Statutes Amendment (Energy Consumers Australia) Bill

Second Reading

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (16:13): I move:

That this bill be now read a second time.

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

Leave granted.

The Government is amending the national energy legislation to support the establishment of a national consumer advocacy body, Energy Consumers Australia.

The Council of Australian Governments' Energy Council agreed to establish Energy Consumers Australia as it is an important step towards increasing consumer advocacy on national energy market matters of strategic importance or material consequence for energy consumers.

Energy Consumers Australia will be established as a company limited by guarantee, governed by a constitution with a single Member, the South Australian Minister responsible for Energy, and a skill-based Board comprising of one Chair and four Directors.

Energy Consumers Australia's objective will be to promote the long term interests of consumers of energy with respect to the price, quality, safety, reliability and security of supply of energy services by providing and enabling strong, coordinated, collegiate evidence based consumer advocacy on national energy market matters of strategic importance or material consequence for energy consumers, in particular for residential and small business customers.

It is being established to ensure that all energy consumers are represented in national energy matters. Currently, there is a concern that the interests of the large majority of residential and small business energy consumers are either not adequately represented, or where they are represented, the implications for ordinary consumers are not always able to be presented on a sufficiently well informed analytical basis to influence national energy policy developments or outcomes of regulatory determinations that have a large bearing on consumers' energy prices.

Activities to be undertaken by Energy Consumers Australia to achieve its objectives will include participating in the identification and resolution of national energy issues, engaging with consumers and existing consumer advocacy groups to increase overall effectiveness, building national and jurisdictional expertise and capacity through managing and funding research and representation activities and creating new avenues for ordinary consumers to be able to express their opinions and to find out about issues that concern them.

The Statutes Amendment (Energy Consumers Australia) Bill 2014 makes amendments to the National Electricity Law in the schedule to the National Electricity (South Australia) Act 1996, the National Gas Law in the schedule to the National Gas (South Australia) Act 2008 and the Australian Energy Market Commission Establishment Act 2004.

The Bill abolishes the Consumer Advocacy Panel, which is the existing body that facilitates consumer advocacy in relation to the national electricity and gas markets through a program of grants.

A mechanism for Energy Consumers Australia to honour grants determined before the Consumer Advocacy Panel is abolished is included in the Bill and existing applications for funding lodged with the Consumer Advocacy Panel and not yet considered are to be transferred to Energy Consumers Australia for consideration.

The Bill also seeks to ensure that grant applications can be considered by Energy Consumers Australia whilst it develops its own criteria and guidelines. It achieves this by providing for existing criteria developed by Energy Ministers and guidelines developed by the Consumer Advocacy Panel and approved by Energy Ministers to continue to apply for the purpose of the determination of applications for funding by Energy Consumers Australia until it prepares new criteria or guidelines.

Funding for Energy Consumers Australia will be obtained from the Australian Energy Market Operator, which will in turn recover the consumer advocacy funding from participant fees in accordance with the National Electricity Rules and National Gas Rules. New Rules are to be included in the National Electricity Rules and National Gas Rules to provide for the recovery and payment of consumer advocacy funding by the Australian Energy Market Operator. The Bill provides that the South Australian Minister responsible for energy may make initial rules in relation to Energy Consumers Australia, including provisions for its funding and other consequential matters.

The Bill will provide that once initial Rules have been made by the South Australian Minister responsible for energy on the subjects provided for in the Bill, the Minister will have no power to make any further Rules under this power.

Currently consumer advocacy funding is recovered from electricity market customers on a per-megawatt hour basis. The Bill provides the Australian Energy Market Operator with the ability to consider the appropriate methodology for recovering future consumer advocacy funding. This includes sufficient flexibility for the Australian Energy Market Operator to prepare a transitional schedule indicating how the funding is to be recovered from electricity market customers until the end of the current participant fee determination period.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

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

Division 1—Amendment of Act

4—Amendment of section 3—Interpretation

These amendments are consequential.

5—Amendment of section 26—Accounts and audit

These amendments are consequential.

6—Amendment of section 27—Annual report

This amendment is consequential.

7—Repeal of Parts 3 and 4

Currently, Parts 3 and 4 of the Act provide for the Consumer Advocacy Panel. Energy Consumers Australia (a company that is to be established) will take over the functions of the Consumer Advocacy Panel. Accordingly, Parts 3 and 4 of the Act are repealed.

8—Amendment of section 48—Certain Acts not to apply

These amendments are consequential.

9—Amendment of section 49—Regulations

This amendment enables the Governor to make regulations prescribing additional provisions of a saving or transitional nature consequent on the enactment of the Statutes Amendment (Energy Consumers Australia) Act 2014 (which may, if the regulations so provide, take effect from commencement of that Act or from a later day, but not so as to operate to the disadvantage of a person by decreasing the person's rights or imposing liabilities on the person).

Division 2—Transitional provisions

10—Interpretation

11—ECA to decide certain funding applications

12—AEMC to make grants in relation to certain funding applications

13—Criteria and guidelines

14—Amount held by AEMC for funding of Panel to be paid to ECA

15—Staff

16—Contracts, etc

17—Final reporting requirements associated with Panel

18—Transfer of certain records

19—Immunity from liability

20—Other provisions

This Division sets out various transitional provisions associated with the enactment of this measure.

Part 3—Amendment of National Electricity Law

21—Amendment of section 2—Definitions

These amendments are consequential.

22—Insertion of section 90E

The Minister will be authorised to make the first set of rules required for the purposes of Energy Consumers Australia (and the amendments related to Energy Consumers Australia).

23—Amendment of Schedule 1—Subject matter for the National Electricity Rules

Schedule 1 of the National Electricity Law is to be amended in order to include Energy Consumers Australia as a matter which may be the subject of rules under the law

24—Amendment of Schedule 2—Miscellaneous provisions relating to interpretation

This is a technical amendment relating to civil penalty provisions.

25—Amendment of Schedule 3—Savings and transitionals

Schedule 3 of the National Electricity Law is to be amended in order to include a transitional provision associated with the enactment of this measure.

Part 4—Amendment of National Gas Law

26—Amendment of section 2—Definitions

These amendments are consequential.

27—Insertion of section 294E

The Minister will be authorised to make the first set of rules required for the purposes of Energy Consumers Australia (and the amendments related to Energy Consumers Australia).

28—Amendment of Schedule 1—Subject matter for the National Gas Rules

Schedule 1 of the National Gas Law is to be amended in order to include Energy Consumers Australia as a matter which may be the subject of rules under the law.

Debate adjourned on motion of Hon. J.S.L. Dawkins.