Legislative Council Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia Legislative Council published Bills Statutes Amendment (Australian Energy Market Operator) Bill STATUTES AMENDMENT (AUSTRALIAN ENERGY MARKET OPERATOR) BILL Introduction and First Reading Introduction and First Reading Received from the House of Assembly and read a first time. Second Reading Second Reading The Hon. P. HOLLOWAY Legislative Council Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (22:24): 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 Government is delivering on a key Council of Australian Government's (COAG) energy commitment through new legislation to improve the governance arrangements for the Australian energy sector, for the benefit of South Australians and all Australians. In April 2007, COAG agreed to establish a single, industry-funded national energy market operator, to be called the Australian Energy Market Operator (AEMO), for both electricity and gas to strengthen the national character of energy market governance. This Bill supports the amendments to the National Electricity (South Australia) Act 1996 and National Gas (South Australia) Act 1997. The Statutes Amendment (Australian Energy Market Operator) Bill 2009 allows minor consequential changes to the Australian Energy Market Commission Establishment Act 2004, Electricity Act 1996 and Gas Act 1997 so they are consistent with the new arrangements relating to AEMO and its functions. Changes to the Australian Energy Market Commission Establishment Act 2004 also include enabling the appointment term of the Australian Energy Market Commission Commissioners for up to 5 years to allow staggered terms to achieve smooth transitions. Transitional provisions associated with changes to the Electricity Act 1996 include a scheme to provide for the transfer of the Electricity Supply Industry Planning Council non-jurisdictional specific functions, assets and liabilities to AEMO. Transitional provisions associated with changes to the Gas Act 1997 include a scheme to provide for the transfer of the Retail Energy Market Company various functions, assets and liabilities to AEMO. Explanation of Clauses Explanation of Clauses Part 1—Preliminary 1—Short title This clause provides for the short title of the measure. 2—Commencement The measure will be brought into operation by proclamation. 3—Amendment provisions This clause is formal. Part 2—Amendment of Australian Energy Market Commission Establishment Act 2004 4—Amendment of section 3—Interpretation This clause inserts a definition required in connection with the amendments to the relevant Act. 5—Amendment of section 13—Terms and conditions of appointment It is proposed that the term of office of a member of the Australian Energy Market Commission will now be for a term not exceeding 5 years, rather than a set term of 5 years. This will allow the terms of members to be 'staggered'. 6—Amendment of section 14—Acting Chairperson or Commissioner It will now be possible to appoint an Acting Commissioner as an Acting Chairperson of the Commission. 7—Amendment of section 32—Membership of Panel The processes to be followed before a person is recommended for appointment to the Consumer Advocacy Panel will now be determined by policy rather than prescribed by the legislation. 8—Amendment of section 36—Acting appointments as Chairperson or Panel member The period for which a person may act in an office of a member of the Panel is to be changed from 6 months to 8 months. 9—Amendment of section 41—Budgets Section 41 of the principal Act currently provides for the preparation of annual budgets by the Panel. It will now be possible for the Minister to require the Panel to prepare and submit other budgets for any period or with respect to any matter determined by the Minister. All budgets will be submitted to the Ministerial Council and furnished to the Australian Energy Market Commission. 10—Amendment of section 42—Funding for administrative costs associated with Panel 11—Amendment of section 43—Grant funding These amendments are consequential on the change of name of NEMMCO to AEMO. 12—Amendment of section 44—Provision of funding This amendment reflects the fact that AEMO is now to assume functions in relation to the provision of gas in some participating jurisdictions. 13—Amendment of section 46—Implementation of determinations of Panel This amendment is consequential on the change of name of NEMMCO to AEMO. 14—Repeal of Schedule 1 Schedule 1 may be deleted as it is no longer required. Part 3—Amendment of Electricity Act 1996 15—Amendment of section 4—Interpretation This clause inserts a definition required in connection with the amendments to the principal Act. 16—Repeal of Part 2 Division 2 The Electricity Supply Industry Planning Council is to be dissolved. 17—Amendment of section 8—Functions of Technical Regulator The Technical Regulator is to assume the function of monitoring and investigating major interruptions to the electricity supply in the State. 18—Amendment of section 15—Requirement for licence This amendment continues the current statutory policy under which NEMMCO—now to be called AEMO—does not require a licence for the purposes of its activities associated with the electricity supply industry. 19—Amendment of section 20—Licence fees and returns Certain costs of AEMO will be capable of being recovered under the annual licence fee payable under the Act. 20—Amendment of section 22—Licences authorising generation of electricity 21—Amendment of section 23—Licences authorising operation of transmission or distribution network 22—Amendment of section 91—Statutory declarations These amendments are consequential on the transfer of certain functions from the Planning Council to AEMO. 23—Amendment of section 98—Regulations This amendment will facilitate the continuation of various functions associated with the operation of the electricity market. Part 4—Amendment of Gas Act 1997 24—Amendment of section 4—Interpretation These amendments are consequential. 25—Amendment of section 19—Requirement for licence 26—Amendment of section 21—Consideration of application AEMO, as the retail market administrator for gas, will not require a licence under the Gas Act 1997. 27—Amendment of section 26—Licence authorising operation of distribution system 28—Amendment of section 26A—Licences authorising retailing These amendments are consequential on proposed amendments to the National Gas Law. 29—Repeal of section 26B 30—Amendment of section 33—Price regulation by determination of Commission These amendments are consequential on the decision to discontinue the licence requirement for a retail market administrator. 31—Repeal of section 33A This clause is no longer appropriate. 32—Amendment of section 93—Evidence This is a consequential amendment. Schedule 1—Transitional provisions The Schedule sets out various provisions consequential on the new arrangements for the management of the electricity market and the management of the gas market. In particular, a number of amendments relate to the arrangements that are to be put in place on the dissolution of the Electricity Supply Industry Planning Council, including so as to provide for the transfer of functions, assets and liabilities to AEMO (or any other relevant entity). Similar arrangements are to be put in place for the transfer of functions relating to the management of the gas market from REMCo to AEMO. These provisions are consistent with arrangements and reforms to be implemented by amendments to the National Electricity Law and the National Gas Law. Debate adjourned on motion of Hon. S.G. Wade.