The term ecologically sustainable development, or ESD, is not new to this place; we insert that concept into almost every piece of legislation that deals with the environment, natural resources, or the way the economy relates to the environment and to natural resources. So, it is not an unusual concept.

The importance of ESD in relation to this bill is that enshrined in ESD is a number of important concepts, not the least of which is the taking of a long-term economic approach; in particular, the long-term impact of externalities, which are currently not counted at all. We need to take into account long-term costs such as relate to the mining, in particular, of coal and the extraction of gas, land uses, thermal pollution and climate change. None of these things is currently accounted for. By incorporating into the national electricity objective a requirement to take into account the principles of ESD, we would be taking those things into account, in particular, externalities. My new paragraphs (b) and (c) provide:

(b) recognition should be given to the long-term environmental and economic costs associated with greenhouse gas emissions arising from the generation or use of electricity;

(c) steps should be taken to achieve a reduction in greenhouse gas emissions arising from the generation or use of electricity, especially taking into account any targets to reduce greenhouse gas emissions that apply under a law of a participating jurisdiction;

It is pretty clear from those words that what I am talking about is enabling us to enshrine into our interpretation of the national electricity law the target we have already agreed to in this parliament to reduce our greenhouse gas emissions by 60 per cent by 2050.

We have taken some pride as a state in having a target. We could argue whether it is adequate, which we will not go into here, but we do have a target. Why, then, do we not seek to incorporate that target into the national law as a target that applies in a participating jurisdiction? If we are serious about greenhouse, we need to include it in all relevant laws, and this law is more relevant than most, given that the majority of greenhouse emissions come from the generation of electricity.

The incorporation of an objective that relates to greenhouse is one of the amendments proposed by the environment community and consumer groups in their amendment package to which I have referred already. The third additional principle, which is included in paragraph (d), is that 'reasonable and reliable access to electricity should be viewed as an essential service within the community'.

At present, the objectives do not properly reflect the importance of energy as an essential part of daily life. Just reflect for a moment on low-income households; many of them are in below standard accommodation or housing with inadequate insulation and energy-inefficient appliances. Also, there are people who are not in gainful employment or who are involved in the caring business at home, and they are also likely to be at home for longer periods and therefore using more of their own electricity during the day, which means that they miss out on the hidden subsidy that people like us rely on when we are in full-time employment. We receive our energy provided at the workplace; none of us is personally paying for the air-conditioning that is keeping us cool on a hot day here in Adelaide. It is effectively a hidden subsidy. If we were at home in our inefficient and uninsulated houses, we would be more exposed to energy costs and to the market.

What that means is that low-income people and people with constrained cash flows, such as people on fixed incomes, are marginalised and they are not able to fully participate in the national electricity market.

Electricity is an essential service and, without it, the safety, health and welfare of a community, or sections of the community, would be endangered or seriously prejudiced. Governments should recognise this fact by subsidising electricity through community service obligations imposed on corporations, concessions and a safety net, including supply and price obligations. The likelihood of those things happening is greatly increased when we make explicit in the objectives of the national electricity law requirement that electricity should be viewed as an essential service within the community.

As I alluded to earlier, this amendment goes to the heart of what I have been calling for today, and what these peak community groups around Australia have been calling for, so I will divide on this amendment.

The Hon. P. HOLLOWAY: First, I want to deal with a couple of matters that came out of the previous debate. In relation to those consequential amendments, it may be that there are a few others from page 85—the entire changes to the rules, as I understand it. They are all consequential. Essentially, they just change the definition of jurisdiction to the AER, so there may be some that appear in those pages between 85 and 112 but, essentially, they are of a minor nature.

The other matter that the Hon. Rob Lucas asked about this morning was in relation to the process that the Ministerial Council on Energy agreed on. As I understand it, we cannot release the minutes of the meetings unless all the jurisdictions agree to it; however, I can provide the honourable member and anyone else who is interested with a copy of the Victorian Competition Review. This review sets out some of the answers and information, in particular, that the MCE process agreed to on 19 May 2006, which is before 1 July, or whatever the date was in the agreement. If one looks at the second page of this document, Advice/Background, it announces how the Ministerial Council on Energy has agreed to the process in clauses 14.11 to 14.15.

The other relevant page I would draw the honourable member's attention to is page 21. A couple of paragraphs above the heading at 4.3.2, it states:

The commission will consult with the relevant jurisdictional government as part of the process of developing its assessment and advice on the implementation options and an appropriate timeframe. In accordance with the AEMA, the jurisdiction would provide a public response within six months of receiving the commission's advice.

Each review will be limited to a period of no more than 12 months. As noted above, subsequent reviews would be conducted on a biennial basis, when needed.

So, whereas I said we cannot release the exact minutes without asking the jurisdictions, the document in relation to the Victorian review—which we can release—contains the answers. Hopefully, that will satisfy the honourable member.

To get back to the Hon Mark Parnell's amendment No. 6, the government does oppose this amendment concerning the addition of greenhouse to the objective. The objective is designed to promote efficiency to benefit the long-term interest of consumers with respect to price, quality, reliability and security of supply. The objective guides the Australian Energy Regulator and the Australian Energy Market Commission in performing their functions.

As part of the 2005 debate, it was highlighted that having a single overriding objective has the benefit of being clear and avoiding the potential conflict that may arise where a list of separate and sometimes disparate objectives are specified. As previously indicated, principles for ecologically sustainable development, the reduction of greenhouse gas emissions and other broader environmental objectives are best addressed by means of policy specific legislation.

The principle that reasonable and reliable access to electricity should be viewed as an essential service within the community is an accepted policy standard of all state and territory governments that is redressed through specific community service obligation mechanisms rather than the national electricity market, which is appropriately focused on energy market issues.

We talked about one of the honourable member's earlier amendments, we talked about industrial laws, occupational health and safety and the like, and whereas we certainly accept that these issues are extremely important in relation to broad energy policy within the country, we believe that these important issues should be addressed through policy-specific legislation rather than through this electricity bill.

The Hon. SANDRA KANCK: The minister has said that it is better addressed through policy-specific legislation. When might we expect such policy-specific legislation?

The Hon. P. HOLLOWAY: Just as we have legislation in relation to matters like occupational health and safety and the like, we do have the commonwealth government's mandatory renewable energy target (MRET). It has achieved increased renewable energy and has indirectly impacted on the choices being made in the national electricity market without having changed the national electricity law itself. I note that there is now bipartisan support at the federal level for increasing the level of MRET.

As I indicated earlier, there is also now bipartisan support federally for implementing an emissions trading regime by no later than 2012, which should provide the incentive to fundamentally transform over time the electricity supply industry towards low emissions generation capacity. So, that is how one should address these issues, rather than doing it within the national electricity law, which is already voluminous.

The Hon. SANDRA KANCK: I hope that opposition members are listening at the moment, because when this bill was debated in the other house there was a great deal of discussion about the fact that we are being prevented from really having any say in this. This amendment is something that I invite the opposition to support because here is probably one of the most fundamental clauses in this bill and this amendment to it. If the opposition asserts that it is being prevented from doing anything, then I ask it to support this. We are the lead legislators and if we can get a provision like this inserted into this bill it will then pave the way for the other states to do anything.

The minister referred to the policy specific idea: for instance, the national emissions trading scheme, which he said will be in place by 2012. A little bit of mathematics says that that is five years away, and yet yesterday figures came out to show that on a per capita basis Australia is the worst greenhouse gas emitter in the world. Today Professor Graham Pearman has come out to say that the worst case scenarios of the IPCC are not accounting for where we are headed at the present time. He is saying five to 10 times worse. So, how can anybody not support an amendment like this? This is crucial if we are serious about the forms of electricity and the way our market proceeds.

The committee divided on the amendment:

AYES (2)

NOES (16)

Majority of 14 for the noes.

Amendment thus negatived; clause passed.

Clauses 9 to 18 passed.

Clause 19.

The Hon. R.I. LUCAS: A series of sections are being inserted that give significant further powers to the regulatory authorities, such as search warrants, the announcement of entry, details of warrants, the seizure of documents, etc. Will the minister outline whether there have been problems with the existing powers of the energy regulator in terms of policing the National Electricity Market and its participants?

The Hon. P. HOLLOWAY: My advice is, no; the motivation for changing is really just to bring the provisions in line with current criminal law policy. So, it is not based on any particular problem with it; it is simply to make them consistent with current policy.

While I am on my feet I will give some more information following this morning's debate. The Hon. Rob Lucas will recall there was some discussion about what clause 14.15 meant when it provided that the parties further agree that for the purposes of the phase-out of the exercise of retail price regulation under clause 14.13 the process of responding to advice from the AEMC under clause 14.11(c)(i) will be as unanimously agreed by the MCE by 1 July 2006. Our advice is on checking that is correct: it is by 1 July 2006. As I previously indicated, in fact that agreement was reached on 19 May 2006, so it was correct as originally published.

Clause passed.

Clauses 20 to 27 passed.

Clause 28.

The Hon. M. PARNELL: I move:

Page 42—

After line 24—

Insert:

(1a) NEL, section 34(3)(c)—after 'the Reliability Panel' insert:

, the Renewable Electricity and Emissions Intensity Panel

After line 32—

Insert;

(3) NEL, section 34—after subsection (3) insert:

(4) Without limiting a preceding subsection, the AEMC must ensure, by 1 July 2009 or a later date that is prescribed by the regulations, that the Rules include provisions that are aimed at promoting—

(a) management of demand for electricity; and

(b) reductions in greenhouse gas emissions arising from the generation or use of electricity; and

(c) the interest of financially disadvantaged or low-income consumers of electricity; and

(d) the status of the supply of electricity as an essential service within the community.

(5) In addition, the AEMC must, when considering a proposal to make a Rule (whether initiated by the AEMC or requested by another entity or person), specifically assess the extent to which the Rule would be likely to result in a benefit, or cause a detriment—

(a) to consumers of electricity; and

(b) to the public more generally.

I will not speak at any length on these. My amendment No. 7 refers again to the renewable electricity and emissions intensity panel. We have discussed it before. Amendment No. 8 reflects the additional objectives that I sought to include in the legislation, and it requires rules and regulations to be made to give effect to demand management, greenhouse and the status of the supply of electricity as an essential service. Given that we have not inserted those as objectives in legislation, I can see that the will of the committee is not to have them as a requirement of rules or regulations either.

Amendment negatived.

The Hon. R.I. LUCAS: I have a question relating to page 36 of the bill, clause 28V—Preparation of network service provider performance reports, which provides that, subject to this section, the AER may prepare a report on the financial performance or operational performance of one or more network service providers. Is this a new provision in the national electricity law, or is it just a reworking of the old? In particular, under the existing national electricity law, does the AER have the power to prepare a report on the financial performance of a network service provider as opposed to its operational performance?

The Hon. P. HOLLOWAY: My advice is that it is a new provision—a new initiative—and that it is to ensure that performance reports that are undertaken by ESCOSA and the Victorian regulatory authority, the Central Services Commission of Victoria, can be explicitly performed by the AER.

The Hon. R.I. LUCAS: I take it that what the minister is saying is that this power will allow the AER to produce reports similar to the reports already produced on ETSA Utilities by ESCOSA here in South Australia. Is that correct?

The Hon. P. HOLLOWAY: Yes.

Clause passed.

Clause 29.

The Hon. R.I. LUCAS: On page 42, I think of clause 28—amendment of section 34—in checking what the change is in relation to this, it appears to be the insertion in subclause (1) of a new paragraph (b): 'any matter or thing contemplated by this law or is necessary or expedient for the purposes of this law'. Why do the minister and the jurisdictions want this additional provision added? Is there a problem with the existing drafting that has necessitated this additional paragraph (b)?

The Hon. P. HOLLOWAY: My advice is that it is in there simply to provide some flexibility. By analogy, if one takes regulations which need to be changed, obviously you need the head powers there to do it in relation to the rules. I understand that this is simply to enable some flexibility in relation to changing the rules.

The Hon. R.I. LUCAS: I have expressed this view privately to parliamentary counsel and I will express it publicly here—although the issue I raised with parliamentary counsel was, I think, more significant than this. There is, in my experience in this parliament, an increasing tendency to draft catch-all provisions in as many different ways as possible. As I am a suspicious person, I always believed that it was the ministers and the government who wanted to do it, but I understand, in some cases, it may well be that it is becoming parliamentary counsel or legal drafting practice.

The issue I raised was a particular provision in the SABSSA legislation which talked about, in essence, 'any other function that the board might contemplate', so that you could change the functions of a board through the decisions of that particular board. The advice I received was that there had been an increasing tendency in recent times to draft those sorts of provisions rather than having to come to the parliament to change particular functions. As I said, I think that is a more significant issue to be addressed at another time.

I highlight that this sort of drafting (which we are seeing increasingly in many pieces of legislation) has kernels of concern from the parliament's viewpoint in that we, as a parliament, should not, in drafting, open up the floodgates in terms of these sorts of catch-all provisions. In essence, they allow anything else that a minister or a board, or someone other than parliament, might deem to be relevant to the legislation and they can write their own rules.

Ultimately, it ought to be parliament that makes the particular decisions, to the extent that it is possible. Then, of course, you have regulations and, under this regime, of course, we do have the particular problem of the rules that exist. I raise that as a general issue. I then come to the next section, 28(2), which seems to have added another three lines at the end. The existing drafting says that 'it confers a function on', etc., and then the last three lines seem to have been added on:

...including guidelines, tests, standard procedures and any other document...that leave any matter or thing to be determined by the AER...or jurisdictional regulator...

Was there a problem with the existing drafting and, if so, what was it? Can the minister explain why there has been this amendment to this provision?

The Hon. P. HOLLOWAY: In relation to clause 1, it is a common drafting practice to enable any incidental changes to the rules that are required to be made—

The Hon. R.I. Lucas interjecting:

The Hon. P. HOLLOWAY: —or as necessary or expedient for the purposes of this law. It is constrained if you read the lot. Similarly with this clause my advice is that it is there to provide that flexibility in case some issue arises.

The Hon. R.I. Lucas: So there hasn't been an issue yet?

The Hon. P. HOLLOWAY: We will correspond with the honourable member in that regard.

The Hon. R.I. LUCAS: Given that South Australia is the lead legislator, has South Australian parliamentary counsel been responsible for the drafting, or has the government employed private consultants to be involved in the drafting of the national electricity law?

The Hon. P. HOLLOWAY: The Parliamentary Counsel's Committee (PCC) was responsible for the drafting and allocated this legislation to the Victorian parliamentary counsel.

The Hon. R.I. LUCAS: Why was that? We have extraordinarily competent parliamentary counsel in South Australia. They have always, as I understood it, been responsible for drafting the national electricity law. We were the lead legislators. I had been led to believe that not only was it not South Australian parliamentary counsel involved but that at one stage (perhaps not this stage) the jurisdictions had employed a leading national private firm to be involved in the drafting. If the minister does not have that answer, will he take that question on notice and indicate whether or not I have been misled in my belief in terms of the involvement of a national legal firm in the drafting of national electricity laws?

The Hon. P. HOLLOWAY: The first draft in 1996 was drafted by Victoria, as they were in 2005. In relation to private drafting of the rules, I am advised that that was not the case. I think Mr Hackett-Jones in a private capacity has drafted the rules. I am sure that they are thoroughly drafted.

The Hon. R.I. Lucas: The current rules?

The Hon. P. HOLLOWAY: Yes.

The Hon. R.I. LUCAS: The minister may check that I have been misled. Will he check that at no stage through the various tranches of national electricity law have jurisdictions employed a private legal firm to assist in the drafting? I take it that that is the minister's reply.

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: So Mr Hackett-Jones is the only example of what you are talking about; I was not talking about him.

The Hon. P. HOLLOWAY: My advice is that a private legal firm has been hired, but for consultancy advice and not in relation to the drafting itself.

The Hon. S.G. WADE: Minister, is it normal practice for parliamentary counsel interstate to deal with matters where we are the lead legislator? I think the Hon. Mark Parnell has rightly highlighted the awkward position this parliament is put in because it is expected to be the lead legislator for decisions made elsewhere—not only are we expected to be lead legislator but the parliamentary counsel who drafted the legislation is not even available to us. With the greatest respect for all his skills, if the parliamentary counsel present has not been involved in drafting the legislation, how can they advise us effectively?

The Hon. P. HOLLOWAY: The answer to that is that parliamentary counsel here was involved in the process; he is a member of the National Parliamentary Counsels Committee and he also signed off on the legislation that came through, so Mr Dennis is thoroughly familiar with the legislation. I assume there would be reverse cases where South Australia drafts lead legislation for other jurisdictions, so it is really up to that national committee. I guess it depends on who is available and the relevant expertise.

The Hon. S.G. WADE: To clarify my point, I am not actually objecting to, shall we say, outsourcing to interstate parliamentary counsel. My primary concern is that whatever parliament is asked to be the lead legislator has the best advice available to it—whether that be officer level or parliamentary counsel level advice. I concur with the expressions of concern made earlier by the Hon. Mark Parnell; I think that we, as a parliament, need to be vigilant and make sure that bureaucrats and ministers do not usurp the authority of parliament through processes such as this.

The Hon. R.I. LUCAS: Having opened that can of worms, and given that we have another two or three tranches of legislation, I indicate that the South Australian government might change its position and lobby furiously for the South Australian parliamentary counsel to be responsible for the drafting of the next two or three tranches of legislation that are coming.

The Hon. M. Parnell interjecting:

The Hon. R.I. LUCAS: At least the Hon. Mr Parnell and I can agree on that issue. My next question relates to clause 29, which is on the same page. This deletes sections 25 and 36 of the current national electricity law. Can the minister indicate why the existing sections have been deleted?

The Hon. P. HOLLOWAY: It has been consolidated under section 7, revenue and pricing principles.

The Hon. R.I. LUCAS: Is the minister assuring the committee that all the provisions that existed under sections 35 and 36 have been incorporated under section 7 of the legislation, that there has been no removal of any particular provision that currently exists in the transference?

The Hon. P. HOLLOWAY: We can have a look at it and give a written answer, but the advice I have is that an expert panel looked at it and its requirement was that the pricing principles of the previous legislation be incorporated in the new legislation. However, as I said, if the honourable member wishes, we can have our legal advisers check that out more thoroughly but, certainly, that is our belief.

The Hon. R.I. LUCAS: I am happy to take that assurance, but I would like that by correspondence if I can. The government then seeks to incorporate new clause 35, which provides that 'The AEMC must not, without the consent of the MCE, make a rule that confers a right or function'.

First, I assume that is the unanimous consent of the MCE; I want to confirm that point. Secondly, can the minister indicate whether there has been a particular issue or problem as to why, without the consent of the MCE, that has been incorporated?

The Hon. P. HOLLOWAY: The AEMC has conferred a power to the ministerial council under their rules, and that is the reason for this rule, namely, to require written consent before they do that in future.

The Hon. R.I. LUCAS: Can the minister explain what that rule is? I am assuming from this drafting that the ministerial council objected to the AEMC conferring a right or a function or duty on the ministerial council without their having agreed to it.

The Hon. P. HOLLOWAY: We believe it is to do with metrology, which is the science of metering. But, again, we would probably have to check that to get any further details.

The Hon. R.I. LUCAS: The issue of metering, of course, is a not insignificant issue in terms of the national electricity market at the moment. I would be interested to know what decision the AEMC took in relation to metering to which the ministerial council objected, and I am happy to accept that assurance from the minister.

The Hon. P. HOLLOWAY: My advice is that it was not the specifics of the decision; rather, it was the principle that they could impose that obligation on the ministerial council that was objected to.

Clause passed.

Clause 30 passed.

New clauses 30A and 30B.

The Hon. M. PARNELL: I move:

Page 43, after line 23—insert:

30A—Amendment of the NEL—New section 38A inserted

NEL—After section 38 insert:

38A—Renewable Electricity and Emissions Intensity Panel

(1) The AEMC must establish a panel of persons to be known as the Renewable Electricity and Emissions Intensity Panel, the composition of which must be in accordance with the rules.

(2) The functions and powers of the Renewable Electricity and Emissions Intensity Panel are—

(a) to monitor, review and report, in accordance with the rules—

(i) accounting principles or practices associated with any trading within the national electricity market that is relevant to the production or transfer of renewable electricity or to reductions in rates of greenhouse gas emissions; and

(ii) the quantity of renewable electricity that forms part of the national electricity market (distinguishing between the various parts of the market); and

(iii) the amount of greenhouse gas emissions arising from the generation or use of electricity as part of, or in connection with, the national electricity market; and

(iv) the quantity and quality of any certificates or other rights created by statute to promote renewable electricity or reductions in rates of greenhouse gas emissions that are traded as part of, or in connection with, the national electricity market; and

(b) at the request of the AEMC, to provide advice in relation to the integration of supply and reliability policies associated with the national electricity system with renewable electricity and greenhouse gas emission policies of the governments of the participating jurisdictions; and

(c) any other functions and powers conferred on it under this law and the rules.

(3) At the completion of a review, the Renewable Electricity and Emissions Intensity Panel must give a report to the AEMC.

Section 39—After the 'Reliability Panel' insert:

or the Renewable Electricity and Emissions Intensity Panel

This amendment incorporates a new body, the Renewable Electricity and Emissions Intensity Panel, which I believe is important for the reasons I have already given.

The Hon. P. HOLLOWAY: Because the Hon. Mr Parnell's amendments Nos 9 to 14 are all consequential on a previous amendment, we oppose the amendment.

New clauses negatived.

Clause 31 passed.

Clause 32.

The Hon. R.I. LUCAS: The drafting of clause 32 includes the wording 'any matter relating to any other market for electricity'. The current draft talks about 'national electricity market'. I am just wondering what jurisdictions parliamentary counsel has in mind here when it has already covered the national electricity market, which is what our legislation is about; yet they are talking about 'any other market for electricity'.

The Hon. P. HOLLOWAY: My advice is that it is there just to provide legal clarity so there can be no doubt in relation to it. It is being done, but this simply makes it absolutely crystal clear that it can do it. As I said, the honourable member has the correspondence that we had from Ian McFarlane relating to the Victorian review. This simply establishes it in the national electricity law and makes it crystal clear that there is the power to do that.

The Hon. R.I. LUCAS: This raises an interesting legal question, because it is a bit late if there is any doubt about it, given that the AEMC has already conducted—as the minister has acknowledged—a review of the Victorian market under some power that exists within the national electricity law. I can only assume that someone may challenge the authority (the AEMC) to undertake these reviews.

One does not draft these things and then add an additional function after having already done something unless somebody has raised a question or a concern that there is an existing authority within the national electricity law for the AEMC to have done this particular review of the Victorian market. Is the minister aware of any participant in the industry raising legal concerns about the authority of the AEMC?

The Hon. P. HOLLOWAY: No, we are not aware of any. My advice is that there is no problem with that. Section 41 of the existing act provides:

The MCE may give a written direction to the AEMC that the AEMC conducts a review into:

(a) any matter relating to the national electricity market; or

(b) the operation and effectiveness of the rules; or

(c) any matter relating to the rules.

So, it is a fairly broad general power. I assume that what we have here with—

The Hon. R.I. Lucas: Why do you need (d)?

The Hon. P. HOLLOWAY: As I said earlier, it is simply to clarify it. This relates to the ministerial council directing power. So, this head of power would give the ministerial council the power to direct the AEMC to undertake such a review. The AEMC already has the power to undertake a review. The question here is really about the ministerial council's power to direct the review rather than about the AEMC's power to undertake the review. So, the AEMC can undertake the review. My advice is that it has sufficient powers to do that without this clause, but this specifically enables the ministerial council to require the AEMC to undertake such a review.

The Hon. R.I. LUCAS: The ministerial council already has the power to give a written direction to the AEMC to conduct a review on any matter relating to the national electricity market. Whilst I am not a highly paid QC or parliamentary counsel, any matter relating to the national electricity market, to me, would include one of these market reviews. Clearly, someone has given legal advice that it does not or that there is some doubt.

I accept the fact that the ministerial advisers here might not have the answer to that if it is Victorian parliamentary counsel that has been drafting the provisions. The minister has given an assurance that he has no knowledge—and his advisers have no knowledge—of anyone raising a legal question as to whether or not the current drafting of 41.1 does not allow such an AEMC review. He has given an assurance based on his advice, so I guess there is not much more we can do at this stage.

Clause passed.

Clauses 33 to 52 passed.

Clause 53.

The Hon. M. PARNELL: I move:

Page 64, after line 8—Insert:

(d) the Renewable Electricity and Emissions Intensity Panel;

This is a reference to the Renewable Electricity and Emissions Intensity Panel, and I do not propose to speak to it further.

Amendment negatived; clause passed.

Clauses 54 and 55 passed.

Clause 56.

The Hon. R.I. LUCAS: I want to clarify this provision. It may well be caught up with the debate that we had earlier. This provision inserts a new section: the South Australian minister to make further rules relating to distribution determinations, consumer advocacy and other matters. Is this the provision that covers the 120 pages of rules that the minister gave me earlier?

The Hon. P. HOLLOWAY: Yes, that is correct.

Clause passed.

Clause 57.

The Hon. M. PARNELL: I move:

Page 67—

After line 6, insert:

(1) NEL, section 91(1)—delete 'or the Reliability Panel' and substitute:

, the Reliability Panel or the Renewable Electricity and Emissions Intensity Panel

After line 15, insert:

(3) NEL, section 91—after subsection (4) insert:

(5) The Renewable Electricity and Emissions Intensity Panel may only request the AEMC to make a rule that relates to its functions.

Note—

Section 38A(2) describes the functions of the panel.

These amendments are consequential, and I will not speak to them further.

Amendments negatived; clause passed.

Clauses 58 to 74 passed.

Clause 75.

The Hon. M. PARNELL: I move:

Page 76, after line 37—Insert:

122A—Immunity from personal liability of Renewable Electricity and Emissions Intensity Panel

(1) No personal liability attaches to a person appointed to the Renewable Electricity and Emissions Intensity Panel for an act or omission in good faith in the performance or exercise, or purported performance or exercise, of a function or power of the Renewable Electricity and Emissions Intensity Panel under this law, the regulations or the rules.

(2) A liability that would, by for subsection (1), lie against a person appointed to the Renewable Electricity and Emissions Intensity Panel lies instead against the AEMC.

This, again, is consequential.

Amendment negatived; clause passed.

Clause 76.

The Hon. M. PARNELL: I move:

Page 93, after line 21—Insert:

(11a) Schedule 1 to the NEL, item 33(b)—after 'the Reliability Panel' insert:

, the Renewable Electricity and Emissions Intensity Panel.

This is, again, consequential. I will take the opportunity—this being my last amendment—to thank parliamentary counsel—

The Hon. R.I. Lucas: South Australian.

The Hon. M. PARNELL: —South Australian parliamentary counsel for pulling these amendments together. I thank parliamentary counsel on behalf of my colleagues in other jurisdictions where I will be sending these amendments and the Hansard record of their fate. I fully expect that Greens members of parliament in other states and territories will be moving very similar, if not identical, amendments to the fine work done by South Australian parliamentary counsel.

Amendment negatived; clause passed.

Remaining clauses (77 to 92) and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.