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Legislative Council - Fifty-Second Parliament, First Session (52-1)
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NATIONAL ENERGY RETAIL LAW (SOUTH AUSTRALIA) BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Industrial Relations, Minister Assisting the Premier in Public Sector Management) (21:37): 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.

Introduction

The Government is presenting new legislation that will enhance the national character and efficiency of Australia's energy markets, and provide strong protections for energy consumers in South Australia and on a national basis.

The National Energy Retail Law (South Australia) Bill 2010 delivers on the Government's commitment to national energy reform and will deliver a national framework for regulating retailers and distributors who sell and supply electricity and gas to customers.

Background

As Honourable Members will be aware, South Australia is the lead legislator for national gas and electricity legislation and it retains this important role under the reforms proposed.

In June 2006 the Council of Australian Governments amended the Australian Energy Market Agreement to provide for (among other things), the national framework for energy access; and the national framework for distribution and retail services.

Implementation of the national framework for distribution and retail services was split into two packages (economic regulation of distribution services and the retail market regulation) due to the scale and complexity of the regulation. The 'economic' package was completed with the commencement of amendments to the National Electricity Law and Rules on 1 January 2008 and the new National Gas Law and Rules on 1 July 2008.

As part of the ongoing national energy market reforms, the Ministerial Council on Energy has completed the final component of the national framework for distribution and retail regulation set out by the Council of Australian Governments in the Australian Energy Market Agreement. This reform, known as the National Energy Customer Framework (here referred to as the 'Customer Framework'), will be implemented through a package of Laws, Rules and Regulations. The Customer Framework consists of this Bill, which includes as its Schedule the National Energy Retail Law, as well as Rules and Regulations to be made under that Law called the National Energy Retail Rules and the National Energy Retail Regulations. The Customer Framework requires consequential changes to the National Electricity Law and the National Gas Law which are included in the accompanying Statutes Amendment (National Energy Retail Law) Bill 2010. Finally, the Customer Framework also includes key amendments to the National Electricity Rules and the National Gas Rules on two matters. The first are national rules which enable retail customers and property developers to seek new (or significant modifications to existing) connections to electricity and gas distribution networks. The second are new rules to set out the rights and obligations between distributors and retailers which are necessary to support the retail supply of energy to customers and include a credit support regime.

Other minor consequential amendments are also being made to the National Electricity Rules and the National Gas Rules to ensure consistency with the new Customer Framework.

The Customer Framework will be applied in all jurisdictions which are part of the National Electricity Market, namely, South Australia, Victoria, New South Wales, the Australian Capital Territory, Tasmania, Queensland and the Commonwealth by application Acts which apply the framework for the purposes of those jurisdictions. The Ministerial Council on Energy has agreed that relevant jurisdictions will introduce the national framework progressively, noting that some transitional legislative arrangements will be required to appropriately manage the transition process.

Key Benefits of this Bill

The National Energy Retail Law (South Australia) Bill 2010 seeks to achieve a national regulatory regime for retailers and distributors selling and supplying energy to customers. The Customer Framework will be under the jurisdiction of the Australian Energy Regulator as regulator and enforcement body and the Australian Energy Market Commission as rule maker. Its primary aims are to streamline regulatory requirements, increase efficiency through regulatory harmonisation and maintain best practice consumer protection. As a result, the Bill is expected to facilitate an increase in retail competition by reducing regulatory complexity and lowering barriers to entry, as well as by encouraging consumers to participate in this competitive market by providing strong and equitable consumer protections across participating jurisdictions.

Increased efficiency from national regulatory arrangements for energy

The separate regulation of energy retail markets by individual States and Territories is inefficient and imposes costs on retailers operating across State borders. There is duplication of processes and systems, which leads to higher compliance costs.

At the request of the Council of Australian Governments, the Ministerial Council on Energy has driven this current legislative reform with a key aim to achieve a national, harmonised regulatory regime for energy retailing. As a result, this reform removes many of the current inconsistencies for energy retailers and cuts red tape and compliance costs for Australian retailers operating across State borders.

Promoting competition via national authorisation framework

This Bill contains significant measures to facilitate retailers moving beyond individual State borders and to operate nationally. This brings benefits to customers from increased competition. One of these measures is the establishment of a national retailer authorisation, allowing a retailer to obtain one authorisation to operate nationally across all participating jurisdictions, rather than the six separate retail licences that would currently be required.

Consumer benefits

This Bill seeks to provide a comprehensive package of robust energy-specific consumer protections. The Customer Framework is intended to complement other general consumer protection laws such as the Australian Consumer Law and privacy legislation. Small customers will also have an efficient and effective option to deal with complaints and disputes via access to jurisdictional energy ombudsman schemes.

A further key benefit of the Customer Framework to consumers of electricity and gas is greater consistency of consumer rights across all participating jurisdictions. Energy consumers living in different parts of Australia benefit from having the same access to information and level of protection irrespective of which jurisdiction they reside in. Particular benefits flow to vulnerable consumers in financial hardship under national hardship requirements forming part of the framework.

National retailer of last resort scheme

A substantial element of the Bill is the institution of a national Retailer of Last Resort (here referred to as RoLR) framework. This provides for the substitution of a back-up electricity or gas retailer if a customer's current retailer fails. The national RoLR framework replaces existing jurisdictional RoLR schemes for electricity and gas.

RoLR schemes are necessary to support fully contestable retail markets and ensure the continued supply of energy for customers where a retailer exits the market due to solvency issues or for other reasons. RoLR schemes also bring financial security for the wholesale electricity and gas markets if a retailer fails. A national scheme provides the benefits of applying to retailers operating across State borders, which should increase the capacity of the market to manage a wider range of possible RoLR events. It also allows the national coordination of these important regulatory arrangements by a single regulator—the Australian Energy Regulator.

National regulator

The Australian Energy Regulator will be the national regulator operating under the National Energy Retail Law, taking a role similar to its role under the National Electricity Law and National Gas Law. This Bill therefore brings the whole energy supply chain—wholesale markets, transmission networks, distribution networks and retail markets—under national regulation with the Australian Energy Regulator overseeing a robust compliance and enforcement regime across all participating jurisdictions.

Part of a broader energy regulatory framework

The National Energy Retail Law (South Australia) Bill 2010 forms the final piece of the broader national energy regulation frameworks and will work in a complementary way with established energy regulatory frameworks which apply in the energy sectors at State, Territory and Commonwealth levels.

The Customer Framework in this Bill will work alongside existing national electricity and gas regulatory frameworks covering wholesale markets and network access regulation. The accompanying Statutes Amendment (National Energy Retail Law) Bill 2010 will make limited consequential amendments to the National Electricity and Gas Laws to ensure the National Energy Retail Law operates effectively within the broader energy regulatory environment. These consequential amendments will only have force and effect in a participating jurisdiction from the time that the jurisdiction applies the National Energy Retail Law as a law of that jurisdiction.

In addition, minor consequential amendments to the National Electricity and Gas Rules are also included in the Customer Framework that are necessary to align the framework within the existing national energy regimes.

The National Energy Retail Law (South Australia) Bill 2010 will replace significant parts of existing jurisdictional energy legislation as jurisdictions transition to the Customer Framework. A jurisdiction's application Act may, for transitional or other reasons, modify the application of various provisions of the Customer Framework for the jurisdiction. Further, certain provisions of the Customer Framework rely upon jurisdictional energy legislation for their full effect, for example, the operation of energy ombudsman schemes, guaranteed service level schemes, and social policy initiatives such as community service obligations. Therefore, the Customer Framework is intended to operate in parallel with jurisdictional energy legislation and should in its application to a jurisdiction be read in conjunction with the application Act and other energy legislation of the jurisdiction.

This Bill will establish a regulatory regime that jurisdictions can fully adopt over time as appropriate for the circumstances of each market. That is, the Bill is sufficient to support a fully competitive retail market in the absence of retail price regulation, integrating regulation of retail market activity and consumer protections. That being said, this Bill will be able to be implemented by jurisdictions with continued retail price regulation, although some transitional legislative arrangements may be necessary.

Consultation

The introduction of this Bill follows substantial consultation on two exposure drafts of the Law and Rules, a Regulation Impact Statement and many other formal and informal consultative processes, through which officials have engaged with stakeholders to develop a comprehensive regime.

More than six discrete formal consultation processes have taken place where written submissions have been invited from stakeholders. Public forums have also been held and working groups have met with stakeholders frequently on an informal basis to discuss concerns and provide feedback on policy positions. Consultation commenced with a number of issues papers in 2006 through to June 2007, followed by a comprehensive Standing Committee of Officials Policy Paper and a Regulation Impact Statement in 2008, two public exposure drafts of the Law and Rules in 2009 and targeted consultation on specific matters such as the retailer of last resort regime and the national connections framework.

Stakeholder submissions have been carefully considered throughout the process. Energy Ministers have sought to ensure strong protections for consumers, while also seeking to balance the benefits of such protections against the cost of additional regulatory obligations, which ultimately get passed through to customers, and can act as a barrier to competition and innovation. The Ministerial Council on Energy is confident that the right balance has been achieved. This Bill represents a good outcome after several years of consultation and work to balance the interests of consumers and industry and positions from jurisdictions.

National Energy Retail Law objective

This Bill incorporates an objective which mirrors the objectives in the National Electricity Law and the National Gas Law. The national energy retail objective guides both the Australian Energy Regulator in carrying out its role under the Customer Framework and the Australian Energy Market Commission when it is carrying out its rule making role.

The national energy retail objective is 'to promote efficient investment in, and efficient operation and use of, energy services for the long term interests of consumers of energy with respect to price, quality, safety, reliability and security of supply of energy.'

The alignment between the objectives of the laws governing the various sectors of the energy markets is an important foundation for the regime. Adopting an equivalent objective for the Customer Framework will ensure that the national energy regimes remain focussed on the long term interests of consumers. This is a fundamental principle agreed between governments in the Australian Energy Market Agreement.

The long term interest of consumers of energy requires the economic welfare of consumers, over the long term, to be maximised. The long term interests of consumers in competitive energy markets are promoted through the application and development of consumer protections to enable customers to participate in the market with confidence, support effective consumer choice and ensure ongoing access to energy on reasonable terms as an essential service.

When the National Electricity Law and the National Gas Law were each introduced to this Parliament, the economic efficiency nature of the objective was emphasised in the context of the regulatory frameworks for the wholesale markets and the national access regimes for monopoly infrastructure, to deliver services in the long term interests of consumers. The national energy retail objective in this Bill operates in the context of a Customer Framework which has as its focus a strong regime of consumer protections for small customers, and further protections and assistance programs for customers in hardship, to ensure that those customers are able to confidently participate in the retail market, thereby maximising their economic welfare.

The Bill provides a robust interface between the community and a competitive retail market, and it is important that economic concepts such as the essential service nature of energy, information asymmetry between energy businesses and their customers, and transaction costs for small customers, along with the benefit to the community of ensuring that vulnerable customers are able to maintain their energy supply and pay their bills, are at the forefront of decision making under the Customer Framework.

Consequently and necessarily, the Bill also clarifies that the Australian Energy Regulator and Australian Energy Market Commission, in exercising their respective statutory functions under the Customer Framework, are to do so in a way that is compatible with the development and application of consumer protections for small customers, including (but not limited to) protections relating to hardship customers.

Which parties does the Bill apply to?

As I have already mentioned, the Customer Framework will govern the sale and supply of energy by retailers and distributors, respectively, to customers. As a result, the Bill applies to the relationships between retailers and customers, distributors and customers, and retailers and distributors.

A fundamental principle underlying the Customer Framework established by this Bill is that energy is an essential service. The framework recognises that small customers (both residential and small business customers) have little bargaining power and can be put at a significant disadvantage by the practices of their energy retailers and distributors if those practices are not regulated to ensure certain minimum standards. The Bill therefore incorporates a suite of consumer protections to ensure fairness to small customers. The Bill also provides additional protection to the most vulnerable customers including a requirement on retailers to develop and maintain a customer hardship policy, the detail of which is discussed later.

Small customers are defined as all residential customers and small business customers who consume energy below an upper consumption threshold as prescribed in the National Energy Retail Regulations. The upper consumption thresholds to be prescribed on commencement are 100 megawatt hours of electricity per annum and 1 terajoule of gas per annum. The National Energy Retail Regulations recognise that these thresholds may need to be reviewed to take account of developments in the energy markets over time and therefore require the Ministerial Council on Energy to undertake a review of the thresholds after a period of no more than five years following the commencement of the Regulations and then at intervals of no more five years after that.

Few of the consumer protections contained in the Bill extend to large customers, who consume above the upper threshold, as large customers have significant bargaining power with retailers in a competitive market, and additional protections come with an additional cost which impacts the financial interests of large customers.

It is expected that when Parliament is presented with the consequential amendments package to South Australia's legal instruments South Australia will retain its existing electricity consumption threshold of 160 megawatt hours per annum for the time being, rather than moving to the national upper consumption threshold under the Bill. This will assist with South Australia's transition to the national package with the retention of price regulation arrangements. It is noted that the gas threshold in South Australia is consistent with the national upper consumption threshold of 1 terajoule of gas per annum.

I now turn to the detail of the arrangements in the Bill.

Retailer—Small Customer Relationship

The Customer Framework deals with key aspects of the relationship between retailers and small customers. It ensures that small customers continue to benefit from important consumer protections, while delivering efficiency savings to energy retailers through a nationally consistent framework.

Obligation to offer supply

A fundamental consumer protection underpinning this Bill is the imposition of a regulatory obligation on retailers to offer to supply energy to small customers. This obligation recognises that regulatory intervention is needed to ensure that essential services are accessible to all those who require them.

The National Energy Retail Law obliges a retailer to offer supply to a small customer if it is the 'designated retailer' for that customer. The designated retailer is the retailer that has financial responsibility for the premises of the customer in the wholesale energy market if there is an existing connection. Where there is no connection, the local area retailer is the designated retailer and will have the obligation to offer supply to newly connecting customers in the retailer's specified local area. The Customer Framework also includes arrangements to assist a customer to identify its designated retailer.

The National Energy Retail Law requires the designated retailer to have a standing offer of supply, incorporating the standard retail contract, which will be set out in a schedule to the National Energy Retail Rules, and published standing offer tariffs (which may be regulated tariffs where a jurisdiction continues to regulate retail prices). The designated retailer can only make a limited range of permitted alterations to their form of standard retail contract such as the inclusion of the retailer's corporate branding. Retailers will also be subject to limitations about the frequency of variations to the standing offer prices.

The National Energy Retail Rules prescribe the regulatory obligations that form the terms and conditions for the sale of energy under the standard retail contract and deal with requirements relating to billing, payment, security deposits, disconnection and reconnection, complaints and disputes, and termination.

This approach of specifying the terms and conditions of standing offer contracts provides regulatory clarity to retailers and eliminates the need to seek approval of the contract by the Australian Energy Regulator. Most importantly, it offers small customers a full set of consumer protections. The standard contract also provides a basis for customers to compare and choose alternative market retail contracts.

Generally, it is this standard contract and a standing offer price that a designated retailer must offer to a small customer.

However, to provide greater flexibility for retailers supplying 'larger' small business customers, the National Energy Retail Law allows retailers to fulfil the obligation to supply those business customers consuming 40 megawatt hours or more per annum of electricity or 400 gigajoules or more per annum of gas by offering either a standard retail contract or a market retail contract. As with the upper consumption thresholds, these thresholds are also prescribed in the National Energy Retail Regulations and are subject to review by the Ministerial Council on Energy.

There is no obligation to offer supply to large customers in this Bill, as a large customer's energy supply decisions are commercial decisions, based on the availability of energy at a suitable price to sustain a particular business.

Market retail contracts

Small customers may elect to purchase energy under a market retail contract. Market retail contracts give retailers the opportunity to differentiate themselves from their competitors by offering innovative products and services. These innovations foster competition and allow consumers to shop around for the retail product that best suits their needs.

However, the increased flexibility given to retailers is not achieved at the expense of a robust consumer protection regime. The National Energy Retail Law ensures that key consumer protections are maintained under a market retail contract by requiring retailers to adopt a set of minimum terms and conditions as prescribed by the National Energy Retail Rules.

In jurisdictions that permit the use of prepayment meters, such as South Australia, the National Energy Retail Rules also provide additional requirements to the prescribed terms and conditions of the market retail contract, specifically designed to offer comparable protections to small customers wishing to purchase energy through a prepayment meter system.

Deemed supply arrangements

In further recognition of the essential nature of energy, small customers whose market retail contract expires, or who move in to premises which are connected to the network but have not yet arranged a contract with a retailer, will be supplied energy by the designated retailer for that premises under a deemed customer retail arrangement. However, while continuity of supply on reasonable terms is vital, retailers also need to be able to identify their customers with certainty. Accordingly, customers are required to take appropriate steps to enter into a standard or market retail contract as soon as practicable.

National hardship regime

The essential nature of energy means it is critical to ensure the vulnerable members of our communities are supported. The Customer Framework provides this support by establishing a national customer hardship regime.

Under this regime, each retailer is required to develop and maintain a customer hardship policy. The purpose of a customer hardship policy is to identify residential customers experiencing payment difficulties due to hardship and to assist those customers to better manage their energy bills on an ongoing basis.

The Bill requires that the customer hardship policies satisfy minimum requirements. The minimum requirements ensure that retailers have in place the necessary processes and policies to assist customers identified as requiring assistance. These include processes for identifying customers experiencing payment difficulties due to hardship and providing for the retailer's early response to such customers. Retailers will also be required to offer flexible payment options, including payment plans and the Centrepay payment option, and have in place processes to identify appropriate government concessions.

The protections contained in the Bill are supplemented by additional safeguards in the National Energy Retail Rules, in particular limits on the circumstances in which a customer on a payment plan can be disconnected.

Each customer hardship policy must be approved by the Australian Energy Regulator, who may only approve a policy that meets the mandatory minimum requirements set out in the Bill. The Bill also provides statutory guidance to the Australian Energy Regulator as to the matters it must have regard to when considering whether to approve a customer hardship policy, including that retailers must have programs and strategies to avoid disconnection of a hardship customer solely due to inability to pay. The Customer Framework also empowers the Australian Energy Regulator to monitor retailers' compliance with the obligations of the customer hardship regime, and to develop and report on a range of hardship program indicators.

It is intended that adopting a national approach to customer hardship will enable effective management of the costs to retailers where they participate in more than one jurisdiction.

Informing small customers

This Bill includes rights for small customers to a range of information to be provided by both retailers and distributors. Some of these include information to identify who is their designated retailer, information to be given to customers when entering into a retail contract, historical billing information, tariff variations, and disconnection warning notices.

When a small customer contacts their designated retailer to obtain supply, the Bill requires that retailer to also disclose the availability of its standing offer to ensure that customers are aware of this entitlement.

Energy Marketing

Retailers and marketers must obtain 'explicit informed consent'

The Bill requires retailers (and those marketing on their behalf) to obtain explicit informed consent from a small customer for key transactions such as entry into a market retail contract. This Bill requires full and adequate disclosure of all matters relevant to the consent of the small customer and retailers are required to retain records of customer consent for at least 2 years. Further, a market retail contract is void if the retailer fails to obtain explicit informed consent of the small customer.

Ensuring best practice energy marketing behaviour

This Bill enables rules for energy marketing that complement the requirements set out in the general Australian Consumer Law and in national telephone and e-marketing legislation. The energy marketing rules in the Customer Framework recognise that retailers in the energy market engage in extensive marketing activity to gain and retain customers and that energy marketing is often conducted by third party contractors who are not directly accountable to energy customers. This regime will promote best practice marketing behaviour and provide appropriate redress for small customers if problems occur.

The energy marketing rules are designed to apply where it is considered energy-specific requirements are needed, such as energy marketing to small business customers, provision of energy-specific information to customers before entry into market retail contracts, and the need to allow a cooling-off period even though supply of energy may have commenced.

Together with the Australian Consumer Law and other general consumer protection legislation, the energy marketing regime under this Bill provides protection to energy customers and ensures that conduct of energy marketers is appropriate and not invasive.

Australian Energy Regulator price comparator service

This Bill enables the Australian Energy Regulator to establish, develop and operate a price comparator service. The price comparator is a service to small customers to enable them to compare the standing offer price available to a customer and market offers available in the area in which their premises is located, to find the most suitable offer available. This initiative will also promote competition amongst retailers. The price comparator service will operate on an 'opt-in' basis for jurisdictions that elect to apply the service.

The Bill requires retailers to provide information to the Australian Energy Regulator on their standing offer price and market offer prices that are generally available to small customers. This ensures that the obligation is not too onerous for retailers and does not hamper their ability to develop innovative and competitive retail offers.

The format and content of the price comparator and other price disclosure requirements will be developed by the Australian Energy Regulator through a full consultation process with stakeholders as part of the implementation of this national framework.

Energy Bill Benchmarking

This Bill enables the making of rules in relation to the provision of energy consumption benchmarks to residential customers. Once developed, benchmarks for energy consumption would be included on the energy bills of residential customers to enable them to compare their energy consumption against an appropriate localised benchmark. The objective of providing these benchmarks is to motivate above-average energy users to implement energy efficiency improvements that reduce energy use.

While the Bill provides for rules to be developed with respect to 'energy' consumption benchmarks, the initial rules will only provide for consumption benchmarks relating to electricity. This structure will allow for future development of new rules to extend the benchmark regime to apply to gas consumption, if proven cost effective.

To ensure their relevance and effectiveness, the initial electricity consumption benchmarks will be based on localised zones and contain a household size comparator. Retailers will have the discretion to present the benchmarks in either a graphical or tabular format and may position them in a location of their choosing on their customers' electricity bills. This degree of discretion is intended to help minimise retailers' costs and ensure flexibility in the way that they communicate with their customers.

The initial electricity consumption benchmarks will be developed in consultation with relevant stakeholders. Once developed, initial benchmarks will be prescribed in the National Energy Retail Regulations. Responsibility for the ongoing administration of the electricity consumption benchmarks will be with the Australian Energy Regulator under the National Energy Retail Rules. This role will primarily entail updating the benchmarks every three years.

Distributor-Customer Relationship

In establishing a direct contractual relationship between a distributor and a customer, the Bill recognises that distributors are responsible for, and best able to manage, the physical delivery of energy at a customer's premises, even though the energy is purchased from a retailer. The approach is similar to existing contractual models that are operating in electricity in most jurisdictions already, but it does represent a change for many gas distributors. This Bill does not interfere with existing gas access arrangements of distributors and works in tandem with those frameworks.

The Customer Framework retains current practice under which most customers pay both network charges of the distributor and retail charges to their retailer under the customer retail contract.

Obligation to offer connection services

The Bill includes an obligation on a distributor (both electricity and gas) to provide customers services such as new connections, connection alterations and ongoing supply services under a direct contractual relationship. This obligation to offer is an essential obligation on distributors which mirrors and supports the obligation on retailers to have a standing offer to sell energy to small customers. The obligation on distributors to provide customer connection services under the Bill is qualified to the extent that both distributors and customers must satisfy relevant requirements of the energy laws in the provision of those services.

Connection contracts

The Bill provides for three types of customer connection contracts: deemed standard connection contracts, which can apply for all customers; Australian Energy Regulator approved deemed contracts, which relate to classes of large customers; and negotiated connection contracts.

These contracts reflect that energy distributors are monopoly service providers and, in general, customers have limited ability to meaningfully negotiate the terms and conditions of their energy supply. As such, the deemed contracts which apply by force of law are either regulated as a model contract or approved by the Australian Energy Regulator to ensure they are fair and reasonable.

While individual negotiation of connection and supply arrangements is not generally required by most customers, the Bill recognises that negotiated contracts may be required particularly for larger business customers with specific connection needs. Where connection contracts are negotiated, the Customer Framework includes a negotiating framework in the National Electricity and Gas Rules. These additional Rules are enabled by amendments to the National Electricity Law and the National Gas Law made in the Statutes Amendment (National Energy Retail Law) Bill 2010). The negotiating framework for connection will ensure customers' interests are protected and customers receive adequate time and information to consider any proposed arrangements.

The Customer Framework imposes direct obligations on customers to ensure distributors' connection assets on their property are treated appropriately and access to premises for meter reading is given where necessary. Distributor obligations include requirements prior to disconnection such as giving a warning notice, and notice requirements to customers of planned interruptions that may affect supply to the customers' premises.

Life support

As continued access to energy is a critical issue for customers who use life support equipment, this Bill contains strong protections for customers with life support equipment in their homes or other premises.

Where a customer informs their retailer or distributor that a person residing at premises requires life support, the Customer Framework requires both the retailer and the distributor to keep a register of premises where life support equipment is in use and will stipulate that distributors must not disconnect these registered premises. The Customer Framework also ensures that these customers are afforded every opportunity to guard against the risk of unavoidable supply interruptions, such as during an emergency supply outage.

The National Connections Framework

As I have indicated, the Customer Framework before us today also includes a national connections framework. This framework is provided for in the accompanying Statutes Amendment (National Energy Retail Law) Bill 2010.

The connection framework is to be inserted into the National Electricity Rules and the National Gas Rules, for retail customers seeking new connections or alterations to existing connections to electricity and natural gas distribution networks. Recognising that many new connections are arranged by property developers before retail customers move in, arrangements are also included to enable property developers to apply for one or multiple connections.

Each project for a new connection or modification of an existing connection will not be identical. For example, the distance of premises from existing infrastructure will vary. However, a large number of new connections and modifications will have common features, such as the type of assets needed to connect or modify.

To accommodate these similarities, the framework establishes two broad types of service offerings: basic connections and standard connections. Basic connection services are services that involve no or only minimal augmentation of the network or pipeline and are likely to be sought by a significant number of retail customers within the distributor's service area.

Under the framework, each distributor must have at least one model standing offer for each class of basic connection services it provides. Electricity distributors must also define at least one standing offer for the basic connection services it provides for micro-embedded generators (for example, rooftop solar panels). A model standing offer is a template offer, describing the terms and conditions which will apply to the connection, such as the circumstances in which charges are payable and how they will be calculated and the timeframe in which work will be completed.

Distributors may also provide model standing offers for standard connection services for other categories of connection that, while not likely to be sought by a significant class of customer, are still common to different classes of customers within their area.

To provide for differences across distribution areas, each distributor is responsible for developing its own basic and standard connection service offerings. However, to ensure the proposed model terms and conditions for these offers adhere to the requirements of the framework, model standing offers must be approved by the Australian Energy Regulator before being offered to customers.

The framework sets out an enquiry and application process with prescribed response times to ensure customers enquiring about new or altered connections receive timely information to assist them in making an application. For a straightforward basic or standard connection, an 'expedited' process is available. This allows the customer to state from the outset that they accept the distributor's model standing offer, to enable straightforward connections to be competed as quickly as possible.

The Customer Framework ensures new terms and conditions of new or altered connection offers integrate with the customer connection contracts under the National Energy Retail Law. This means customers will have a single contract with their distributor covering both their new or altered connection and ongoing supply.

The national connection regime also contains a negotiating framework for retail customers seeking non-standard connections or connection alterations. While this is expected to apply mainly to larger connection applicants, customers seeking basic or standard connection services may also elect to adopt this negotiation framework. An application and offer process with prescribed response times is also prescribed under the rules.

The national connections regime includes provisions for the process and cost of new connections and connection modifications. Importantly, the connection charging regime also integrates with the existing economic regulation of networks under the National Electricity Rules and the National Gas Rules. For electricity, to ensure connection charges for retail customers and property developers are broadly consistent across networks and align with distributor determinations, distributors must submit a connection policy as part of each regulatory proposal, for approval by the Australian Energy Regulator.

A distributor's model standing offer for a new or altered connection must be consistent with its distribution determination, including its connection policy.

In turn, the connection policy must be consistent with connection charge principles under the Rules and connection charge guidelines, to be developed by the Australian Energy Regulator. The guidelines will establish principles for fixing a threshold below which retail customers will be exempt from any requirement to pay connection charges for any upstream augmentation necessary to make the connection. In this way, smaller or more typical retail customers will not be paying directly for upstream augmentation in respect of their connection.

In developing the electricity connection charging guidelines, the Australian Energy Regulator must have regard to the inter-jurisdictional differences related to regulatory control mechanisms, classification of services and other relevant matters. The Australian Energy Regulator's consideration of established practices in jurisdictions will provide a useful benchmark in developing these guidelines, and will go a long way in ensuring a relatively smooth transition for all to the new arrangements for new or altered connections.

For gas, there will be connection charges criteria to provide detail on the methodology for calculating connection charges and ensuring that distributors take into account the revenue they will receive over time from supplying gas to the premises and do not seek to recover this upfront when the connection is made.

Finally, the regime ensures that all connection applicants under the Customer Framework have access to dispute resolution, whether to the relevant energy ombudsman (for small customers) or to the Australian Energy Regulator. To facilitate this, recently-made regulations waive the access dispute fees of the Australian Energy Regulator for gas customers consuming less than 1 terajoule of gas per annum, and for electricity customers consuming less than 750 megawatt hours of electricity per annum, which will enhance such customers' ability to use this mechanism.

Small Compensation Claims Regime

The Bill also includes a Small Compensation Claims Regime (the 'small claims regime') which is designed to provide small customers with small claims a low cost and effective way to obtain compensation for (mainly) damage to their property without needing to prove negligence.

The Bill allows the small claims regime to operate in those States and Territories that choose to implement it. This provides flexibility and recognises that not all jurisdictions may be in a position to adopt the regime based on existing practices. Some distributors already operate similar voluntary schemes while other jurisdictions impose a regulatory requirement on distributors to do so. The small claims regime in the Customer Framework has been designed to enable a State or Territory to define in its local instrument what a claimable incident and compensable matter are in that jurisdiction, to accommodate differences.

The small claims regime in this Bill enables a small customer to refer a small claim for compensation to their distributor to be assessed, processed, and if appropriate, compensated. The types of small claims that typically arise involve damage to electrical and electronic goods such as televisions and computers. The small claims regime provides the framework for the resolution of small claims in a way that does not involve a distributor having to admit fault, negligence or bad faith, and which is efficient and simple to understand.

In addition to the consumer protection aspect, the small claims regime provides an incentive for distribution businesses to actively manage their quality of supply rather than pay compensation for potentially avoidable incidents. Further, it assists distribution businesses with their management of liability by reducing the need for small customers to potentially seek legal action for damage and instead offers small customers an uncomplicated tool to claim compensation. Lastly, it reduces the burden of dispute resolution involving property damage through jurisdictional ombudsman schemes as small customers can deal directly with the distribution business and need only involve the energy ombudsman if they are dissatisfied with the outcome of a claim.

Small Customer Complaints and Dispute resolution

This Bill includes robust arrangements for the handling of complaints and disputes from small customers by energy retailers and distributors. It also supports and facilitates the role of jurisdictional energy ombudsman schemes as external dispute resolution bodies.

Retailers and distributors must publish on their websites a set of procedures (their 'standard complaints and dispute resolution procedures'), for responding to small customer complaints. These procedures must be consistent with the applicable Australian Standard on complaint handling.

A retailer or distributor will also be required to handle a customer complaint in accordance with its published procedures, and to advise the customer in a timely way of the outcome of their complaint, including any reasons for its decision.

A customer must also be informed that if the customer is not satisfied with how their retailer or distributor has handled their complaint, they can refer the matter to the energy ombudsman in their State or Territory, and the retailer or distributor must provide the customer with the contact details of the energy ombudsman.

The Bill also includes a requirement for each retailer and distributor to be a member of an energy ombudsman scheme for each jurisdiction in which the retailer or distributor sells or supplies energy to small customers or engages in marketing to small customers, and to comply with the requirements of that scheme.

The Bill seeks to ensure that while the energy ombudsman schemes themselves operate according to their own jurisdictional laws or constitutional arrangements, the schemes are able to receive, investigate and resolve small customer complaints and disputes that may arise under the Customer Framework.

Retailer authorisation

Under this Bill there will be a national energy retailer authorisation regime for the first time. A party will be prohibited from selling energy to customers unless it has obtained a retailer authorisation from the Australian Energy Regulator, or has been exempted by the Australian Energy Regulator from this requirement. The regime works to ensure that only businesses which can demonstrate their capacity and suitability to meet their obligations in selling energy can operate in the energy retail sector. The retailer authorisation regime is one mechanism in the Customer Framework to minimise the risk of non-compliance or failure by a retailer, and the impacts of any such failure on the energy markets and customers.

The Bill gives the Australian Energy Regulator regulatory functions and powers to grant or refuse a retailer authorisation application. The Bill also sets out the entry criteria that an applicant must meet when applying for a retailer authorisation. These entry criteria include demonstrating to the Australian Energy Regulator that the business has the organisational and technical capacity, financial resources and demonstrated suitability to meet the regulatory obligations of a retailer and therefore to hold an authorisation.

The Bill further provides that, in considering the suitability of a retailer for authorisation, the Australian Energy Regulator will take into account any relevant matters, including the previous commercial dealings of the applicant and its associates and the standards of honesty and integrity shown in previous commercial dealings of the applicant and its associates.

This regime differs from jurisdictional licensing regimes, including South Australia's current regime, because the national retailer authorisation does not use conditions on the authorisation to impose ongoing requirements on retailers. Rather, authorised retailers must comply with direct obligations under the various energy laws.

However, as a means to ensure compliance with the Customer Framework, the Australian Energy Regulator will also have the power to revoke a retailer's retail authorisation should the Australian Energy Regulator be satisfied that a retailer is unable to meet its obligations under the Law, Regulations or Rules.

This Bill requires the Australian Energy Regulator to develop guidelines, in consultation with relevant organisations, to provide potential applicants with guidance if they wish to apply for a retailer authorisation and if they wish to transfer, vary or surrender their authorisation.

Exempt Sellers Regime

Not all businesses that sell energy can or should be required to obtain a retailer authorisation and comply with the full range of obligations on retailers contained in the Customer Framework. This Bill provides the Australian Energy Regulator with the power to grant an exemption to a person or class of persons, known as exempt sellers. Given the costs and obligations that holding a retailer authorisation entails, small entities such as caravan parks, which on-sell incidental amounts of energy may need to be exempted from the requirement. Other unique situations may also require special arrangements.

The Bill therefore provides for 3 types of exemptions. The first is individual exemptions which would be granted on a case-by-case basis, taking into account the particular circumstances of an individual seller. The second type of exemption is a class of registered exemptions which the Australian Energy Regulator determines, and particular sellers who fall within that class of sellers must register with the Australian Energy Regulator to have the benefit of the exemption. The third type of exemption is a deemed exemption. The Australian Energy Regulator will determine and publish classes of sellers who fall within the class. These will be the small operators for whom it is inefficient to identify each individual seller.

Exempt sellers may be subject to conditions imposed by the Australian Energy Regulator which are enforceable as if they were Rules. The Bill gives clear policy guidance to the Australian Energy Regulator when it is determining classes of registrable or deemed exemptions, assessing an individual exemption, or imposing conditions on an exemption. The Australian Energy Regulator must have regard to both overarching policy principles and more targeted exempt seller related factors and customer related factors.

The exemptions framework set out in the Bill has been designed to recognise the wide variety of supply arrangements that exist and ensure the Australian Energy Regulator has flexibility to apply obligations to exempt sellers which protect the interests of the exempt seller's customers and are appropriate to the seller's individual circumstances.

Retailer of Last Resort Scheme

I have already mentioned one of the key elements of the Bill is the institution of a national RoLR framework, which will replace existing jurisdictional RoLR schemes for electricity and gas. The RoLR arrangements have been subject to extensive separate consultation, to ensure that the institutional arrangements are sound.

A RoLR scheme provides security to customers by ensuring the continuity of supply if their retailer happens to fail or exit the market without making arrangements for continued sale and supply of energy to its customers. A RoLR event can be invoked for a range of reasons, including the suspension of a retailer from a wholesale exchange for energy or insolvency of the retailer.

A retailer failure in this situation also has a major flow-on effect as the Australian Energy Market Operator would not be able to settle the wholesale markets for energy consumed. The national RoLR scheme therefore incorporates backup arrangements to ensure the integrity of the relevant market's financial settlements in the event of a retailer failure, and thus protect customers.

The national RoLR scheme provides for the identification of retailers who will become responsible for the customers of a failed retailer and continue to supply electricity and/or gas to those customers. The arrangements establish the practices and procedures to be followed prior to, during and after a RoLR event.

The Australian Energy Regulator is charged with the role of registering and appointing retailers of last resort. Registered RoLRs may, if a RoLR event occurs, be appointed as a retailer of last resort for affected customers. Retailers may volunteer to be registered, or the Australian Energy Regulator may require them to become a RoLR by making them a default RoLR. The Australian Energy Regulator must have regard to the RoLR criteria in registering or appointing a RoLR, which pertain to the operational and financial capacity of the retailer.

The arrangements require the Australian Energy Regulator to notify, or ensure the notification of, all affected parties when a RoLR event occurs, through a RoLR notice. The Australian Energy Regulator is empowered to make plans which will set out how the various parties, such as distributors, retailers and the Australian Energy Market Operator should interact to deal with a RoLR event. These arrangements will include notification to affected customers of what will occur.

The Australian Energy Regulator is empowered to require information from retailers under the RoLR regulatory information provisions, to ensure that it is fully informed and able to ensure the effective transfer of customers to the RoLR if a RoLR event occurs. To deal with the possibility that the failed retailer may be insolvent and unable to provide information, a failed retailer's insolvency official may be requested to provide necessary information to the Australian Energy Regulator.

The regulatory information provisions are modelled on those established under the National Gas Law, with the exception that there is no provision for issuing general Regulatory Information Orders, as this is not appropriate to the RoLR context. Therefore only Regulatory Information Notices are provided for. There are other modifications that reflect the likely urgency of issuing these Regulatory Information Notices in the context of an actual or imminent retailer failure.

The Australian Energy Regulator is further empowered to act to investigate the potential for a RoLR event to occur. This is provided through the Australian Energy Regulator's powers in relation to contingent events. Under these powers the Regulator may inquire into the financial position of retailers, consult with the Australian Energy Market Operator, disclose information to relevant parties and notify the Australian Energy Market Operator and jurisdictional Ministers if it believes that there is a risk of a RoLR event. These powers are necessary to ensure that customer security of supply is preserved and not compromised by the threat of retailer failure.

The Australian Energy Regulator may also inquire with one or more registered RoLRs as to whether they wish to be appointed should a RoLR event occur to streamline the appointment process that will be undertaken following an actual RoLR event. All actions taken by the Regulator under contingent events are subject to confidentiality protections to ensure the regulator's investigations do not of themselves trigger a RoLR event by causing uncertainty in the market.

Arrangements are also made for the recovery of the costs associated with RoLR events by RoLRs and distributors.

In the case of RoLRs, these will be set out in a cost recovery scheme determined by the Australian Energy Regulator. The cost recovery scheme approved by the Australian Energy Regulator must allow the RoLR to recover the reasonable costs associated with the scheme.

The cost recovery process will occur through the Australian Energy Regulator requiring distributors to make payment to a RoLR in accordance with their liability under the RoLR cost recovery scheme. Distributors will then have the ability to pass costs through to retailers via their distribution price determination or access arrangement, effectively providing for all customers to contribute to the costs of the scheme, recognising that it provides a service to the whole of the market.

In the gas sector, further arrangements are also necessary to ensure that RoLRs are able to access sufficient gas and pipeline capacity to fulfil their required role for the duration of their obligations. To this end, if there is otherwise insufficient capacity or gas available to the RoLR, gas pipelines and shippers are required to provide capacity and gas to the RoLR on terms and conditions which are comparable to those generally available in the market. The Australian Energy Regulator will be empowered to determine these terms and conditions, and to hear disputes with pipeline operators as access disputes under the National Gas Law. RoLRs will be required to enter into negotiations to purchase replacement contracts going forward and, if they are unable to conclude those negotiations, capacity and gas must be auctioned by those that hold it.

The Bill provides arrangements under which affected customers will be supplied after a RoLR event. In the case of small customers, they will be subject to a deemed supply arrangement on standard terms and conditions. Large customers will be supplied on terms and conditions that must be published by registered RoLRs.

As these arrangements are in the nature of emergency powers to deal with a substantial market failure, it is necessary that they be fully enforceable and actionable. Therefore, statutory immunity is provided to the Australian Energy Regulator, Australian Energy Market Operator, RoLRs and distributors as well as their staff in carrying out their roles. Further, the regime provides for the displacement of some provisions of the Corporations Act 2001 (Commonwealth) to ensure there is no doubt of the primacy of the RoLR scheme.

Recent experience has revealed a number of ways in which customers can be adversely affected by being transferred to a RoLR. Therefore, the Bill includes provisions to ensure that the failed retailer or its insolvency official honours customer payment plans, returns security deposits to customers, returns any prepaid credit to customers, and cancels direct debit and Centrepay arrangements with the failed retailer.

Retailer-Distributor Relationship

This Bill recognises that distributors and retailers have direct obligations to their shared customers under the Customer Framework. To serve their customers, distributors and retailers must freely exchange information and coordinate service delivery. It is also necessary that there are uniform and predictable billing and payment requirements between distributors and retailers. To date, these mutual 'retail support' obligations have been contained in jurisdictional regimes under a variety of instruments.

The new Customer Framework sets these requirements out clearly in rules made under the National Electricity Law, the National Gas Law and National Energy Retail Law. The heads of power for the making of these Rules are contained in the National Energy Retail Law and in the accompanying Statutes Amendment (National Energy Retail Law) Bill 2010. The rights and obligations on retailers and distributors are direct regulatory obligations that are even handed and fair to both of them.

Credit support

The retailer-distributor arrangements in the Customer Framework include credit support rules which provide for retailers to give guarantees to distributors, known as credit support, to guard against the risk of retailer default on payment of network charges, in turn protecting customers from bearing the cost of a default.

The credit support provisions represent a balanced and proportionate requirement on retailers which takes into account their creditworthiness and the risk posed by a retailer to any given distributor. The proportionate arrangements will lower barriers to entry and expansion by retailers into new distribution areas, and thereby encourage competition between retailers nationally.

The credit support rules will effectively require distributors to act prudently in obtaining appropriate levels of credit support from a retailer under the rules. Distributors will be able to pass through certain unpaid network charges to customers, but customers will not be required to pay to the extent a distributor has not taken reasonable steps to obtain credit support from a retailer where it is entitled to do so under the rules.

Appropriately, the credit support arrangements provide incentives for retailers to improve their credit worthiness, and provide incentives for distributors to efficiently manage their risk exposure.

Ministerial Council on Energy role and functions

As provided for in the Australian Energy Market Agreement, the Ministerial Council on Energy will be the national policy and governance body for the Australian energy market, including the Customer Framework.

The Bill reflects similar functions and powers for the Ministerial Council on Energy as those set out under the National Electricity Law and National Gas Law. Firstly, the Ministerial Council on Energy may direct the Australian Energy Market Commission to carry out a review and report back to Ministers. Such a review may result in the Australian Energy Market Commission making recommendations to the Ministerial Council on Energy in relation to any relevant changes to the National Energy Retail Rules that it considers are required. Secondly, the Ministerial Council on Energy may initiate a Rule change proposal. This may, for example, be the result of a review carried out by the Australian Energy Market Commission as a result of a request by the Ministerial Council on Energy. Thirdly, the Ministerial Council on Energy may publish statements of policy principles in relation to the Australian Energy Market Commission's rule making and review functions under the new Customer Framework.

Australian Energy Market Commission role and functions

The Australian Energy Market Commission is the rule making body for the current National Electricity Rules and the National Gas Rules. The Commission will have a similar role under this Bill for the National Energy Retail Rules. The Australian Energy Market Commission will assess Rule change proposals which have been initiated by the Ministerial Council on Energy, the Australian Energy Market Operator, industry participants and energy users including retail customers, in accordance with its rule making procedures.

In so far as its review function is concerned, the Australian Energy Market Commission must conduct reviews as directed by the Ministerial Council on Energy into matters such as the sale and supply of energy to customers and the operation and effectiveness of the National Energy Retail Rules. The Australian Energy Market Commission may itself decide to conduct reviews into the operation and effectiveness of the Rules.

The Australian Energy Market Commission will be required to have regard to the National Energy Retail Objective in performing its functions under the Customer Framework. Further guidance has been set out in this Bill for the Australian Energy Market Commission when making a rule, which I will say more about shortly.

Further, the Australian Energy Market Commission must have regard to any relevant Ministerial Council on Energy statements of policy principles in making a rule change or conducting a review into any matter relating to the National Energy Retail Rules.

Australian Energy Regulator role and functions

The Australian Energy Regulator is a Commonwealth statutory body under the Trade Practices Act 1974 (Commonwealth). The Australian Energy Regulator is the primary regulator under the National Electricity Law and the National Gas Law in all jurisdictions except Western Australia. Under this Bill, the Australian Energy Regulator will have similar powers to regulate, and ensure compliance by, retailers and distributors under the Customer Framework.

The Bill requires the Australian Energy Regulator to exercise key functions under the Customer Framework in a manner that will contribute to the achievement of the national energy retail objective, and where relevant, in a manner that is compatible with the development and application of consumer protections for small customers, including (but not limited to) protections relating to hardship customers. These key functions include approval of applications for retailer authorisations, administering the national exempt seller's framework, and regulating the Retailer of Last Resort regime.

The Australian Energy Regulator has a number of new approval functions which include approving Customer Hardship Policies of retailers and deemed customer connection contracts for large customers which a distributor may choose to submit. Under the new connections framework, the Australian Energy Regulator will also have an approval role in relation to various connection offerings of distributors.

Enforcement

The enforcement regime in this Bill reflects the current enforcement regimes in the National Electricity Law and the National Gas Law to create a harmonised enforcement regime across the legislative frameworks. The existing general compliance and enforcement regimes for the energy sector empower the Australian Energy Regulator to do the following—

generally monitor compliance with the Law, Regulations and Rules and investigate breaches.

seek a range of remedies in Supreme Courts and the Federal Court to enforce the obligations in the regime (for example injunctions and declarations).

seek civil penalties where applicable.

serve an infringement notice which, if paid, would avoid Court proceedings.

This Bill, together with amendments to the National Electricity Law and the National Gas Law included in the accompanying Statutes Amendment (National Energy Retail Law) Bill 2010, establish for the first time a power for the Australian Energy Regulator to accept enforceable undertakings from energy market participants. This type of administrative remedy gives the Regulator an alternative tool in achieving compliance to having to proceed straight to court action. This type of regime for enforceable undertakings is similar to the power which the Australian Competition and Consumer Commission has under the Trade Practices Act 1974 (Commonwealth).

In addition, the Bill incorporates a conduct provision regime in relation to certain specified obligations owed by retailers to distributors and vice versa. This regime has been included to enable retailers and distributors to take direct action against the other party where appropriate.

Obtaining and using information

This Bill adopts key general information gathering powers currently available to the Australian Energy Regulator under the National Gas Law and National Electricity Law. The Bill gives the Australian Energy Regulator the ability to obtain information or documents from any person where such information or documents are required by the Australian Energy Regulator for the purpose of performing or exercising any of its functions and powers. The usual protections apply for the various categories of confidential information.

The Customer Framework makes certain that there is no duplication for industry participants in providing information to the Regulator. Similarly, the Australian Energy Regulator will have flexibility in the way in which it may use and report information provided to it. This Bill expressly states that information provided under any of the three national energy regimes can be used for the purposes of any of those regimes. Similarly, the Australian Energy Regulator may combine into single documents reports and guidelines that cover similar subject matters across the three regimes. This will save both costs and red tape for stakeholders.

New compliance regime for the retail sector

This Bill contains a targeted compliance framework which applies to retailers and distributors who are subject to the Customer Framework. Retailers and distributors must have policies, systems and procedures to enable them to efficiently and effectively self-monitor their own compliance.

An effective compliance monitoring and reporting regime must be supported by the free flow of information to the Australian Energy Regulator, and retailers and distributors will be obliged to provide information relating to specific matters relevant to the Customer Framework and listed in Compliance Procedures and Guidelines developed and published by the Australian Energy Regulator.

The Bill has a clear compliance auditing regime which sets out how the Australian Energy Regulator may initiate such audits. Compliance audits can assess compliance by a retailer or a distributor with its obligations under the National Energy Retail Law, the Regulations or the Rules.

The Bill mandates an annual compliance report to be prepared and published by the regulator which will include both the monitoring activities of the Australian Energy Regulator during the year and the compliance of retailers and distributors, in particular, in relation to energy marketing.

New performance reporting for the retail sector

The full benefits of a national energy retail market will become evident if there is effective competition in the retail sector, such that customers are able to share in the benefits of an efficiently run energy market.

Consumers, businesses and government require access to quality information on the development and efficacy of the retail market. Therefore, this Bill empowers the Australian Energy Regulator to gather information and publish a Retail Market Performance Report annually.

This annual report will include both a retail market overview and a retail market activities review for the year. The overview will include information on the number of retailers actively selling energy to customers and customer numbers of each retailer. It will also indicate the total number of customers on standard retail contracts and market retail contracts for small customers and by reference to each retailer. The report will cover transfer activities between retailers and energy affordability for small customers.

The annual retail market performance report will also report on retail market activities. This includes information and statistics on customer service and customer complaints as well as the handling of customers experiencing payment difficulties, (distinguishing hardship customers). In addition, the report will detail activities relating to prepayment meters, disconnection and reconnection for non-payment of bills, energy concessions and rebates for customers (where these are administered by retailers) and security deposits held by retailers.

Importantly, this Bill requires the Australian Energy Regulator to develop, in consultation with stakeholders, hardship program indicators which cover entry into and participation in, hardship programs and assistance available to customers under customer hardship policies.

The Bill expressly states that compliance audits may be carried out in relation to a retailer's compliance with the obligation of retailers in relation to hardship customers and the implementation by a retailer of its own customer hardship policy.

The Bill also enables the Australian Energy Regulator to conduct performance audits of energy retailers against these hardship program indicators. This will allow the regulator to assess whether vulnerable customers are being well served by a retailer's customer hardship policy and the retail market generally.

National Energy Retail Rules

This Bill enables the making of the initial National Energy Retail Rules on the recommendation of the Ministerial Council on Energy, by a Ministerial notice. However, the introduction of the Customer Framework differs from previous national energy reforms in that the Customer Framework will not commence in any jurisdiction (including South Australia) immediately upon enactment by the South Australian Parliament.

Commencement will occur in each jurisdiction when the jurisdiction applies the package of Laws and Rules. The Australian Energy Market Commission will only assume its responsibilities for rule making when commencement of the Customer Framework first occurs in any jurisdiction. Therefore, during the pre-commencement period (between enactment in South Australia and application in any jurisdiction), the various national Rules made by the South Australian Minister remain the responsibility of the Minister. Should it become evident as part of jurisdictional implementation that any adjustments are needed to the initial Rules made by the Minister prior to jurisdictional commencement, the Laws provide a residual power that would allow the Minister to make necessary and consequential changes to the initial Rules, but only up until commencement by any one jurisdiction. Any such changes made by the South Australian Minister during this period must first be approved by the Ministerial Council on Energy.

Subject to any transitional arrangements applied during jurisdictional implementation of the Customer Framework, the Australian Energy Market Commission will assume responsibility for these national rules on the date of commencement of the Customer Framework in any one jurisdiction, and the rules will be subject to change in accordance with the Rule change process from that date onwards.

The Bill has the same rule change process for the Australian Energy Market Commission as the National Electricity Law and National Gas Law. The Australian Energy Market Commission may make a rule after the Rule change procedure has been followed if it is satisfied that the rule will, or is likely to, contribute to the achievement of the national energy retail objective.

The Australian Energy Market Commission rule change process set out in the Bill is transparent and involves the opportunity for significant input by stakeholders. Thorough consultation must be carried out on rule changes, with requirements for fully reasoned draft and final determinations. The 'fast track' amendment procedure (which proceeds straight to a draft determination) is also available where adequate prior consultation has been undertaken.

The Bill contains the rule making test which requires the Australian Energy Market Commission to satisfy itself that the Rule will or is likely to contribute to the achievement of the national energy retail objective and allows the Australian Energy Market Commission to give weight to any aspect of the objective as it considers appropriate in the circumstances. The Commission must, in the context of the Customer Framework, to do so in a way that is compatible with the development and application of consumer protections for small customers, including (but not limited to) protections relating to hardship customers.

Regulations made under the National Energy Retail Law

National Regulations may be made for the Customer Framework under this Bill. As with previous practice with the Regulations made under the National Electricity Law and National Gas Law, the Regulations will not be a vehicle to implement matters of substance, but rather matters of a more machinery nature requiring some degree of flexibility but which needs to be within the decision making power of the Ministerial Council on Energy. The Regulations prescribe civil penalty provisions, a list of jurisdictional energy ombudsman schemes; a list of current jurisdictional regulators and the national consumption thresholds for small business customers. The regulations are also likely to be used for transitioning from jurisdictional frameworks to the national customer framework, but these transitional regulations do not form part of this Regulation. An important safeguard is that Regulations can only be made with the unanimous agreement of all relevant Ministerial Council on Energy Ministers.

Application of the Bill in South Australia

From South Australia's perspective, the passage of this Bill will not result in an immediate transition to the national framework. Instead, consequential amendments to the current South Australian energy legislative instruments resulting from the application of this Bill will be prepared and presented to Parliament at a later time. These amendments will include South Australian specific obligations on energy retailers and distributors where it is considered necessary, an example of which will be a requirement on some retailers to comply with the Residential Energy Efficiency Scheme. These South Australian specific obligations will complement the Bill that is being introduced here today to form a sound regulatory framework for energy market participants and energy consumers in South Australia.

It is anticipated that South Australia will commence implementation of the national framework under this Bill if the consequential amendments to existing legislative instruments are passed by Parliament. Most important is the Government's continued commitment to price regulation in South Australia which will be maintained post implementation of this national framework with any necessary transitional arrangements forming part of the consequential amendment package.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause sets out the short title of the measure.

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—Interpretation

A key aspect of the definitions under the Act is that there will be a point of distinction between the National Energy Retail Law, being a law to be applied in the jurisdiction of the scheme participants, and the National Energy Retail Law (South Australia), being the National Energy Retail Law as it applies in this State. The clause also provides that definitions included in the law (as applying because of this measure) also apply for the purposes of the Act.

Part 2—Application of National Energy Retail Law

4—Application of National Energy Retail Law

This clause provides that the National Energy Retail Law set out in the Schedule will not apply in this jurisdiction until a day fixed by the Governor by proclamation made under this provision. The reason for drafting this provision in this way is that the Bill has to address the possibility that the Schedule will need to be brought into operation for the purposes of the laws of one or more other jurisdictions before the National Energy Retail Law is to be applied to South Australia. From the day fixed for the application of the National Law in this jurisdiction, the National Law will apply and the applied law may be referred to as the National Energy Retail Law (South Australia).

5—Application of regulations under National Energy Retail Law

From the day fixed under clause 4(1), the regulations in force for the time being under the National Law will apply as regulations in force for the purposes of the National Energy Retail Law (South Australia). These regulations are to be referred to as the National Energy Retail Regulations (South Australia).

6—Interpretation of certain expressions

In the National Energy Retail Law (South Australia) and the National Energy Retail Regulations (South Australia), references to the National Law or to 'this Law' will be references to the National Energy Retail Law (South Australia) and references to 'the jurisdiction' or 'this jurisdiction' will be references to South Australia.

7—Exclusion of legislation of this jurisdiction

In view of the interjurisdictional application of the National Law, it is appropriate to provide for the exclusion of certain Acts.

Part 3—Related matters

8—Conferral of functions and powers on Commonwealth bodies to act in this jurisdiction

This clause provides for the Australian Energy Regulator 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 energy retail legislation of another participating jurisdiction.

9—Extension of reading-down provision

This clause provides that a provision of the proposed Act is to be construed so as not to exceed the legislative powers of the Parliament, in particular with respect to a provision that appears to impose a duty on a Commonwealth officer or body.

10—Regulation-making power for purposes of National Retail Energy Law (South Australia)

This clause authorises the Governor to make such regulations, including regulations constituting local instruments, as are contemplated by the National Energy Retail Law (South Australia) as being made under this measure as the application Act of this jurisdiction.

Part 4—Provisions applying in South Australia as host jurisdiction

11—Interpretation

This clause provides that for the purposes of this Part a reference to the National Energy Retail Law is a reference to the law, as amended from time to time, set out in the Schedule.

12—Regulations

This clause authorises the Governor to make the regulations that are to be made under the National Energy Retail Law. The Governor will be able to act under this clause even if the National Energy Retail Law is yet to apply in this jurisdiction under the scheme set out in clause 4.

13—Minister authorised to exercise powers under the national scheme

This clause authorises the Minister to make rules under the National Energy Retail Law or as provided by amendments to the National Electricity Law or the National Gas Law by the Statutes Amendment (National Energy Retail Law) Act 2010. This clause also makes it clear that if the national energy retail legislation of another jurisdiction confers a function or power on the Minister, the Minister may perform that function or exercise that power.

14—Exclusion of legislation of this jurisdiction

In view of the interjurisdictional application of the regulations and rules made under the National Law, it is appropriate to exclude the application of the Subordinate Legislation Act 1978.

Schedule 1—National Energy Retail Law

Part 1—Preliminary

Division 1—Citation and interpretation

1—Citation

This clause provides that this Law may be cited as the National Energy Retail Law.

2—Interpretation

This clause sets out definitions used in the Law.

3—Application of Law, National Regulations and Rules in this jurisdiction

This clause states that this legislation can only apply in a jurisdiction by an application Act.

4—Meaning of civil penalty provision and conduct provision

This clause outlines the provisions which apply a civil penalty.

5—Meaning of customer and associated terms

This clause defines a customer for the sale of energy to premises or, the customer purchases energy from a retailer. The customer is either a residential or business customer.

6—Provisions relating to consumption thresholds for business customers

This clause states the regulations will specify the consumption thresholds for business customers.

7—Classification and reclassification of customers

This clause permits the Rules to make provision for or with respect to the classification or reclassification of customers.

8—Interpretation generally

This clause applies Schedule 2 to the National Gas Law to the Law, the National Regulations and the Rules.

Division 2—Matters relating to participating jurisdictions

9—Participating jurisdictions

This clause identifies the participating jurisdictions for the purposes of the Law.

10—Ministers of participating jurisdictions

This clause identifies the Ministers of the jurisdictions administering the Law.

11—Local area retailers

This clause requires a participating jurisdiction to make regulations nominating a local area retailer or retailers.

12—Nominated distributors

This clause allows a participating jurisdiction to make regulations nominating a local area distributor or distributors.

Division 3—National energy retail objective and policy principles

13—National energy retail objective

This clause states the objective of the Law.

14—MCE statements of policy principles

This clause allows the Ministerial Council on Energy (MCE) to issue statements of policy principles for the Australian Energy Market Commission (AEMC) that are relevant to the performance and exercise of its functions.

Division 4—Operation and effect of National Energy Retail Rules

15—Rules to have force of law

This clause provides for the Rules to have the force of law in each of the participating jurisdictions.

Division 5—Application of this Law and the Rules to forms of energy

16—Application of Law and Rules to energy

This clause applies the Law and the Rules to the sale and supply of electricity or gas to customers, to a retailer (to the extent it sells electricity or gas or both) and to a distributor (to the extent its distributes electricity or gas or both).

Division 6—Miscellaneous

17—Extraterritorial operation of Law

This clause provides for the extra territorial operation of the legislation.

18—Law binds the State

This clause provides that the legislation binds the State.

Part 2—Relationship between retailers and small customers

Division 1—Preliminary

19—Application of this Part

This clause specifies how Part 2 of the Law applies to the relationships between retailers and their customers.

Division 2—Customer retail contracts generally

20—Kinds of customer retail contracts

This clause identifies the two kinds of contracts under which a retailer may provide customer retail services to small customers.

Division 3—Standing offers and standard retail contracts for small customers

21—Model terms and conditions

This clause requires the Rules to set out the model terms and conditions for standard retail contracts.

22—Obligation to make offer to small customers

This clause requires a designated retailer to make a standing offer to small customers at its standing offer prices, and under the retailer's form of standard retail contract.

23—Standing offer prices

This clause requires a retailer to publish its standing offer prices on its website and allows for the price to be varied in accordance with certain requirements.

24—Presentation of standing offer prices

This clause requires the standing offer prices to be presented in accordance with the Australian Energy Regulator (AER) Retail Pricing Information Guidelines.

25—Adoption of form of standard retail contract

This clause requires a retailer to adopt a form of standard retail contract and publish it on the retailer's website, and specifies how alterations may be made.

26—Formation of standard retail contract

This clause specifies when a standard retail contract takes effect between a retailers and a small customer.

27—Obligation to comply with standard retail contract

This clause requires a designated retailer to comply with the obligations imposed on it under the terms and conditions of a standard retail contract.

28—Variation of standard retail contract

This clause permits the retailer to make certain variations to the standard retail contract, and requires the retailer to make certain other variations.

29—Standard retail contract to be consistent with model terms and conditions

This clause provides that the terms and conditions of a standard retail contract will have no effect to the extent of any inconsistency with the model terms and conditions, and the model terms and conditions apply instead to the extent of any inconsistency.

30—Duration of standard retail contract

This clause provides that the standard retail contract will remain in force until it is terminated in accordance with the Law, the Rules or the contract.

31—Satisfaction of designated retailer's obligation to make standing offer by making market offer to certain small customers

This clause specifies how a designated retailer can satisfy its obligations to make a standing offer to a small market offer customer.

32—Rules

This clause provides for the Rules to make provision for or with respect to standard retail contracts.

Division 4—Market retail contracts for small customers

33—Formation of market retail contracts

This clause allows a small customer and a retailer to negotiate and enter into a market retail contract for retail services or any other services.

34—Minimum requirements for market retail contracts

This clause provides for the Rules to set out the minimum requirements for market retail contracts.

35—Variation of market retail contract

This clause provides that the process for varying a market retail contract must not be inconsistent with the Rules in relation to the variation of market retail contracts.

36—Market retail contract to be consistent with minimum requirements of the Rules

This clause provides that the terms and conditions of a market retail contract will have no effect to the extent of any inconsistency with any minimum requirements of the Rules, and the minimum requirements apply instead to the extent of any inconsistency.

37—Presentation of market offer prices

This clause requires a retailer to present its market offer prices in accordance with the AER Retail Pricing Information Guidelines and present those prices prominently on its website.

Division 5—Explicit informed consent

38—Requirement for explicit informed consent for certain transactions

This clause requires the retailer to obtain the explicit informed consent of a customer for certain transactions.

39—Nature of explicit informed consent

This clause sets out the requirements for a small customer to give explicit informed consent to a transaction and how the customer must give that consent.

40—Record of explicit informed consent

This clause requires a retailer to keep a record of each explicit informed consent given by a small customer for at least two years and specifies the format and content of the record.

41—No or defective explicit informed consent

This clause provides that any transaction that requires explicit informed consent is void to the extent that explicit informed consent was not obtained or was defective, and provides for the consequences of a void transaction.

42—Rules

This clause permits the Rules to make provision for or with respect to explicit informed consent in relation to small customers.

Division 6—Customer hardship

43—Customer hardship policies

This clause requires a retailer to submit a hardship policy to the AER for approval within three months of being granted a retailer authorisation and sets out the process for varying the policy.

44—Minimum requirements for customer hardship policy

This clause outlines the minimum requirements for a customer hardship policy.

45—Approval of customer hardship policy or variation

This clause requires the AER to approve a customer hardship policy or variation where the policy or variation meets certain requirements, having regard to certain principles, and allows the AER to request or make variations or alterations prior to the policy or variation.

46—Obligation of retailer to communicate customer hardship policy

This clause requires a retailer to advise a residential customer of its hardship policy where it appears the customer is having difficulty meeting payment due to hardship.

47—General principle regarding de-energisation (or disconnection) of premises of hardship customers

This clause requires a retailer to give effect to the principle that de-energising a hardship customer due to inability to pay energy bills should be as a last resort option.

48—Consistency of market retail contract with hardship policy

This clause provides that the terms and conditions of a customer's market retail contract are of no effect to the extent of any inconsistency with the retailer's customer hardship policy if that customer becomes a hardship customer.

49—Rules

This clause permits Rules to be made for or with respect to hardship customers and hardship policies.

Division 7—Payment plans

50—Payment plans

This clause requires a retailer to offer and apply payment plans to hardship customers and residential customers experiencing payment difficulties.

51—Debt recovery

This clause prevents a retailer from commencing debt recovery proceedings if the customer is meeting payment plan obligations, or if the retailer has failed to comply with its hardship policy and the Law and Rules relating to payment plans.

52—Rules

This clause permits Rules to be made for or with respect to payment plans for small customers.

Division 8—Energy marketing

53—Energy Marketing Rules

This clause allows Rules (called Energy Marketing Rules) to be made for the carrying out of energy marketing activities and requires any person carrying out energy marketing activities to comply with the Energy Marketing Rules.

Division 9—Deemed customer retail arrangements

54—Deemed customer retail arrangement for new or continuing customer without customer retail contract

This clause provides that a deemed customer retail arrangement is taken to apply between a financially responsible retailer and a move-in or a carry-over customer, except where the customer consumes energy at the premises by fraudulent or illegal means.

55—Terms and conditions of deemed customer retail arrangements

This clause provides that the terms, conditions and prices of a retailer's deemed customer retail arrangement are the terms, conditions and prices of its standard retail contract.

Division 10—Prepayment meter systems

56—Use of prepayment meter systems only in jurisdictions where permitted

This clause permits the use of prepayment meters only within jurisdictions where their use is permitted by a local instrument.

57—Contractual arrangements for use of prepayment meter systems

This clause requires a retailer to provide customer retail services using a prepayment meter under a market retail contract.

58—Use of prepayment meter systems to comply with energy laws

This clause requires a retailer to comply with the energy laws relating to the use of prepayment meter systems.

59—Persons on life support equipment

This clause provides that a retailer must not enter into a prepayment meter market retail contract with a small customer where the premises require life support equipment. A prepayment meter must be removed from such premises at no charge and replaced with a standard meter.

60—Rules

This clause permits Rules to be made for or with respect to retail services involving the use of prepayment meters.

Division 11—AER Retail Pricing Information Guidelines and price comparator

61—AER Retail Pricing Information Guidelines for presentation of standing and market offer prices

This clause allows the AER to make guidelines for the presentation of standing and market retail offers.

62—Price comparator

This clause requires the AER to develop and make available on its website the price comparator if and to the extent permitted by a local instrument of a jurisdiction.

63—AER information gathering powers for pricing guidelines and comparator

This clause requires a retailer to provide information and data to the AER relating to the retailer's market and standing offer prices and (if relevant) for the purposes of the price comparator.

Division 12—Large customers—responsibility for energy consumed

64—Large customer consuming energy at premises

This clause allows for retailers to charge and recover an appropriate amount from large customers in the event that an appropriate arrangement for the payment of charges relating to energy has not been entered into.

Part 3—Relationship between distributors and customers

Division 1—Preliminary

65—Application of this Part

This Part applies to the relationship between distributors and customers.

Division 2—Obligation to provide customer connection services

66—Obligation to provide customer connection services

A distributor must, subject to and in accordance with the energy laws, provide customer connection services in the circumstances provided for by this clause.

Division 3—Customer connection contracts generally

67—Kinds of customer connection contracts

The 3 kinds of customer connection contracts are set out in this clause.

Division 4—Deemed standard connection contracts

68—Model terms and conditions

The Rules will set out model terms and conditions for deemed standard connection contracts.

69—Adoption of form of deemed standard connection contract

A distributor is required to adopt a form of deemed standard connection contract in accordance with the requirements of this clause and publish it on the distributor's website. This obligation is a civil penalty provision.

70—Formation of deemed standard connection contract

This clause sets out when a contract in the form of a distributor's deemed standard connection contract under section 69 is taken to be entered into by the distributor and a customer.

71—Obligations to comply with deemed standard connection contract and to bill retailer

This clause requires a distributor to comply with the obligations imposed on it by a deemed standard connection contract between the distributor and a customer. Except in relation to a new or altered connection, the distributor must bill the retailer.

72—Variation of deemed standard connection contract

This clause provides for the circumstances in which a distributor may vary the terms and conditions of the distributor's form of deemed standard connection contract.

73—Deemed standard connection contract to be consistent with model terms and conditions

A deemed standard connection contract must be consistent with the model terms and conditions or any required alterations. If there is an inconsistency the model terms and conditions apply.

74—Duration of deemed standard connection contract

This clause provides for the duration of a deemed standard connection contract.

Division 5—Deemed AER approved standard connection contracts

75—Submission and approval of form of standard connection contracts for large customers

This clause provides for the submission by a distributor and approval by the AER of a standard connection contract applicable to one or more classes of large customers.

76—Formation of deemed AER approved standard connection contract

This clause provides for when a deemed AER approved standard connection contract is taken to be entered into by the distributor and a large customer of a class to which the approved form applies.

77—Amendment and replacement of form of deemed AER approved standard connection contract

A deemed AER approved standard connection contract may be amended or replaced by another deemed AER approved standard connection contract.

Division 6—Negotiated connection contracts

78—Negotiated connection contracts

A distributor is obliged to provide information and explanations to a small customer negotiating and entering into a customer connection contract, a negotiated connection contract, in accordance with the relevant requirements of the NER and the NGR.

Part 4—Small customer complaints and dispute resolution

79—Definitions

This clause sets out definitions specific to this Division.

80—Role of energy ombudsman

The energy ombudsman for this jurisdiction is, as authorised by its constitution provisions, conferred with functions and powers under this Part and the Rules.

81—Standard complaints and dispute resolution procedures

Retailers and distributors are obliged to develop, make and publish on their website their standard complaints and dispute resolution procedures.

82—Complaints made to retailer or distributor for internal resolution

This clause provides for the manner in which small customer complaints about relevant matters to a retailer and distributor are to be dealt with by the relevant entity.

83—Complaints made or disputes referred to energy ombudsman

A small customer may make a complaint or refer a dispute to the energy ombudsman about a relevant matter, or any aspect of a relevant matter, concerning the customer and a retailer or distributor.

84—Functions and powers of energy ombudsman

This clause sets out the functions and powers of the energy ombudsman and provides for how those functions and powers are to be performed and exercised.

85—Information and assistance requirements

This clause sets out the information and assistance obligations of a retailer or distributor or AER relating to a small customer complaint or dispute to the energy ombudsman.

86—Retailers and distributors to be members of scheme

This clause provides for the circumstances in which a retailer and a distributor must be a member of, or subject to, an energy ombudsman scheme for a jurisdiction.

87—Rules

The Rules may make provision for or with respect to small customer complaints and disputes.

Part 5—Authorisation of retailers and exempt seller regime

Division 1—Prohibition on unauthorised selling of energy

88—Requirement for authorisation or exemption

This clause sets out the requirements for a person selling energy to hold a current retailer authorisation and be relevantly registered or be an exempt seller. This clause is a civil penalty provision.

Division 2—Application for and issue of retailer authorisation

89—Applications

A person may apply to the AER for a retailer authorisation.

90—Entry criteria

This clause sets out the entry criteria in relation to an application for a retailer authorisation.

91—Public notice and submissions

Before deciding an application, the AER must publish a notice and consider written submissions received within the period for receipt of those submissions.

92—Deciding application

The AER is obliged to decide whether to grant or refuse an application and this clause provides for when the AER must grant the application.

93—Conditions

The AER may impose conditions on the retailer authorisation relating to the satisfaction of the entry criteria. The grant may be conditional on satisfaction of conditions. The conditions may be amended or revoked.

94—Notice of decision to grant application

The AER must give a successful applicant a notice in accordance with the requirements of this clause.

95—Deemed refusal

This clause sets the circumstances in which the AER is deemed to have refused an application for a retailer authorisation.

96—Issue and public notice of retailer authorisation

On the grant of a retailer authorisation the AER must issue a retailer authorisation to the applicant and publish a notice on the AER's website.

97—Notice of refusal

On the refusal of an application for a retailer authorisation the AER must notify the applicant and publish a notice on its website.

98—Duration of retailer authorisation

A retailer authorisation continues in force until it is surrendered or revoked.

99—Variation of retailer authorisation

The AER may amend a retailer authorisation to make any alterations requested by the retailer.

100—Form of energy authorised to be sold

A retailer authorisation may authorise the sale of electricity or gas and cannot be varied to change or add to the form of energy that the applicant is authorised to sell to customers.

Division 3—Transfer of retailer authorisation

101—Transfer only by application

This Division sets out the exclusive circumstances in which a retailer authorisation may be transferred.

102—Applying for transfer

A retailer may apply to the AER to transfer the retailer's authorisation.

103—Deciding transfer application

This clause sets out what the AER must take into account in deciding whether to grant or refuse the transfer application, what it may and is obliged to do on granting an application and the obligations of the transferor or the transferee. The subclause imposing obligations on the transferor and the transferee is a civil penalty provision.

104—Application of application process to transfers

The AER may determine that specified provisions of Division 2 apply in relation to the proposed transferee in the same way as they apply in relation to the applicant for a retailer authorisation, and those provisions apply accordingly with any necessary modifications.

Division 4—Surrender of retailer authorisation

105—Surrender of retailer authorisation

A retailer authorisation is surrendered in accordance with this clause.

106—Transfer of customers following surrender

A person whose retailer authorisation is surrendered must comply with the requirements of conditions imposed for the transfer of the person's former customers to another retailer. This clause is a civil penalty provision.

Division 5—Revocation of retailer authorisation

Note—

This Division does not apply where a RoLR notice is issued under Part 6: see section 142(2).

107—Power to revoke retailer authorisation

The AER may decide to revoke a retailer authorisation in accordance with this Division. The grounds for revocation of a retailer authorisation are set out in this clause.

108—Transfer of customers following revocation

A person whose retailer authorisation has been revoked must comply with the requirements of conditions imposed for the transfer to another retailer of the persons who were its customers immediately before the revocation. This clause is a civil penalty provision.

Division 6—Exemptions

109—Definitions

This clause sets out the definitions specific to this Division.

110—Power to exempt

The AER may decide to exempt persons or classes of persons in accordance with the Rules from the requirement to hold a retailer authorisation. A person is an exempt seller for the purposes of this Part while an exemption is in force in relation to the person.

111—Power to revoke exemption

The AER may revoke an exemption in accordance with this clause.

112—Conditions

The AER may impose conditions on an exempt seller or class of exempt sellers in accordance with the Rules and the AER Exempt Selling Guidelines. An exempt seller must comply with applicable conditions imposed under this section. This obligation on an exempt seller is a civil penalty provision. The AER may deal with a breach of a condition as if it were a breach of the Rules.

113—Rules

The Rules may make provision for or with respect to the exemption of persons or classes of persons from the requirement to hold a retailer authorisation and the variation or revocation of exemptions.

114—Manner in which AER performs AER exempt selling regulatory functions or powers

This clause provides for the manner in which the AER must perform or exercise an AER exempt selling regulatory function or power including that it may take into account the exempt seller related factors set out in clause 115 or the customer related factors set out in clause 116.

115—Exempt seller related factors

This clause sets out the exempt seller related factors.

116—Customer related factors

This clause sets out the customer related factors.

Division 7—Miscellaneous

117—AER Retailer Authorisation Guidelines

The AER must make and may amend the AER Retailer Authorisation Guidelines in accordance with the retail consultation procedure.

118—AER Exempt Selling Guidelines

The AER must, in accordance with the Rules, develop and maintain (and may amend) AER Exempt Selling Guidelines in accordance with the retail consultation procedure.

119—Public Register of Authorised Retailers and Exempt Sellers

The AER must maintain, and publish on its website, a Public Register of Authorised Retailers and Exempt Sellers.

120—Revocation process—retailer authorisations and exemptions

This clause sets out the revocation process in relation to a retailer authorisation or an exempt seller's exemption.

Part 6—Retailer of last resort scheme

Division 1—Preliminary

121—Purpose of this Part

This clause provides for the purpose of this Part.

122—Definitions

This clause contains definitions for the purposes of the retailer of last resort (RoLR) scheme. Inter alia, the clause defines 'RoLR event' which includes, revocation of a retailer authorisation, the suspension of a retailer's right to acquire electricity or gas in the relevant wholesale markets and insolvency events.

Division 2—Registration of RoLRs

123—RoLR criteria

This clause specifies the RoLR criteria which are used for the purposes of the RoLR scheme.

124—Expressions of interest for registration as a RoLR

This clause provides for the calling for expressions of interest from retailers for registration as a RoLR.

125—Appointment and registration as a default RoLR

This clause provides for the appointment and registration of default RoLRs. Default RoLRs must be appointed for each connection point (in the case of electricity) and each distribution system (in the case of gas) at all times. The clause also enables the AER to terminate the appointment of default RoLRs.

126—Registration of additional RoLRs

This clause provides for the registration of additional RoLRs. Additional RoLRs are in addition to the default RoLR for a connection point or distribution system.

127—Register of RoLRs

This clause provides for the keeping of a register of RoLRs.

128—Termination of registration as a RoLR

This clause provides for the termination of registration of RoLRs other than default RoLRs.

129—New basis for registration as a RoLR

This clause enables AEMO to advise the AER that a RoLR may be registered on a basis other than a connection point (in the case of electricity) or a distribution system (in the case of gas).

Division 3—Contingency events

130—AER's powers

This clause enables the AER, in the event of the contingency of a RoLR event, to exercise certain powers including requesting financial information from the retailer concerned and making inquiries of registered RoLRs as to whether they want to be appointed designated RoLR if a RoLR event eventuates.

131—Confidentiality provisions

This clause contains the confidentiality provisions that apply in the case of contingency events.

Division 4—Appointment of designated RoLRs

132—Designation of registered RoLR for RoLR event

This clause provides for who is to be appointed a designated RoLR in respect of a RoLR event. The default RoLR is appointed by force of the section in respect of a RoLR event unless the AER has before the event appointed another registered RoLR instead.

133—Criteria for RoLR designation

This clause specifies the criteria for being appointed a designated RoLR.

134—Appointment of more than one designated RoLR for RoLR event

This clause enables the AER to appoint more than one designated RoLR for a RoLR event having regard to the size of, or other circumstances of, the event.

135—AER RoLR Guidelines

This clause enables the AER to make and publish guidelines for the purposes of the RoLR scheme. The guidelines must specify certain matters in relation to the AER exercising its powers under section 134. The guidelines may also provide for other matters, including as to the form of and information to be contained in applications or expressions of interest made in accordance with the Part.

Division 5—Declaration of RoLR event

136—Issue of RoLR notice

This clause provides that the AER must issue a RoLR notice as soon as practicable after a RoLR event occurs. The clause provides for the contents of the notice which include who is specified as the designated RoLR or designated RoLRs for the event and specifying the transfer date on which all customers of the failed retailer are transferred to the designated RoLR.

137—RoLR notice—direction for gas

This clause provides for certain directions that the AER may include in a RoLR notice if there is no declared wholesale gas market or short term trading market or, in the AER's opinion there is an insufficiency of capacity or gas available in a short term trading market. The directions are as to making available capacity and gas so that a designated RoLR may perform its functions. The section further makes provision for agreements for long term provision of the capacity or gas including, if agreement is unable to be reached, providing for how a haulage contract or gas sale contract is then to come into existence.

138—Service and publication of RoLR notice

This clause provides for the service and publication of a RoLR notice.

139—Publication requirements for RoLR events

This clause provides for publication of RoLR events including making provision for publication on websites, messages on call centres and advertisements.

140—Transfer of responsibility

This clause, by force of law, terminates the customer relationship between a customer and the failed retailer as at the transfer date specified in the RoLR notice and provides that customer then becomes a customer of the relevant designated RoLR. The section also makes provision for the designated RoLR to assume certain functions, obligations and powers of the failed retailer (including in relation to life support equipment) and further makes provision for how customer transfers to the failed retailer that were underway as at the transfer date are to be dealt with. Special provision is contained in the section for large customers of electricity who may pre-nominate who is their retailer in the case of a RoLR event, in which case that customer is transferred to that retailer rather than the designated RoLR.

141—Termination of customer retail contracts

This clause, by force of law, terminates the contract between the failed retailer and the customer as at the transfer date. The section also provides for how disputes that arose under that contract are to continue to be dealt with, termination of direct debit (including Centrepay) authorisations, refund of advance payments and security deposits, completion of service orders and continued compliance by the failed retailer and its insolvency official with payment plans.

142—Revocation of retailer authorisation

This clause provides that the AER may, if it has not already done so, revoke a failed retailer's retailer authorisation by endorsement on the RoLR notice.

143—Compliance requirements following service of RoLR notice

This clause provides for who must comply with a RoLR notice and also requires AEMO to comply with the notice as well as the RoLR scheme.

144—RoLR Procedures

This clause provides for the RoLR Procedures that AEMO may include in the procedures that it makes under the National Electricity Law and the National Gas Law. The RoLR Procedures (among other things) may make provision for the operation and implementation of the RoLR scheme.

Division 6—Arrangements for sale of energy to transferred customers

145—Contractual arrangements for sale of energy to transferred small customers

This clause provides that a RoLR deemed small customer retail arrangement arises between the designated RoLR and the small customer with effect on and from the transfer date, the terms and conditions of which are those of the designated RoLR's standard retail contract and the prices of which are (subject to any variation arising from a RoLR cost recovery scheme) that RoLR's standing offer prices.

146—Contractual arrangements for sale of energy to transferred large customers

This clause provides that a RoLR deemed large customer retail arrangement arises between the designated RoLR and the large customer with effect on and from the transfer date, the terms and conditions of which are those published by the designated RoLR and which must be fair and reasonable.

147—Duration of arrangements for small customers

This clause provides for how a RoLR deemed small customer retail arrangement may be terminated and what may replace it and when.

148—Duration of arrangements for large customers

This clause provides for how a RoLR deemed small customer retail arrangement may be terminated.

Division 7—Information requirements

Subdivision 1—Preliminary

149—Operation of this Division

This clause provides that this Division does not limit the information that AEMO may require in relation to a RoLR event. It further provides, to avoid doubt, that AEMO may under RoLR Procedures require a failed retailer and insolvency official to provide information.

Subdivision 2—General obligation to notify AER

150—Information to be provided to AER by AEMO and retailers

This clause provides that both AEMO and a retailer must give notice to the AER (and in the case of a failed retailer, to AEMO) of anything that it has reason to believe might affect the retailer's ability to maintain continuity of sale of energy to its customers or gives rise to a RoLR event.

Subdivision 3—Serving and making of RoLR regulatory information notices

151—Meaning of RoLR regulatory information notice

This clause defines a RoLR regulatory information notice. It also provides that the insolvency official of a failed retailer must provide information when served with the notice.

152—Service of RoLR regulatory information notice

This clause provides for when a RoLR regulatory information notice may be served on a retailer. The notice may be served either when a RoLR event has occurred or in connection with the AER's exercise of its powers under Division 3 (Contingency events).

Subdivision 4—Form and content of RoLR regulatory information notices

153—Form and content of RoLR regulatory information notice

This clause provides for the form and content of a RoLR regulatory information notice.

154—Further provision about the information that may be described in a RoLR regulatory information notice

This clause makes further provision as to the information that may be required by a RoLR regulatory information notice.

155—Further provision about manner in which information must be provided

This clause enables a RoLR regulatory information notice to specify when and how information may be provided and verified.

Subdivision 5—Compliance with RoLR regulatory information notices

156—Compliance with RoLR regulatory information notices

This clause provides that a retailer (or former retailer) and insolvency official must comply with a RoLR regulatory information notice.

157—Provision of information obtained from RoLR regulatory information notice

This clause provides for the sharing of information received pursuant to a RoLR regulatory information notice with AEMO, distributors, designated RoLR's and other persons whom the AER considers it necessary to give the information to.

Subdivision 6—General

158—Providing false or misleading information

This clause establishes a criminal offence for providing false or misleading information in response to a RoLR regulatory information notice.

159—Person cannot rely on duty of confidence to avoid compliance with RoLR regulatory information notice

This clause provides that a person cannot rely on a duty of confidentiality to avoid compliance with RoLR regulatory information notice.

160—Legal professional privilege not affected

This clause provides that section 156 and a RoLR regulatory information notice do not affect legal professional privileges.

161—Protection against self-incrimination

This clause provides, in the case of natural persons to whom section 156 applies, for protection against self incrimination.

Division 8—RoLR plans

162—RoLR plans

This clause provides for the AER to make RoLR plans which are for the procedures to be followed in the case of a RoLR event and for exercises. A RoLR plan must not be inconsistent with the RoLR Procedures.

163—Contents of RoLR plans

This clause provides, without limitation, as to what a RoLR plan must provide for. Among other things, it must provide for communication of the RoLR event to the community, small and large customers, Ministers, distributors and designated RoLR's. In the case of small customers, this must include communication of what will happen to their contracts, this including as to the effect of sections 140 and 141.

Division 9—RoLR cost recovery schemes

164—Operation of this Division, schemes and determinations

This clause provides that this Division and the RoLR cost recovery scheme have effect notwithstanding anything to the contrary in the National Electricity Law, the National Gas Law, the Rules made under those laws, any distribution determination in electricity or any applicable access arrangement in gas.

165—RoLR cost recovery

This clause provides that a registered RoLR may only recover costs incurred in relation to the RoLR scheme in accordance with a RoLR cost recovery scheme determined under this Division.

166—RoLR cost recovery schemes

This clause provides for the AER to make a determination with respect to a RoLR cost recovery scheme under which a default RoLR may recover both its costs of preparing for a RoLR event and the costs of the event as well and a designated RoLR that is not a default RoLR may only recover the costs of the event.

167—RoLR cost recovery scheme distributor payment determination

This clause provides that the AER must, as part of its determination with respect to a RoLR cost recovery scheme, also make a RoLR cost recovery distribution scheme payment determination under which distributors pay the RoLR concerned but those payments are then treated as pass throughs to customers.

168—Amendment of schemes and determinations

This clause provides for when a RoLR cost recovery scheme or a RoLR cost recovery scheme distribution payment determination may be amended by the AER.

Division 10—Miscellaneous

169—Information to be included in customer retail contracts

This clause provides that all customer retail contracts for small customers must include a notice explaining what will happen to the customer's arrangements for purchase of energy if a RoLR event occurs.

170—Application for retailer authorisation by failed retailer or associate

This clause enables the AER, on application for a retailer authorisation by a failed retailer or an associate, to refuse the application or grant it on condition that there be a payment in respect of the costs of the prior RoLR event involving that retailer.

171—Reimbursement of insolvency official

This clause provides for reimbursement of an insolvency official for that official's reasonable costs of complying with the RoLR scheme, a RoLR notice or a RoLR regulatory information notice.

172—AER report on RoLR event

This clause requires the AER to report to the MCE on a RoLR event after the occurrence of the event.

173—Immunity

This clause provides an immunity for protected persons (as defined in the section) in relation to acts or omissions for the purposes of the RoLR scheme.

174—Authorised disclosure of information

This clause authorises disclosure of personal information within the meaning of Privacy legislation of the Commonwealth and participating jurisdictions.

175—Corporations Act displacement

This clause declares this Part to be a Corporations legislation displacement provision in relation to Chapter 5 of the Corporations Act 2001.

Part 7—Small compensation claims regime

Division 1—Preliminary

176—Small compensation claims regime

This Division establishes a small compensation claims regime to enable small customers to make small claims for compensation from distributors who provide customer connection services to their premises.

177—Definitions

This clause sets out the definitions specific to this Division.

178—Claimable incidents—meaning

This clause sets out what is a claimable incident.

179—Compensable matters—meaning

This clause sets out what are and what are not compensable matters.

180—Maximum amount—meaning

This clause sets out what is a maximum amount for which a distributor is liable to pay compensation for a claim.

181—Minimum amount—meaning

This clause sets out what is a minimum amount for which a distributor is liable to pay for a claim.

182—Median amount—meaning

This clause sets out what is a median amount for the purposes of setting the discretionary range and the mandatory range for a claim.

183—Repeat claimant—meaning

This clause sets out the meaning of a repeat claimant.

184—AER determinations of minimum amount, median amount and repeated claims maximum number

This clause sets out the requirements for an AER determination of what is a minimum amount, median amount and repeated claims maximum number. The clause applies to a participating jurisdiction only if and to the extent a local instrument of that jurisdiction declares that this section applies in relation to it.

Division 2—Compensation generally

185—When compensation is payable

This clause provides for when compensation is payable under this Division to a small customer by a distributor under a claim for compensation properly made in respect of a claimable incident.

186—Duty of distributor to provide information and advice

Each distributor is obliged to provide information and advice in accordance with the requirements of this clause.

Division 3—Claims process

187—Making of claims

This clause provides for the process for making claims for compensation in respect of a claimable incident from a distributor who provides customer connection services to premises of the customer.

188—Claims for less than the minimum amount

A distributor may reject a claim for compensation if the amount claimed is less than the minimum amount for the claimable incident.

189—Claims for more than the maximum amount

This clause provides for the circumstances where a claim for compensation is for more than the maximum amount.

190—Confirmation of claims involving property damage

If a distributor is not able to confirm that a claimable incident involving property damage did affect the small customer's premises in the manner claimed this clause provides for a process for progressing the claim.

191—Claims for amounts within the mandatory range

This clause sets out the circumstances in which, if the amount claimed is within the mandatory range, a distributor must pay the customer the amount claimed without reducing or disputing the quantum of the amount claimed.

192—Claims for amounts in the discretionary range

This clause sets out what a distributor is required to pay if the amount claimed is within the discretionary range.

193—Claims by repeat claimants

This clause provides for dealing with claims for compensation by small customers who are repeat claimants.

194—Distributor to reimburse customer for reasonable costs of claim

If a distributor pays compensation to a small customer under this Division, the distributor must pay to the person the amount of any reasonable costs incurred by the person in providing any quotes or evidence to the distributor.

195—Rejection of claims

This clause provides for some circumstances in which a distributor may reject a claim for compensation.

196—Distributor to advise customer of reasons for reducing or rejecting claim and of review rights

A distributor is obliged to advise a customer of the reasons for reducing or rejecting a claim and of their review rights in accordance with the requirements of this clause.

197—Small customer complaint or dispute resolution

A small customer who is dissatisfied with a decision of a distributor under this Division in relation to the customer's claim for compensation may lodge a complaint with the relevant energy ombudsman.

Division 4—Payment of compensation

198—Method of payment

A payment of compensation payable to a small customer under this Division is to be made by the distributor as soon as practicable and in accordance with the other requirements of this clause.

199—Finality of payment of compensation

If a small customer is compensated in respect of a claimable incident that affected particular premises this clause provides for the finality of the payment of compensation.

Division 5—Miscellaneous

200—Other remedies

Apart from section 199, nothing in this Part prevents a small customer from commencing or maintaining proceedings for damages in respect of a claimable incident in a court of competent jurisdiction.

201—Payment of compensation not to be admission of fault, negligence or bad faith

In deciding to make a payment of compensation under this Part, a distributor does not admit fault, negligence or bad faith in respect of the claimable incident concerned.

202—Requirement to keep records on regime activities

A distributor must create and keep and make available relevant records in accordance with the requirements of this clause.

203—Rules

The Rules may make provision for or with respect to the small compensation claims regime.

Part 8—Functions and powers of the Australian Energy Regulator

Division 1—General

204—Functions and powers of AER (including delegations)

This clause sets out the AER's functions and powers, and provides for the effectiveness of a delegation by the AER under section 44AAH of the TPA.

205—Manner in which AER performs AER regulatory functions or powers

This clause makes provision in relation to the manner in which the AER must perform or exercise its regulatory functions or powers.

Division 2—General information gathering powers

206—Power to obtain information and documents

This clause provides that the AER may serve notices requiring information to be furnished or documents produced and creates an offence of failing to comply with such a notice or knowingly providing false or misleading information in purported compliance with such a notice, for which the penalty is a fine of up to $2,000 for a natural person or up to $10,000 for a body corporate.

Division 3—Disclosure of confidential information held by AER

207—Confidentiality

This clause provides that the confidentiality provisions of section 44AAF of the TPA are effective for the purposes of the Law, the National Regulations and the Rules.

208—Authorised disclosure of information given to AER in confidence

This clause allows the AER to disclose information in some circumstances.

209—Disclosure with prior written consent is authorised

This clause allows the AER to disclose information with the consent of the person who provided it.

210—Disclosure for purposes of court and tribunal proceedings and to accord natural justice

This clause allows the AER to disclose information if it is required to for a court or tribunal proceedings.

211—Disclosure of information given to AER with confidential information omitted

This clause allows the AER to omit confidential information before disclosing a document.

212—Disclosure of information given in confidence does not identify anyone

This clause allows the AER to disclose de-identified information.

213—Disclosure of information that has entered the public domain

Allows the AER to disclose information that has entered the public domain.

214—Disclosure of confidential information authorised if detriment does not outweigh public benefit

This clause allows the AER to disclose information if the detriment does not outweigh the public benefit.

Division 4—Miscellaneous matters

215—Consideration by the AER of submissions or comments made to it under this Law or the Rules

This clause requires the AER to consider submissions, made in response to an invitation to provide submissions. when making a decision.

216—Use of information provided under a notice under Division 2

This clause allows the AER to use information provided in response to a notice under section 206 for a purpose connected with its performance or exercise of a power or function under the Law or the Rules, the National Electricity Law or National Electricity Rules, or the National Gas Law or National Gas Rules.

217—AER to inform certain persons of decisions not to investigate breaches, institute proceedings or serve infringement notices

This clause requires the AER to inform a person who provided information about a breach or potential breach of the law or the Rules that they do not intend to investigate the breach or commence proceedings.

218—AER enforcement guidelines

This clause allows the AER to issue guidelines about how it will conduct enforcement actions under the Law.

219—Single documentation

This clause allows the AER, where it is authorised to prepare a document under the Law or the Rules, and under the National Electricity Law or National Electricity Rules, or the National Gas Law or National Gas Rules for a similar, related or corresponding purpose, to prepare a single document to satisfy all requirements.

220—Use of information

This clause allows 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 Electricity Law or National Electricity Rules, or the National Gas Law or National Gas Rules.

Part 9—Functions and powers of the Australian Energy Market Commission

Division 1—General

221—Functions and powers of the AEMC

This clause sets out the AEMC's functions and powers.

222—Delegations

This clause provides that a delegation by the AEMC under section 20 of the Australian Energy Market Commission Establishment Act 2004 is effective for the purposes of the Law, the National Regulations and the Rules.

223—Confidentiality

This clause provides that the confidentiality provisions of section 24 of the Australian Energy Market Commission Establishment Act 2004 are effective for the purposes of the Law, the National Regulations and the Rules.

224—AEMC must have regard to national energy retail objective

This clause provides that the AEMC must have regard to the national energy retail objective.

225—AEMC must have regard to MCE statements of policy principles in relation to Rule making and reviews

This clause provides that the AEMC must have regard to any relevant MCE statements of policy principles in making a Rule or conducting certain reviews.

Division 2—Rule making functions and powers of the AEMC

226—Rule making powers

This clause states the rule making functions and powers of the AEMC are set out in Part 10 of the Law.

Division 3—Committees, panels and working groups of the AEMC

227—Establishment of committees and panels and working groups

This clause allows the AEMC to establish committees, panels and working groups.

Division 4—MCE directed reviews

228—MCE directions

This clause provides that the MCE may direct the AEMC to conduct reviews. The direction must be published in the South Australian Government Gazette.

229—Terms of reference

This clause provides for the terms of reference of MCE directed reviews.

230—Notice of MCE directed review

This clause requires the AEMC to publish notice of an MCE directed review.

231—Conduct of MCE directed review

This clause provides for the conduct of MCE directed reviews.

Division 5—Other reviews

232—Reviews by AEMC

This clause provides for reviews by the AEMC other than MCE directed reviews.

Division 6—Miscellaneous

233—Fees

This clause provides for the AEMC to charge fees as specified in the Regulations.

234—Confidentiality of information

This clause provides for the treatment of confidential information by the AEMC.

Part 10—National Energy Retail Rules

Division 1—General

Subdivision 1—Interpretation

235—Definitions

This clause sets out definitions for the purposes of this Division.

Subdivision 2—Rule making test

236—Application of national energy retail objective

This clause requires the AEMC to make rules that contribute to the achievement of the national energy retail objective.

Division 2—National Energy Retail Rules generally

237—Subject matters of Rules

This clause provides for the subject matter of the Rules.

Division 3—Initial National Energy Retail Rules

238—South Australian Minister to make initial National Energy Retail Rules

This clause provides for the South Australian Minister to make the initial Rules. A notice of making must be published in the South Australian Government Gazette and the Rules must be made publicly available.

Division 4—Subsequent Rules and rule amendment procedure

239—Subsequent rule making by AEMC

This clause provides for the AEMC to make rules.

240—Rules relating to MCE or Ministers of participating jurisdictions require MCE consent

This clause requires the AEMC to obtain the MCE's consent before making rules relating to the MCE or Ministers of participating jurisdictions.

241—AEMC must not make Rules that create criminal offences or impose civil penalties for breaches

This clause prohibits the AEMC from making rules that create criminal offences or impose civil penalties for breaches.

242—Documents etc applied, adopted and incorporated by Rules to be publicly available

This clause requires documents applied, adopted or incorporated by a Rule to be publicly available.

243—Initiation of making of a Rule

This clause provides for who may request the making of a Rule and provides that the AEMC must not make a Rule on its own initiative except in certain circumstances.

244—AEMC may make more preferable Rule in certain cases

This clause allows the AEMC to make a Rule that is different from a market initiated Rule if the AEMC is satisfied that its proposed rule will or is more likely to better contribute to the achievement of the national energy retail objective.

245—AEMC may make Rules that are consequential to a Rule request

This clause allows the AEMC to make Rules that are consequential to a rule change request.

246—Content of requests for Rules

This clause sets out what a request for the making of a Rule must contain.

247—Waiver of fee for Rule requests

This clause allows the AEMC to waive a fee for a rule request.

248—Consolidation of 2 or more Rule requests

This clause allows the AEMC to consolidate multiple requests for a Rule.

249—Initial consideration of request for Rule

This clause provides for initial consideration by the AEMC of a request for a Rule.

250—AEMC may request further information from Rule proponent in certain cases

This clause allows the AEMC to request additional information from a person who requests the making of a Rule.

251—Notice of proposed Rule

This clause requires the AEMC, if it decides to act on a request for a rule to be made, or forms an intention to make an AEMC initiated rule, to publish notice of the request or intention and a draft of the proposed Rule.

252—Publication of non-controversial or urgent final Rule determination

This clause provides for the publication of non controversial and urgent Rules.

253—'Fast track' Rules where previous public consultation by energy regulatory body or an AEMC review

This clause allows certain requests for Rules to be dealt with expeditiously.

254—Right to make written submissions and comments

This clause provides for the making of written submissions on a proposed Rule.

255—AEMC may hold public hearings before draft Rule determination

This clause provides for the holding of a hearing in relation to a proposed Rule.

256—Draft Rule determinations

This clause requires the AEMC to publish its draft determination, including reasons, in relation to a proposed Rule.

257—Right to make written submissions and comments in relation to draft Rule determination

This clause provides for written submissions on a draft Rule determination.

258—Pre-final Rule determination hearings

This clause provides for a pre-final determination hearing to be held in relation to a draft Rule determination.

259—Final Rule determination

This clause requires the AEMC to publish its final Rule determination, including reasons.

260—Proposal to make more preferable Rule

This clause allows the AEMC to take action to consult, receive submissions and conduct hearings in relation to a more preferable Rule.

261—Making of Rule

This clause requires the AEMC to make a Rule as soon as practicable after publication of its final Rule determination. Notice of the making of a Rule must be published in the South Australian Government Gazette.

262—Operation and commencement of Rule

This clause provides that a Rule comes into operation on the day the notice of making is published or on such later date as is specified in that notice or the Rule.

263—Rule that is made to be published on website and made available to the public

This clause requires the AEMC, without delay after making a Rule, to publish the Rule on its website and make a copy available for inspection at its offices.

264—AEMC must publish and make available up to date versions of Rules

This clause requires the AEMC to maintain an up to date copy of the Rules on its website and to make copies of the Rules available for inspection at its offices.

265—Evidence of the National Energy Retail Rules

This clause is an evidentiary provision relating to the Rules.

Division 5—Miscellaneous provisions relating to Rule making by the AEMC

266—Extensions of periods of time in Rule making procedure

This clause provides a general power for the AEMC to extend periods of time in the Rule making procedure.

267—AEMC may extend period of time for making of final Rule determination for further consultation

This clause allows the AEMC to extend periods of time for consultation as a result of comments received during consultation.

268—AEMC may publish written submissions and comments unless confidential

This clause allows the AEMC to publish submissions unless they are confidential.

269—AEMC must publicly report on Rules not made within 12 months of public notification of requests

This clause requires the AEMC to publicly report if it fails to make a Rule within 12 months of receiving a request.

Part 11—National Energy Retail Regulations

270—General regulation-making power for this Law

This clause enables the Governor to make regulations to give effect to the Law on the unanimous recommendation of the Ministers of the participating jurisdictions. In view of the interstate application of laws scheme that is based on this measure and regulations made under the Act, Parliamentary disallowance of the regulations is excluded.

271—Specific regulation-making power

This clause enables the Governor to make regulations of a transitional nature relating to the transition from the energy laws to this new scheme.

Part 12—Compliance and performance

Division 1—AER compliance regime

272—Obligation of AER to monitor compliance

This clause requires the AER to monitor compliance of regulated entities and other persons with the Law, the National Regulations and the Rules.

273—Obligation of regulated entities to establish arrangements to monitor compliance

This clause requires regulated entitles to establish and observe policies, systems and procedures to monitor compliance with the Law, the National Regulations and the Rules.

274—Obligation of regulated entities to provide information and data about compliance

This clause requires a regulated entity to provide to the AER information and data relating to the entity's compliance with requirements of the Law, the National Regulations and the Rules.

275—Compliance audits by AER

This clause allows the AER to carry out, or arrange for the carrying out, of a compliance audit of a regulated entity.

276—Compliance audits by regulated entities

This clause requires a regulated entity to comply with an AER request to carry out a compliance audit.

277—Carrying out of compliance audits

This clause requires a compliance audit to be carried out in accordance with the AER Compliance Procedures and Guidelines.

278—Cost of compliance audits

This clause provides for the cost of compliance audits to be borne by the regulated entity.

279—Compliance reports

This clause requires the AER to publish an annual compliance report on its website.

280—Contents of compliance reports

This clause specifies the required content of a compliance audit report.

281—AER Compliance Procedures and Guidelines

This clause requires the AER to make AER Compliance Procedures and Guidelines and specifies matters the procedures and guidelines may deal with.

Division 2—AER performance regime

282—Obligation of regulated entities to provide information and data about performance

This clause requires a regulated entity to submit to the AER information and data relating to the entity's performance.

283—Performance audits—hardship

This clause allows the AER to conduct performance audits in respect of performance of retailers by reference to hardship program indicators.

284—Retail market performance reports

This clause requires the AER to publish an annual retail market report on its website.

285—Contents of retail market performance reports

This clause specifies the required content of a retail market performance report.

286—AER Performance Reporting Procedures and Guidelines

This clause requires the AER to make AER Performance Reporting Procedures and Guidelines and specifies matters the procedures and guidelines may deal with.

287—Hardship program indicators

This clause requires the AER to determine and publish hardship program indicators in accordance with the Rules.

Part 13—Enforcement

Division 1—Enforceable undertakings

288—Enforceable undertakings

This clause allows the AER to accept and enforce enforceable undertakings.

Division 2—Proceedings generally

289—Instituting civil proceedings under this Law

This clause provides that proceedings for breach of the Law, the National Regulations or the Rules may not be instituted except as provided in this Part.

290—Time limit within which proceedings may be instituted

This clause provides for the time limit within which proceedings may be instituted.

Division 3—Proceedings for breaches of this Law, the National Regulations or the Rules

291—AER proceedings for breaches of this Law, the National Regulations or the Rules that are not offences

This clause provides for the orders that may be made in proceedings in respect of breaches of provisions of the Law, the National Regulations or the Rules that are not offence provisions.

292—Proceedings for declaration that a person is in breach of a conduct provision

This clause allows a person other than the AER to apply to a court for a declaration that a person is in breach of a conduct provision.

293—Actions for damages by persons for breach of conduct provision

This clause allows a person other than the AER to apply to a court for a declaration that a person is in breach of a conduct provision.

Division 4—Matters relating to breaches of this Law, the National Regulations or the Rules

294—Matters for which there must be regard in determining amount of civil penalty

This clause sets out matters to be taken into account in determining civil penalties.

295—Breach of a civil penalty provision is not an offence

This clause provides that a breach of a civil penalty provision (as defined in clause 2) is not an offence.

296—Breaches of civil penalty provisions involving continuing failure

This clause provides for breaches of civil penalty provisions involving continuing failure.

297—Conduct in breach of more than one civil penalty provision

This clause provides for liability for one civil penalty in respect of the same conduct constituting a breach of two or more civil penalty provisions.

298—Persons involved in breach of civil penalty provision or conduct provision

This clause provides for aiding, abetting, counselling, procuring or being knowingly concerned in or party to a breach of a civil penalty provision.

299—Attempt to breach a civil penalty provision

This clause provides that an attempted breach of a civil penalty provision is deemed to be a breach of that provision.

300—Civil penalties payable to the Commonwealth

This clause provides that civil penalties are payable to the Commonwealth.

Division 5—Judicial review of decisions under this Law, the National Regulations and the Rules

301—Definition

This clause defines 'person aggrieved' for the purposes of this Division.

302—Applications for judicial review of decisions of the AEMC

This clause provides that aggrieved persons (as defined in clause 301) may apply for judicial review in respect of AEMC decisions and determinations, and that the operation of a decision or determination is not affected by an application for judicial review, unless the Court otherwise orders.

Division 6—Further provision for corporate liability for breaches of this Law

303—Definition

This clause defines 'breach provision' for the purposes of this Division.

304—Offences and breaches by corporations

This clause provides that an officer (as defined) of a corporation is also liable for a breach of an offence provision or civil penalty provision by the corporation if the officer knowingly authorised or permitted the breach.

305—Corporations also in breach if officers and employees are in breach

This clause provides that an act committed by an officer (as defined) or employee of a relevant participant (as defined) will be a breach where the act, if committed by the relevant participant, would be a breach.

Division 7—Application of provisions of NGL

306—Tribunal review of information disclosure decision

This clause applies the provisions of Division 3 of Part 5 of Chapter 8 of the National Gas Law to a decision by the AER to disclose information under clause 214 of this Law.

307—Costs in a review

This clause specifies how the Australian Competition Tribunal may award costs.

308—Infringement notices

This clause applies the provisions of Part 7 of Chapter 8 of the National Gas Law in relation to civil penalty provisions in this Law.

309—Search warrants

This clause applies the provisions of Division 2 of Part 1 of Chapter 2 of the National Gas Law (with such modifications as prescribed by the National Regulations) in relation to the provisions of this Law, the National Regulations and the Rules.

Part 14—Evidentiary matters

Division 1—Publication on websites

310—Definitions

This clause provides for definitions specific to this Division.

311—Publication of decisions on websites

This clause provides for when a decision or document is taken to be published on a website.

Division 2—Evidentiary certificates

312—Definitions

This clause provides for definitions specific to this Division.

313—Evidentiary certificates—AER

This clause enables an AER member or certain persons assisting the AER to sign a certificate stating that certain matters are evidence of the matter.

314—Evidentiary certificates—AEMC

This clause enables an AEMC Commissioner or the AEMC chief executive to sign a certificate stating that certain matters are evidence of the matter.

Division 3—Time of commencement of a Rule

315—Time of commencement of a Rule

This clause provides for the time a Rule commences.

Part 15—General

316—Immunity in relation to failure to supply energy

This clause provides an immunity to a retailer or distributor, or an officer or employee of a retailer or distributor, in relation to a failure to supply energy in certain circumstances.

317—Distributor—retailer mutual indemnity

This clause provides a mutual indemnity between a retailer and distributor of a shared customer.

318—Immunity in relation to personal liability of AEMC officials

This clause protects AEMC officials from any personal liability as a result of performing their functions under this Law and the Rules.

319—Giving of notices and other documents under Law or Rules

This clause specifies how notices and documents may be served under the Law or the Rules.

320—Law and the Rules to be construed not to exceed legislative power of Legislature

This clause provides that a provision of the Law and the Rules is to be construed so as not to exceed the legislative power of the Legislative of the jurisdiction.

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

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