Australian Energy Market Commission Establishment (Governance) Amendment Bill

Second Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (16:55): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech and the explanation of clauses inserted in Hansard without my reading it.

Leave granted.

The Government is amending the Australian Energy Market Commission Establishment Act 2004 to improve the governance of the national energy markets. The pace of change in energy markets is accelerating and as such it is important for key energy market institutions to have the capability for managing change in the energy markets.

The Australian Energy Market Commission makes rules which govern the electricity and natural gas markets, including the retail elements of those markets. The Australian Energy Market Commission also supports the development of these markets by providing advice to the COAG Energy Council.

The Bill amends the Australian Energy Market Commission Establishment Act 2004 to allow for an increase in the number of commissioners from a minimum of three to a maximum of five. Increasing the number of commissioners will increase the diversity of skills amongst commissioners, allow the Australian Energy Market Commission to engage more broadly with stakeholders and better provide for succession planning.

Consequential changes to the quorum in the Bill to reflect the principle that decision making should occur with majority consensus amongst commissioners as much as possible. In the event of equal votes, the Bill provides for the Chair to exercise a deciding vote.

I commend this Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Australian Energy Market Commission Establishment Act 2004

4—Amendment of section 3—Interpretation

A definition of eligible MCE Minister is inserted. The new definition is relevant for nomination purposes under the measure.

The definition of MCE (States and Territories) is repealed. The measure renders it redundant.

An interpretative provision relating to rounding fractions is included for the purposes of calculating two-thirds of eligible MCE Ministers.

5—Substitution of section 12

Proposed substituted section 12 provides that the AEMC is to comprise a minimum of 3 and a maximum of 5 Commissioners. One commissioner will be appointed as the Chairperson. The Chairperson and other Commissioners will be nominated for appointment by at least two-thirds of the eligible MCE Ministers.

6—Amendment of section 13—Terms and conditions of appointment

This amendment clause provides that if a vacancy occurs in the AEMC and, at the time of the vacancy, the AEMC consists of 3 or fewer Commissioners, a person must be appointed to fill the vacancy. In addition, if a vacancy occurs in the AEMC and, at the time of the vacancy, there were more than 3 commissioners, the vacancy must only be filled if the vacancy occurs in the office of Chairperson.

7—Amendment of section 14—Acting Chairperson or Commissioner

The amendments to subsections (1), (5) and (6) are consequential.

Proposed new subsection (3) provides that the Minister may appoint a person nominated by a minimum of two-thirds of the eligible MCE Ministers as an acting Commissioner during a period for which a Commissioner is not able to perform official functions or the office is vacant and the vacancy is required to be filled (in accordance with section 13).

8—Amendment of section 21—Meetings of AEMC

These amendments provide for the quorum at meetings of the AEMC to be one half of the total number of Commissioners (ignoring any fraction) plus 1. Related amendments are also made, including giving the Chairperson a casting vote in the event of a tie.

9—Transitional provision

A transitional provision relating to existing Commissioners continuing to hold office is set out.

Debate adjourned on motion of Hon. D.W. Ridgway.