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2010 - 2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUSTRALIAN ENERGY MARKET AMENDMENT (NATIONAL
ENERGY RETAIL LAW) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Resources and Energy, the
Honourable Martin Ferguson AM MP)
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AUSTRALIAN ENERGY MARKET AMENDMENT (NATIONAL ENERGY
RETAIL LAW) BILL 2011
GENERAL OUTLINE
1. The purpose of this Bill is to:
a) Amend the Australian Energy Market Act 2004 (Cth) to apply the new
National Energy Retail Law (that includes the National Energy Retail
Rules made under it) and the National Energy Retail Regulations in
Australia's offshore areas as laws of the Commonwealth. The National
Energy Retail Law is part of a cooperative Commonwealth, State and
Territory regime for the regulation of non-economic distribution and retail
regulation of gas and electricity known as the National Energy Customer
Framework (the Customer Framework). The new National Energy Retail
Law will have the Australian Energy Regulator (AER) as regulator and
the Australian Energy Market Commission (AEMC) will be responsible
for changes to the new National Energy Retail Rules made under the
National Energy Retail Law;
b) Amend the Australian Energy Market Act 2004 (Cth) to provide for the
conferral of functions and powers under the National Energy Retail Law
(that includes the National Energy Retail Rules) and the National Energy
Retail Regulations on the AER, the AEMC, the Australian Competition
Tribunal (ACT), and the Commonwealth Minister by the new National
Energy Retail Law;
c) Amend the Competition and Consumer Act 2010 (Cth) (formerly known
as the Trade Practices Act 1974 (Cth)) to address technical issues with
the conferral of functions and powers on the AER by the new National
Energy Retail Law and also under local energy instruments made under
State application Acts for the three national energy laws (the National
Energy Retail Law, the National Electricity Law and the National Gas
Law); and
d) Amend the Administrative Decisions (Judicial Review) Act 1977 (Cth) to
provide for judicial review of decisions under the new National Energy
Retail Law regime.
Nature of the cooperative national energy retail law regime
2. This Bill is part of the Council of Australian Governments' energy reform
program, under which non-economic distribution and retail regulation of gas
and electricity will come under the national energy institutional framework
and regulatory arrangements. This will enhance the national character and
efficiency of Australia's energy markets, and provide strong protections for
energy consumers on a national basis. This Bill will operate to deliver on the
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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 retail customers.
Current regulatory arrangements
3. The current energy regulatory regime consists of the Commonwealth
Competition and Consumer Act 2010 (Cth) and cooperative legislative
schemes for both electricity and gas comprising:
· the revised National Electricity Law and National Electricity Rules
established by the National Electricity (South Australia) Act 1996 (SA),
and applied as a law in other jurisdictions through application Acts
passed by participating States and Territories, including in relation to
the offshore area by the Commonwealth's Australian Energy Market
Act 2004 (the national electricity regime);
· the National Gas Law and National Gas Rules established by the
National Gas (South Australia) Act 2008 (SA), and applied as a law in
other jurisdictions through application Acts passed by participating
States and Territories, including in the offshore area and in the external
Territories of Christmas Island and Cocos (Keeling) Islands by the
Commonwealth's Australian Energy Market Act 2004 (the national gas
regime);
· an industry specific national regulatory and enforcement body, the AER
established by Part IIIAA of the Competition and Consumer Act 2010
(Cth), which currently regulates electricity and gas transmission and
distribution;
· a national rule making and market development body, the AEMC
established by the Australian Energy Market Commission
Establishment Act 2004 (SA), which currently oversees the National
Electricity Rules and the National Gas Rules;
· the Australian Energy Market Operator (AEMO), a corporate entity
limited by guarantee under the Corporations Act 2001 (Cth), which
manages the National Electricity Market (NEM), the retail and
wholesale gas markets of eastern and southern Australia and the Short
Term Trading Market for gas; oversees system security of the NEM
electricity grid and the Victorian gas transmission network; and has
responsibility for national transmission planning; and
· State and Territory regulatory agencies for electricity and gas, currently
covering electricity and gas distribution licensing, and retail regulation,
most of which will pass to national bodies with the implementation of
the Customer Framework (of which this Bill is a part).
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New regulatory arrangements
4. The South Australian Parliament passed the National Energy Retail Law
(South Australia) Bill 2010 (SA) on 9 March 2011. That Bill received Royal
Assent on 17 March 2011. The National Energy Retail Law (South
Australia) Act 2011 (SA), includes as its Schedule the National Energy Retail
Law, which provides for Rules and regulations to be made under that Law
called the National Energy Retail Rules and the National Energy Retail
Regulations.
5. The National Energy Retail Law set out in the Schedule to the National
Energy Retail Law (South Australia) Act 2011 (SA), and the Rules and
Regulations to be made under it, are supported by amendments to the
National Electricity Law and the National Gas Law included in the Statutes
Amendment (National Energy Retail Law) Act 2011 (SA). The South
Australian Minister will also make rules making 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.
6. Together the National Energy Retail Law set out in the Schedule to the
National Energy Retail Law (South Australia) Act 2011 (SA), the Rules and
Regulations made under it and the consequential amendments to the national
electricity and national gas regimes is known as the National Energy
Customer Framework. The Customer Framework will be applied in all
jurisdictions which are part of the NEM, namely, South Australia, Victoria,
New South Wales, the Australian Capital Territory, Tasmania, Queensland,
as well as the Commonwealth, by application Acts. The Ministerial Council
on Energy (MCE) has agreed that jurisdictions will aim for a target uniform
commencement date for the Customer Framework of 1 July 2012, noting that
transitional legislative arrangements will be required to appropriately manage
the transition process.
Application of National Energy Retail Law in Australia's offshore area
7. This Bill will amend the Australian Energy Market Act 2004 (Cth) to apply
the National Energy Retail Law, set out in the Schedule to the National
Energy Retail Law (South Australia) Act 2011 (SA), as a law of the
Commonwealth in Australia's offshore area (essentially, the area from 3
nautical miles offshore to the edge of the continental shelf). It will similarly
apply the National Energy Retail Rules and the National Energy Retail
Regulations, which are each made under the National Energy Retail Law, as
Commonwealth law.
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8. Under this cooperative scheme, State and Territory laws will confer functions
on a range of Commonwealth persons and authorities, namely the:
· AER; and
· ACT.
The Commonwealth needs to legislatively provide for this conferral to take
place. The Bill anticipates that State and Territory laws may confer functions
on the Minister responsible for the Australian Energy Market Act 2004 (Cth).
9. This Bill inserts new sections 11V, 11W, 11X and 11Y into the Australian
Energy Market Act 2004 (Cth) setting out how functions and powers are
conferred by the National Energy Retail Law on the AEMC, AER, ACT and
the Commonwealth Minister when applied as Commonwealth law.
10. This Bill also amends section 13F to clarify that any instrument made under
the National Energy Retail Law, or the National Energy Retail Regulations, is
not considered to be a legislative instrument for the purposes of the
Legislative Instruments Act 2003 (Cth), and so cannot be disallowed by the
Commonwealth Parliament. This reflects the legal status of these instruments
because they are applied by and not made under a Commonwealth law.
Additionally, if those instruments were to be made legislative instruments
under the Legislative Instruments Act 2003 (Cth), an instrument made under
the various state regimes would be disallowable in Commonwealth
Parliament, which would undermine the cooperative nature of the scheme.
11. The Bill also amends section 13G of the Australian Energy Market Act 2004
(Cth) to confer jurisdiction on the Federal Court with respect to civil and
criminal matters arising under the National Energy Retail Law, and
regulations made under that law, when applied as a law of the
Commonwealth.
12. The Bill inserts new sections 13K and 13M into the Australian Energy
Market Act 2004 (Cth), which will validate and give effect to instruments or
decisions made by the AER in preparation for the application of the Customer
Framework. Broadly, they will apply to decisions and instruments that the
AER would have been authorised to make, had the Customer Framework
started to apply as Commonwealth law, and will ensure those decisions and
instruments are valid and effective for the purposes of the Customer
Framework once applied by the Commonwealth.
13. The Bill inserts new sections 13L and 13N into the Australian Energy Market
Act 2004 (Cth), which will deem the AER to have complied with the
requirement for any preparatory step (that would have been required had the
Customer Framework started to apply) taken before making an instrument or
decision of this kind.
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Amendments to the Competition and Consumer Act 2010
14. The Bill empowers the AER and the ACT to exercise functions or carry out
duties conferred under the National Energy Retail Law when applied as State
or Territory law, by amending the definition in the Competition and
Consumer Act 2010 (Cth) of "uniform energy law" to include the National
Energy Retail Law.
15. The Bill provides for the conferral of functions and powers, and the
imposition of duties, on the AER under "local energy instruments", being a
range of subordinate instruments made under jurisdictional application Acts
for the National Energy Retail Law, the National Electricity Law and the
National Gas Law. Section 44AI of the Competition and Consumer Act 2010
(Cth) will be amended for this purpose along with the insertion into the
Competition and Consumer Act 2010 (Cth) of a new definition of "local
energy instrument".
Amendment to the Administrative Decisions (Judicial Review) Act 1977
16. This Bill amends Schedule 3 of the Administrative Decisions (Judicial
Review) Act 1977 (Cth) to ensure that decisions made by Commonwealth
bodies, such as the AER and the ACT, under the National Energy Retail Law,
when applied as State or Territory law are subject to judicial review by the
Federal Court and the Federal Magistrates Court.
Delayed Commencement of this Bill
17. There is a need for a delay between the enactment of the agreed national law
by the lead legislator, South Australia, and its application and commencement
in any participating jurisdiction. The need for this delay is to enable each
participating jurisdiction to undertake the significant task of reviewing and
amending jurisdictional energy legislation, as necessary and consequential to
the application of the National Energy Retail Law regime in that jurisdiction.
This implementation period will also enable industry stakeholders and the
national energy regulatory bodies to prepare for the application and
commencement of the National Energy Retail Law by jurisdictions. For this
reason, the MCE has agreed to a target commencement date for participating
jurisdictions to uniformly commence the National Energy Retail Law, being 1
July 2012.
18. Accordingly, the commencement of the substantive provisions of this Bill
will be delayed until the time that the National Energy Retail Law as set out
in the Schedule to the National Energy Retail Law (South Australia) Act 2011
(SA) starts to apply under an Act of a State or Territory. Delaying the
commencement of the Bill in this manner will ensure that the
Commonwealth's application and commencement of the Customer
Framework will be in accordance with the target uniform commencement
date.
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Delegation of Legislative Power
19. Bills Digest (No. 171 of 2003-04) for the Australian Energy Market Bill 2004
(now the Australian Energy Market Act 2004 (Cth)) prepared by the
Parliamentary Library raised issues about the constitutionality of that Bill.
Specifically, the Digest discussed possible difficulties with the delegation of
Commonwealth legislative power to South Australia under the Bill.
20. The Bill is not open to constitutional objection on the ground that it involves
an abdication of legislative power by the Commonwealth. This is supported
by both long-standing and recent High Court decisions, and a number of
legislative precedents.
21. Arguments that a State had invalidly abdicated its authority by `picking up'
and applying a Commonwealth law have been comprehensively rejected by
the High Court in cases on the old Corporations Law scheme (R v Hughes
(2000) 202 CLR 535 at 551; Byrnes v R (1999) 199 CLR 1 at 11; see also the
cases cited in Byrnes).
22. The unanimous decision by all seven members of the High Court, including
Dixon CJ, in Hooper v Hooper (1955) 91 CLR 529 is also directly relevant.
In that case, the Court upheld the validity of a Commonwealth Act that
created rights to dissolution of a marriage by `picking up' the applicable State
law, and applying it as Commonwealth law in a slightly modified form. The
Court said at 537:
The Act might ... have defined the rights to which effect was to be
given in `matrimonial causes' by enacting a system of its own. Or it
might have defined those rights by reference to the law of England or
the law of New Zealand or the law of one particular Australian State.
The fact that it chose to adopt the law of the State of the domicile in
each particular case cannot affect the substance of the matter.
(Emphasis added.)
23. There are numerous legislative precedents for the Commonwealth `picking
up' and applying State laws including the Commonwealth Places
(Application of Laws) Act 1970, the Crimes at Sea Act 2000, and the
Judiciary Act 1903.
FINANCIAL IMPACT STATEMENT
24. The Bill will have no financial impact.
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NOTES ON CLAUSES
PRELIMINARY
Clause 1: Short title
1. Clause 1 is a formal provision specifying the short title of the Bill. The Act
will be called the Australian Energy Market Amendment (National Energy
Retail Law) Act 2011.
Background to clause 2
2. This Bill ties the application of the substantive amendments to
Commonwealth legislation the Bill makes to the application of the National
Energy Retail Law by another participating jurisdiction. This is designed to
ensure that the Commonwealth's application and commencement of the
Customer Framework will be in accordance with the proposed uniform target
commencement date for the National Energy Retail Law proposed by the
MCE, of 1 July 2012. (Although note the specific commencement of items
12 and 13 of Schedule 2 which are discussed further below under clause 2).
3. This will also ensure that enactment of this Bill does not trigger the
substantive operation of the AEMC's rule change functions under the
National Energy Retail Law, simply because the National Energy Retail Law
has been applied and commenced by the Commonwealth before other
jurisdictions. This will enable the proposed National Energy Retail Rules to
remain as endorsed by the MCE on 11 October 2010 up to the time that the
first State or Territory applies the National Energy Retail Law. Industry
participants and national regulatory bodies will therefore have certainty as to
the requirements of the new regulatory framework, while they undertake their
readiness preparations for the commencement of the Customer Framework in
mid 2012.
4. Table items 2, 3 and 5 are in similar terms and, as explained above, are
intended to ensure that the amendment of Commonwealth legislation
provided for in this Bill (and as referred to in each table item), commences at
the time that the National Energy Retail Law starts to apply under an Act of
another participating jurisdiction.
5. Table item 4 deals with the circumstance where the Australian Energy Market
Agreement (AEMA) is relevantly amended to provide for a process by which
a local energy instrument may confer functions or powers, or impose duties,
on the AER. The commencement provisions in clause 2, along with items 12
and 13 of Schedule 2 of this Bill, anticipate that the AEMA may not have
been relevantly amended for this purpose prior to the commencement of the
National Energy Retail Law in the first other participating jurisdiction.
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Clause 2: Commencement
6. Subclause (1) provides for the commencement of each provision of the Bill in
accordance with column 2 of the table.
Table item 1
7. Table item 1 provides that sections 1 to 3 and anything in this Bill not
elsewhere covered by the table commences on the day that the Bill receives
the Royal Assent.
Table item 2
8. Table item 2 provides that Schedule 1 (amendments to the Australian Energy
Market Act 2004 (Cth)) commences on the later of:
a) the start of the day the Bill receives the Royal Assent; and
b) the time, or the earliest time, that the National Energy Retail Law as
set out in the Schedule to the National Energy Retail Law (South
Australia) Act 2011 of South Australia starts to apply under an Act of
a State or of the Australian Capital Territory or the Northern
Territory.
However the provision(s) do not commence at all if the event mentioned in
paragraph (b) does not occur. The Minister must announce by notice in the
Gazette the day of the event mentioned in paragraph (b).
9. The statement in this (and each subsequent) item of the commencement table
that the Gazette notice is not a legislative instrument is included to assist
readers, as those instruments are not legislative instruments within the
meaning of section 5 of the Legislative Instruments Act 2003 (Cth).
Table items 3 and 5
10. Together table items 3 and 5 provide for the commencement of the
amendments to the Commonwealth legislation set out in Schedule 2; with the
exception of items 12 and 13 of Schedule 2 which are dealt with separately in
item 4 of the commencement table.
11. Specifically, table item 3 provides for the commencement of items 1-11 of
Schedule 2, and table item 5 provides for the commencement of items 14-15
of Schedule 2, on the later of:
a) the start of the day the Bill receives the Royal Assent; and
b) the time, or the earliest time, that the National Energy Retail Law as
set out in the Schedule to the National Energy Retail Law (South
Australia) Act 2011 of South Australia starts to apply under an Act of
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a State or of the Australian Capital Territory or the Northern
Territory.
However the provision(s) do not commence at all if the event mentioned in
paragraph (b) does not occur. The Minister must announce by notice in the
Gazette the day of the event mentioned in paragraph (b).
12. As noted above, the statement in each table item that the Gazette notice is not
a legislative instrument is included to assist readers, as those instruments are
not legislative instruments within the meaning of section 5 of the Legislative
Instruments Act 2003 (Cth).
Table item 4
13. Table item 4 deals with the commencement of items 12 and 13 of Schedule 2
of this Bill. Item 12 will repeal subsection 44AI(4) of the Competition and
Consumer Act 2010 (Cth) and substitute a revised subsection 44AI(4) if a
relevant amendment of the AEMA occurs.
14. Subsection 44AI(4) is inserted into the Competition and Consumer Act 2010
(Cth) by item 11 of Schedule 2 of this Bill. Item 11 will amend section 44AI
to include new subsections (4) and (5) to provide for the conferral of
functions and powers, and the imposition of duties, on the AER under a local
energy instrument (see relevant definition in item 3 of Schedule 2).
Subsection 44AI(4), as amended by item 11, will operate so that a local
energy instrument may confer functions or powers, or impose duties on the
AER if the instrument is prescribed by the regulations for the purposes of this
subsection. The policy reasons for this amendment are set out at item 11 of
Schedule 2 below.
15. An alternative and less administratively burdensome, but appropriate, process
to prescribing these kinds of instruments under the Competition and
Consumer Act 2010 (Cth), is for the AEMA to provide a process for
functions, powers or duties to be conferred or imposed on the AER under a
local energy instrument. In that event, it would not be necessary or
appropriate for the relevant instrument to be prescribed by regulation. Item
12 of Schedule 2 of this Bill provides that, if the AEMA is relevantly
amended, then subsection 44AI(4) (providing for prescription by
Commonwealth regulation) will be repealed and replaced by a revised
subsection 44AI(4). The substituted provision will operate so that a local
energy instrument may confer functions or powers, or impose duties, on the
AER only if the instrument is designated for the purposes of subsection
44AI(4) under the AEMA, or any other relevant agreement between the
Commonwealth and the State or Territory that makes the instrument. Item 4
of the commencement table in clause 2 of this Bill provides for this repeal
and substitution of subsection 44AI(4) to occur.
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16. Specifically, item 4 of the table in subclause (1) provides that item 12 and
item 13 commence on the later of:
a) immediately after the time the provisions covered by table item 3
commence (being the time that the National Energy Retail Law starts
to apply under an Act of a jurisdiction other than the Commonwealth);
and
b) the time the AEMA, or any other relevant agreement between the
Commonwealth and a State or Territory, is amended to provide for the
designation of instruments for the purposes of subsection 44AI(4) of
that Act (as substituted by item 12 of Schedule 2 to this Bill).
However, the provision(s) do not commence at all if the event mentioned
in paragraph (b) has not occurred before the end of 12 months after the
commencement of subsection 44AI(4) of that Act (as added by item 11 of
Schedule 2 to this Act). The Minister must announce by notice in the
Gazette the day of the event mentioned in paragraph (b).
17. As noted above, the statement that the Gazette notice is not a legislative
instrument is included to assist readers, as those instruments are not
legislative instruments within the meaning of section 5 of the Legislative
Instruments Act 2003 (Cth).
18. The effect of item 4 of the commencement table is that subsection 44AI(4), as
inserted by item 11, can only be repealed and substituted after both the events
in paragraphs (a) and (b) occur. That is, the rest of this Bill must have
commenced (because another jurisdiction has applied and commenced the
National Energy Retail Law); and the AEMA (or another relevant agreement)
is amended to provide for the designation of local energy instruments for the
purposes of subsection 44AI(4) of the Competition and Consumer Act 2010
(Cth) (as substituted by item 12 of Schedule 2 of this Bill).
19. If the AEMA has not been amended before the date the National Energy
Retail Law starts to apply under the law of another jurisdiction (and is
therefore also applied by the Commonwealth), then subsection 44AI(4) as
inserted by item 11 (and providing for prescription by Commonwealth
regulation) will operate until such time as that amendment occurs. However,
the AEMA must be amended before the end of 12 months after the
commencement of subsection 44AI(4) as added by item 11, or items 12 and
13 of this Bill will not commence at all. The 12 month period which is
referred to in item 4 of the table, appropriately identifies a period within
which the substitution must occur, and provides certainty to the operation of
clause 2 of this Bill.
20. In the event the AEMA is amended before the date the rest of this Bill
commences, then subsection 44AI(4) (as substituted by item 12 of Schedule
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2) will commence immediately upon the date the rest of the Bill commences
in accordance with clause 2 of this Bill.
Clause 3: Schedule(s)
21. This clause provides that each Act that is specified in a Schedule to this Bill
is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has effect according
to its terms.
Schedule 1 - Australian Energy Market Act 2004
22. Items 1 - 10 insert a series of definitions which clarify the meaning of each
term.
Item 1 - Section 3
23. Item 1 of Schedule 1 inserts a new definition of 'National Energy Retail Law
and Regulations (Commonwealth)' into the Australian Energy Market Act
2004 (Cth), which means the National Energy Retail Law and Regulations
when applied as a law of the Commonwealth.
Item 2 - Section 3
24. Item 2 inserts a new definition of 'National Energy Retail Law
(Commonwealth)' into the Australian Energy Market Act 2004 (Cth), which
means the National Energy Retail Law when applied as a law of the
Commonwealth, as provided in the new section 11T of the Australian Energy
Market Act 2004 (Cth), which will be inserted by this Bill. New subsection
11T(2) of the Australian Energy Market Act 2004 (Cth) clarifies that the
reference in subsection (1) of section 11T to the National Energy Retail Law
set out in the Schedule to the National Energy Retail Law (South Australia)
Act 2011 of South Australia, as amended from time to time, includes a
reference to any Rules or other instruments, as amended from time to time,
made or having effect under that Law. There is therefore no need to
separately provide a definition for the Rules.
Item 3 - Section 3
25. 'National Energy Retail Regulations (Commonwealth)' means the National
Energy Retail Regulations, as amended from time to time, made under Part
11 of the National Energy Retail Law set out in the Schedule to the National
Energy Retail Law (South Australia Act 2011 (SA) when applied as a law of
the Commonwealth, as provided for in the new section 11U of the Australian
Energy Market Act 2004 (Cth), which will be inserted by this Bill.
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Item 4 - Section 3
26. 'South Australian Energy Retail Legislation' means the National Energy
Retail Law set out in the Schedule to the National Energy Retail Law (South
Australia) Act 2011 of South Australia, as amended from time to time and
any regulations, as amended from time to time, made under Part 11 of the
National Energy Retail Law. The definition clarifies that the reference in
paragraph (a) of the definition to the National Energy Retail Law set out in
the Schedule to the National Energy Retail Law (South Australia) Act 2011 of
South Australia, as amended from time to time, includes a reference to any
Rules or other instruments, as amended from time to time, made or having
effect under that Law, in particular the National Energy Retail Rules.
Item 5 - Section 3
27. The definition of "State/Territory energy law" in the Australian Energy
Market Act 2004 (Cth) is amended to add new paragraph (c) referring to "a
State/Territory energy retail law". The expansion is relevant to the conferral
of functions and powers and imposition of duties on the Commonwealth
Minister as provided for by sections 13A to 13C.
Item 6 - Section 3
28. "State/Territory energy retail law" means South Australian Energy Retail
Legislation, as it applies as a law of South Australia, or as it applies as a law
of another State or as it applies as a law of the Australian Capital Territory or
the Northern Territory.
Item 7- Section 3
29. The definition of "uniform energy law" is expanded to include the South
Australian Energy Retail Legislation.
Item 8 - Section 4-Crown to be bound
30. Section 4 of the Australian Energy Market Act 2004 (Cth) will be amended to
refer also to the National Energy Retail Law and Regulations
(Commonwealth), with the effect that the National Energy Retail Law and
Regulations, as they apply as laws of the Commonwealth, bind the Crown in
each of its capacities. With the addition of the new National Energy Retail
Law regime to cooperative arrangements between the Commonwealth and the
States and Territories it is appropriate to include reference to the new
National Energy Retail Law regime in this section.
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Item 9 - Section 5-Extra-territorial operation
31. A note is to be inserted at the end of section 5 which clarifies that section 17
of the National Energy Retail Law (Commonwealth) provides for the extra-
territorial operation of the National Energy Retail Law (Commonwealth).
32. Section 17 of the National Energy Retail Law provides for the extra-territorial
operation of that Law. This is the first time in the national energy market
cooperative regimes that provision for extra-territorial operation has been
included in the applied law itself. By contrast, under the national electricity
regime and the national gas regime, this provision is made in the application
Acts of each participating jurisdictions - see, for example, section 5 of the
Australian Energy Market Act 2004 (Cth) in respect of the Commonwealth.
33. New section 11Z of the Australian Energy Market Act 2004 (Cth), to be
inserted by this Bill, concerns matters of interpretation in relation to the
National Energy Retail Law as it is applied as a law of the Commonwealth.
Subsection 11Z(4) clarifies the interpretation of section 17 of the National
Energy Retail Law, when applied as a law of the Commonwealth, and
provides that nothing in section 17 has effect in relation to the sale and supply
of energy outside the territorial limits of all the participating jurisdictions for
the purposes of the National Energy Retail Law (Commonwealth).
Item 10 - New Division 2A-Energy retail laws
34. This item inserts new Division 2A of Part 2 into the Australian Energy
Market Act 2004 (Cth) in its entirety. Division 2A applies the National
Energy Retail Law and Regulations as Commonwealth law in the offshore
areas, as well as confers functions and powers, and imposes duties, on
Commonwealth persons and authorities. The new Division also provides for
the validation of certain instruments and decisions of the AER made before
the National Energy Retail Law commences operation.
New section 11T -Application of National Energy Retail Law in offshore areas etc.
35. New section 11T applies the National Energy Retail Law, as set out in the
Schedule of the National Energy Retail Law (South Australia) Act 2011 (SA),
as a law of the Commonwealth in the offshore area of each State and
Territory. This ensures that the jurisdiction of the Commonwealth does not
overlap with State or Territory jurisdictions. This section applies the National
Energy Retail Law as a law of the Commonwealth in the same manner as
section 6 of the Australian Energy Market Act 2004 (Cth) currently applies
the National Electricity Law set out in the Schedule to the National
Electricity (South Australia) Act 1996 (SA), with the exception that it is
applied "as amended from time to time" (see discussion below). It is also
broadly similar to the Commonwealth's application of the National Gas Law
set out in the Schedule to the National Gas (South Australia) Act 2008 (SA),
which is applied in the offshore areas (with the particular exception of the
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application of Commonwealth law to an offshore Western Australian
pipeline) and in the external Territories of Christmas Island and Cocos
(Keeling) Islands by section 11A of the Australian Energy Market Act 2004
(Cth).
36. New subparagraph 11T(1)(a)(ii) also provides for the Commonwealth to
apply the National Energy Retail Law in any other places, to any
circumstances, or to any persons, that are prescribed by Commonwealth
regulations in the same manner as subparagraph 6(a)(ii) of the Australian
Energy Market Act 2004 (Cth) does for the National Electricity Law and
subparagraph 11A(1)(a)(ix) of that Act does for the National Gas Law.
37. Subsection (2) clarifies that the reference in subsection (1) to the National
Energy Retail Law set out in the Schedule to the National Energy Retail Law
(South Australia) Act 2011 (SA), as amended from time to time, includes a
reference to any Rules or other instruments, as amended from time to time,
made or having effect under that Law, in particular the National Energy
Retail Rules.
38. The application of the National Energy Retail Law (and the Rules and
Regulations made under it) are applied as a law of the Commonwealth "as
amended from time to time". This application is on a different basis to the
application of the National Electricity Law and the National Gas Law by
sections 6 and 11A of the Australian Energy Market Act 2004 (Cth), which
are applied "as in force from time to time". The need to apply the National
Energy Retail Law on an "as amended" basis is due to the unique
circumstances of the delayed commencement of the National Energy Retail
Law, discussed in detail above. This is the first occasion where South
Australia, the lead legislator, has enacted the agreed national law, without
applying and commencing it for the purposes of South Australia at the time of
its enactment. As explained above, it has been necessary to delay the
commencement of the National Energy Retail Law to provide sufficient time
for jurisdictions to provide for its legislative implementation and for
regulatory bodies and industry participants to have sufficient preparation time
to transition to the new regulatory regime.
39. Although jurisdictions are working towards a uniform date for the
commencement of the National Energy Retail Law nationally, the application
of the National Energy Retail Law "as amended from time to time" provides
sufficient certainty that the Commonwealth's application will be effective, if
that uniform commencement does not occur. Specifically, it will not matter
for the Commonwealth's application of the National Energy Retail Law, if
that Law is not relevantly "in force" in South Australia. This may occur, for
example, if, as a result of the application of the National Energy Retail Law
by a jurisdiction other than South Australia the Commonwealth applied
National Energy Retail Law commences. Application of the National Energy
Retail Law "as amended from time to time" makes it irrelevant that the South
Australian law is not in force. Further, any amendments to the Law in South
17
Australia will be automatically incorporated and applied for the purposes of
the National Energy Retail Law as it is applied under this section 11T.
40. Changes to the National Energy Retail Law (Commonwealth) will not be
directly subject to Parliamentary scrutiny. Rather, the Commonwealth, States
and Territories have agreed to apply the provisions of the new National
Energy Retail Law regime uniformly. All jurisdictions (other than Western
Australia and the Northern Territory) will therefore apply the same National
Energy Retail Law established by the National Energy Retail Law (South
Australia) Act 2011 (SA). This National Energy Retail Law, and any changes
to it, will be subject to full scrutiny by the South Australian Parliament. The
Commonwealth Parliament will scrutinise the application of the National
Energy Retail Law by the Commonwealth in this Bill, but will not otherwise
consider changes to the National Energy Retail Law. Other States and
Territories will similarly scrutinise their application of the National Energy
Retail Law through the passage of their application Acts. The regulations
made under Part 11 of the National Energy Retail Law set out in the Schedule
to the National Energy Retail Law (South Australia) Act 2011 (SA), and the
National Energy Retail Rules made under the National Energy Retail Law,
will not be subject to Parliamentary disallowance in each jurisdiction.
41. Further the Commonwealth has certain controls over the laws to be applied.
Under the AEMA, the National Energy Retail Law, and regulations made
under it, may only be amended with the unanimous agreement of the MCE.
Therefore the National Energy Retail Law, and regulations made under it, can
only be amended with the consent of the relevant Commonwealth Minister.
42. Under South Australia's Australian Energy Market Commission
Establishment Act 2004, the Commonwealth nominates one of the three
members of the AEMC, which is responsible for changes to the National
Energy Retail Rules. Further, under subsection 14(3) of the Australian
Energy Market Act 2004 (Cth), the Commonwealth has the power to modify
or adapt the National Energy Retail Law (Commonwealth) or the National
Energy Retail Regulations (Commonwealth) through regulations made under
the Australian Energy Market Act 2004 (Cth). Such modification or
adaptation of the National Energy Retail Law regime through regulation is
subject to disallowance in the usual manner in the Commonwealth
Parliament.
New section 11U - Application of National Energy Retail Regulations in offshore
areas etc.
43. Section 11U applies the regulations, made under Part 11 of the National
Energy Retail Law (South Australia) Act 2011 (SA), as amended from time to
time for the purposes of the National Energy Retail Law (Commonwealth).
This means that they will only be applied in geographical areas or other
situations where the National Energy Retail Law (Commonwealth) applies.
This clause also provides that these regulations, when in force as
18
Commonwealth law, may be referred to as the National Energy Retail
Regulations (Commonwealth).
New section 11V - Functions and Powers of the Australian Energy Market
Commission under the National Energy Retail Law and Regulations
(Commonwealth)
44. Section 11V provides the AEMC has the functions and powers conferred on it
under the National Energy Retail Law and Regulations (Commonwealth).
Any delegation by the AEMC is taken to extend to and have effect for the
purposes of that law and those regulations. The purpose of this new section is
essentially the same as that of existing section 9 of the Australian Energy
Market Act 2004 (Cth) which applies for the national electricity regime, and
section 11C which applies for the national gas regime, except that it applies
for the new National Energy Retail Law regime. Section 11V ensures that the
AEMC, which is a South Australian statutory body, is able to perform the
functions, and exercise the powers, conferred on it under Commonwealth
law.
New section 11W - Functions and Powers of the Australian Energy Regulator under
the National Energy Retail Law and Regulations (Commonwealth)
45. Section 11W ensures that the AER may perform the functions and powers
conferred on it by the National Energy Retail Law and Regulations
(Commonwealth). Any delegation by the AER is taken to extend to and have
effect for the purposes of that law and those regulations. The purpose of this
new section is essentially the same as that of existing section 10 which
applies for the national electricity regime, and section 11D which applies for
the national gas regime, except that it applies for the new National Energy
Retail Law regime.
New section 11X - Functions and powers of the Australian Competition Tribunal
under the National Energy Retail Law and Regulations (Commonwealth)
46. Section 11X ensures that the ACT may perform the functions and powers
conferred on it by the National Energy Retail Law and Regulations
(Commonwealth). The purpose of this new section is essentially the same as
that of section 10A which applies for the national electricity regime, and
section 11F which applies for the national gas regime, except that it applies
for the new National Energy Retail Law regime.
New section 11Y - Functions and powers of the Commonwealth Minister under the
National Energy Retail Law and Regulations (Commonwealth)
47. Section 11Y ensures that the Commonwealth Minister may perform the
functions and powers conferred on him or her under the National Energy
Retail Law and Regulations (Commonwealth). The purpose of this new
section is essentially the same as section 10B which applies for the national
19
electricity regime, and section 11G which applies for the national gas regime,
except that it applies for the new National Energy Retail Law regime. Any
delegation by the Commonwealth Minister is taken to extend to and have
effect for the purposes of the National Energy Retail Law and Regulations
(Commonwealth).
New section 11Z - Interpretation of some expressions in the National Energy Retail
Law and Regulations (Commonwealth) etc.
48. Subsection 11Z(1) defines some terms that apply for the purposes of the
National Energy Retail Law and Regulations (Commonwealth).
49. The reference to either the National Energy Retail Law or this Law in the
National Energy Retail Law and Regulations (Commonwealth) is taken to
mean the National Energy Retail Law as it is applied by the Commonwealth;
that is, the National Energy Retail Law (Commonwealth).
50. References to the jurisdiction or this jurisdiction means the Commonwealth.
51. Subsection 11Z(2) provides that the Acts Interpretation Act 1915 of South
Australia, and other Acts of South Australia, do not apply to the National
Energy Retail Law and Regulations (Commonwealth). The rationale for this
subsection is to clarify that although the National Energy Retail Law is in
South Australian legislation, that Law and the regulations made under it, as
they are applied by the Commonwealth, are not subject to the general
interpretative provisions of other South Australian legislation. Rather,
section 8 of the National Energy Retail Law applies the interpretative
provisions in Schedule 2 of the National Gas Law to the National Energy
Retail Law, the National Energy Retail Regulations, the National Energy
Retail Rules and any other statutory instrument made under the National
Energy Retail Law in the same way as it applies to the National Gas Law and
the regulations, rules and any other statutory instruments made under the
National Gas Law.
52. Subsection (3) clarifies that the reference in paragraph (2)(a) to the National
Energy Retail Law set out in the Schedule to the National Energy Retail Law
(South Australia) Act 2011 (SA) includes a reference to any Rules or other
instruments made or having effect under that Law, in particular the National
Energy Retail Rules.
53. As mentioned in the explanation under item 9, subsection (4) clarifies the
interpretation of section 17 of the National Energy Retail Law, when applied
as a law of the Commonwealth, and provides that nothing in section 17 has
effect in relation to the sale and supply of energy outside the territorial limits
of all the participating jurisdictions for the purposes of the National Energy
Retail Law (Commonwealth). The purpose of this provision is to clarify that
the National Energy Retail Law extra-territoriality provision is not intended
to operate so that the National Energy Retail Law regime could have effect in
20
relation to the sale and supply of energy outside the territorial limits of all the
participating jurisdictions.
Item 11 - Section 13 - Application of the Administrative Decisions (Judicial Review)
Act 1977
54. Existing section 13 already operates so that decisions made under the
National Electricity (Commonwealth) Law and Regulations and decisions
made under the National Gas (Commonwealth) Law and Regulations, and the
Offshore Western Australian (Commonwealth) Law and Regulations, are
reviewable under the Administrative Decisions (Judicial Review) Act 1977
(Cth). Item 11 of this Bill expands the application of section 13 to bring
decisions made under the National Energy Retail Law (Commonwealth) and
the National Energy Retail Regulations (Commonwealth) within the ambit of
the Administrative Decisions (Judicial Review) Act 1977 (Cth) and subject to
judicial review under that Act. Such decisions could include decisions by the
AER, the ACT and the Commonwealth Minister.
Items 12 and 13 - Section 13B - How duty is imposed
55. Section 13B of the Australian Energy Market Act 2004 (Cth) provides for
how a duty is imposed on the Commonwealth Minister under a
State/Territory energy law. Items 12 and 13 of the Bill insert a new Note 2 to
subsection 13B(1) of the Australian Energy Market Act 2004 (Cth) and make
a consequential change to the existing note numbering.
56. The new Note 2 cross-refers to the specific reading down provision in section
320 of the National Energy Retail Law. The note clarifies that section 320 of
a State/Territory energy retail law deals with the case where a duty
purportedly imposed on the Commonwealth Minister under that law cannot
be imposed by the State or Territory or the Commonwealth due to
constitutional doctrines restricting such duties.
57. Existing sections 13A to 13C of the Australian Energy Market Act 2004 (Cth)
regulate the extent to which the State and Territory energy law may confer
powers and functions and impose duties upon the Commonwealth Minister in
light of the decision in R v. Hughes (2000) 202 CLR 535. As earlier noted,
State/Territory energy law is expanded by item 5 of this Bill to include a
State/Territory energy retail law within the scope of the relevant laws
conferring the functions and powers and imposing the duties on the
Commonwealth Minister.
Item 14 - Section 13F - Legislative instruments
58. This item amends section 13F of the Australian Energy Market Act 2004
(Cth) to make it clear that an instrument that is made or has effect under the
National Energy Retail Law, or Regulations, as applied by the
21
Commonwealth, is not to be taken to be a legislative instrument for the
purposes of the Legislative Instruments Act 2003 (Cth).
59. The National Energy Retail Law and Regulations (Commonwealth) under the
Australian Energy Market Act 2004 (Cth) give effect as Commonwealth law
to primary legislation, regulations, Rules and other instruments established
under the cooperative regime. In particular, they give effect to the National
Energy Retail Rules. To avoid doubt, new subsection 13F(3) ensures that
these Rules and other instruments are not made subject to the Commonwealth
Legislative Instruments Act 2003 (Cth). If that Act were to apply the
cooperative scheme would be rendered unworkable. For example, allowing
the National Energy Retail Rules to be disallowable in Commonwealth
Parliament would undermine the national cooperative nature of the scheme.
Subsection 13F(3) is merely declaratory of the law because all the relevant
Rules and instruments are only applied by and not made under a
Commonwealth enactment, the Australian Energy Market Act 2004 (Cth).
The section is included to clarify that the various applied Rules and
instruments are not legislative instruments within the meaning of section 5 of
the Legislative Instruments Act 2003 (Cth).
Items 15 and 16 - Section 13G - Jurisdiction of the Federal Court
60. This item amends section 13G of the Australian Energy Market Act 2004
(Cth) to extend to the Federal Court jurisdiction with respect to civil and
criminal matters arising under the National Energy Retail Law and
Regulations (Commonwealth), on the same basis as its jurisdiction arising
under the national electricity regime and the national gas regime, as applied
as Commonwealth law.
61. It should be noted that section 44AAG of the Competition and Consumer Act
2010 (Cth) gives the Federal Court general jurisdiction in relation to
proceedings by the AER in relation to breaches of the National Electricity
Law and National Electricity Rules, and the National Gas Law and National
Gas Rules, and the National Energy Retail Law and National Energy Retail
Rules, whether as applied by the Commonwealth or by a State or Territory.
Also, the Federal Court, and the Federal Magistrates Court, have jurisdiction
in relation to decisions by Commonwealth bodies and officers in relation to
the schemes under the Administrative Decisions (Judicial Review) Act 1977
(Cth). State and Territory Supreme Courts also have jurisdiction in relation
to the National Electricity Law and National Electricity Rules, and the
National Gas Law and National Gas Rules, and the National Energy Retail
Law and National Energy Retail Rules, as applied by their State or Territory.
Item 17 - New sections 13K-13N - Validation of instruments and decisions of the
Australian Energy Regulator and authorisation of preparatory steps
62. New sections 13K and 13M provide for the validation of instruments and
decisions made by the AER before the Customer Framework is applied as a
22
Commonwealth law, where the AER makes those instruments or decisions in
preparation for the application and commencement of the Customer
Framework.
63. The provisions apply to instruments and decisions if the AER would have the
power to make those instruments or decisions once the Customer Framework
had started to apply as Commonwealth law. The provisions only apply where
the AER makes the instruments or decisions in accordance with any
requirements that would apply if Commonwealth law applying the Customer
Framework had commenced. This would require, for example, the AER to
make an instrument, such as the AER Retailer Authorisation Guidelines (see
section 117 of the National Energy Retail Law), in accordance with the retail
consultation procedure set out in the National Energy Retail Rules, even
though the AER purports to make that guideline before the Customer
Framework applies as a Commonwealth law.
64. New sections 13L and 13N deem the AER to have complied with a
requirement to do something before making a relevant decision or instrument
if the thing was required by the relevant aspect of the Customer Framework
and the AER has taken that step within the time period noted in the next
following paragraph.
65. Sections 13K-13N only apply to instruments and decisions made by the AER,
and to any relevant preparatory steps taken by the AER, within a specific time
period; that is, the period between:
· the time when, relevantly, the National Energy Retail Law (South
Australia) Act 2011 (SA) or the Statutes Amendment (National Energy
Retail Law) Act 2011 (SA) was enacted in South Australia (being 17
March 2011); and
· the "application time", being, relevantly, either the time that the National
Energy Retail Law set out in the Schedule to the National Energy Retail
Law (South Australia) Act 2011 (SA); or
· the amendments to the national electricity regime or the national gas
regime made by the Statutes Amendment (National Energy Retail Law)
Act 2011 (SA),
is applied as a law of the Commonwealth.
As noted earlier, the application time is intended to be the target uniform
commencement date of 1 July 2012.
66. Sections 13K-13N are uniform provisions which will be included, as relevant,
in each jurisdiction's application Acts for the National Energy Retail Law, the
National Electricity Law and the National Gas Law. This will ensure that any
decisions or instruments that the AER makes for the purposes of any part of
23
the Customer Framework, before it commences in jurisdictions, is valid and
effective for the purposes of the Customer Framework as it applies in that
jurisdiction.
New section 13K - Validation of instruments and decisions of Australian Energy
Regulator--energy retail laws
67. Section 13K will give effect to and validate instruments and decisions made
by the AER (within the relevant time period noted in paragraph 65) that
would have been authorised by the National Energy Retail Law and the Rules
and Regulations made under it if they had commenced application as a
Commonwealth law.
68. In broad terms, subsection 13K(1) is intended to validate and give effect to
instruments and decisions of the AER made within the period referred to in
paragraph 65, if the making of the decision or instrument would have been
authorised by the National Energy Retail Law and Regulations
(Commonwealth), if they had started to apply as laws of the Commonwealth.
This section only applies if the AER has done anything that would be
required to be done in making the decision or instrument, if the National
Energy Retail Law and Regulations had started to apply as Commonwealth
laws. This limits the operation of the provisions to circumstances where the
AER has complied with any requirements that would be required by the
authorising law such as consultation or publication requirements. Subsection
13K(2) provides that for the purposes of the National Energy Retail Law and
Regulations (Commonwealth), the instrument or decision is taken to be valid
and has effect from the application time. Subsection 13K(3) provides
examples of instruments and decisions for the purposes of section 13K.
New section 13L - Authorisation of preparatory steps for instruments or decisions of
Australian Energy Regulator--energy retail laws
69. Section 13L deems the AER to have complied with a requirement to do
something (a preparatory step) before making a decision or an instrument
under the National Energy Retail Law (Commonwealth) provided the AER
took the preparatory step within the time period set out in paragraph 65.
New section 13M - Validation of instruments and decisions of Australian Energy
Regulator--electricity and gas laws
70. Section 13M is essentially in the same terms as section 13K, except that it
applies to decisions and instruments that the AER would have the power to
make under the amendments made to the national electricity regime or the
national gas regime by the Statutes Amendment (National Energy Retail Law)
Act 2011 (SA), if the amendments to those regimes had started to apply under
the Australian Energy Market Act 2004 (Cth). For example, section 13M is
intended to give effect to and validate decisions and instruments made by the
AER, before the Customer Framework commences for the purposes of
24
proposed arrangements in relation to new electricity and gas network
connections for retail customers and property developers.
New section 13N - Authorisation of preparatory steps for instruments or decisions of
Australian Energy Regulator--electricity and gas laws
71. Section 13N is in essentially the same terms as section 13L, except that it
deems the AER to have complied with a requirement to do something (a
preparatory step) before making a decision or an instrument under the
National Electricity (Commonwealth) Law and Regulations and the National
Gas (Commonwealth) Law and Regulations, if the amendments to those
regimes made by the Statutes Amendment (National Energy Retail Law) Act
2011 (SA) had started to apply for Commonwealth purposes, provided two
conditions are met. First, the preparatory step would have been required
under either of those national regimes if the amendments made by the
Statutes Amendment (National Energy Retail Law) Act 2011 (SA) had started
to apply for Commonwealth purposes and, secondly, the AER took the
preparatory step within the time period set out in paragraph 65.
Item 18 - Section 14 - Regulations
72. Currently, regulations made under existing subsection 14(3) may amend the
operation of the National Electricity (Commonwealth) Law or Regulations,
the National Gas (Commonwealth) Law or Regulations, or the Offshore
Western Australian Pipelines (Commonwealth) Law or Regulations, or a
prescribed uniform energy law applied as a law of the Commonwealth.
73. New paragraphs 14(3)(cd) and (ce) are inserted to expand this provision so
that regulations may be made to modify or adapt the operation of the National
Energy Retail Law (Commonwealth) and National Energy Retail Regulations
(Commonwealth).
Item 19 - Transitional-regulations
74. This provision gives the Governor-General the power to make regulations
dealing with matters of a transitional, saving, or application nature relating to
the amendments to the Australian Energy Market Act 2004 (Cth) made by
Part 1 of Schedule 1 of the Bill; the National Energy Retail Law and
Regulations (Commonwealth); or the amendments of the South Australian
Electricity Legislation or South Australian Gas Legislation which are made
by the Statutes Amendment (National Energy Retail Law) Act 2011 (SA) that
apply as a law of the Commonwealth under the Australian Energy Market Act
2004 (Cth).
75. The purpose of this provision is to enable the Commonwealth to make
transitional regulations, within the meaning of this provision, for the purposes
of the National Energy Customer Framework as it applies as Commonwealth
law.
25
Schedule 2 - Other amendments
Administrative Decisions (Judicial Review) Act 1977
Item 1 - New Paragraphs 2(db) and 2(dc) of Schedule 3
76. New paragraphs 2(db) and (dc) characterise the National Energy Retail Law
in the Schedule to the National Energy Retail Law (South Australia) Act 2011
(SA) as an "enactment" for the purposes of judicial review of decisions under
the Administrative Decisions (Judicial Review) Act 1977 (Cth) (see paragraph
(ca) of the definition of "enactment" in subsection 3(1) and Schedule 3).
Regulations and Rules under the National Energy Retail Law will also be
enactments (see paragraph (cb) of the definition of "enactment" in subsection
3(1)). The effect of this amendment is that decisions of Commonwealth
officers or authorities under the National Energy Retail Law and National
Energy Retail Rules (when applied as a law of South Australia) will be
subject to judicial review by the Federal Court and the Federal Magistrates
Court under the Administrative Decisions (Judicial Review) Act 1977 (Cth)
(see paragraph (b) of the definition of "decision to which this Act applies" in
subsection 3(1)). Relevant Commonwealth authorities include the AER and
the ACT.
77. Paragraph 2(dc) characterises an Act of a State or Territory other than South
Australia that applies the National Energy Retail Law as law in that
jurisdiction as an "enactment" for the purposes of judicial review under the
Administrative Decisions (Judicial Review) Act 1977 (Cth). The effect of this
amendment is that decisions of Commonwealth officers or authorities under
the National Energy Retail Law and National Energy Retail Rules, when
applied in that jurisdiction, will be subject to judicial review under the
Administrative Decisions (Judicial Review) Act 1977 (Cth).
Competition and Consumer Act 2010
78. Items 2 - 10 insert or amend a series of definitions into subsection 4(1) of the
Competition and Consumer Act 2010 (Cth), including to appropriately define
the new National Energy Retail Law regime in the Competition and
Consumer Act 2010 (Cth).
Item 2
79. The definition of "designated Commonwealth energy law" is amended to
capture the National Energy Retail Law regime to the extent it is applied by
the Commonwealth. Specifically, this definition includes the National
Energy Retail Law and Regulations (Commonwealth) as defined by the
Australian Energy Market Act 2004 (Cth).
26
Item 3
80. "local energy instrument" is defined to mean a regulation, rule, order,
declaration or other instrument, if the instrument is made or has effect under a
law of a State or Territory; and the law of the State or Territory applies a
uniform energy law as a law of its own jurisdiction.
Item 4
81. The definition of "South Australian Energy Retail Legislation" is a new
definition inserted into subsection 4(1) of the Competition and Consumer Act
2010 (Cth) for the purpose of capturing the National Energy Retail Law set
out in the Schedule to the National Energy Retail Law (South Australia) Act
2011 of South Australia, as amended from time to time, and the regulations
made under that Act. The definition clarifies that the reference in paragraph
(a) of the definition to the National Energy Retail Law set out in the Schedule
to the National Energy Retail Law (South Australia) Act 2011 of South
Australia as amended from time to time, includes a reference to any Rules or
other instruments, as amended from time to time, made or having effect under
that Law.
Item 5
82. The definition of "uniform energy law" in subsection 4(1) of the
Competition and Consumer Act 2010 (Cth) is extended to include the South
Australian Energy Retail Legislation, being the National Energy Retail Law
set out in the Schedule to the National Energy Retail Law (South Australia)
Act 2011 (SA), the regulations made under Part 11 of the National Energy
Retail Law, and any Rules or other instruments made or having effect under
the National Energy Retail Law.
Items 6-13 - Amendments to section 44AI
83. Items 6-13 amend section 44AI of the Competition and Consumer Act 2010
(Cth) to extend the Commonwealth's consent under that section to the
conferral of functions etc on the AER by a local energy instrument. This is in
addition to the consent to the conferral of functions etc on the AER by a
"State/Territory energy law". To reflect the expansion of the
Commonwealth's consent under section 44AI, item 6 inserts a new heading to
subsection 44AI(1), 'General Rule'.
84. Any new function, power or duty conferred or imposed on the AER has the
potential to be significant for the AER in terms of resourcing costs, technical
capacity, or the expertise required to implement the new obligation, even
when imposed or conferred under a local energy instrument. Accordingly,
the amendments to section 44AI made under this Bill will ensure that the
Commonwealth's consent under that section occurs through a consistent and
transparent process.
27
85. Item 11 will amend section 44AI to include new subsections (4) and (5) to
provide for the conferral of functions and powers, and the imposition of
duties, on the AER under "local energy instruments". As item 3 above
explains, a "local energy instrument" is a regulation, rule, order, declaration
or other instrument, if the instrument is made or has effect under a law of a
State or Territory; and the law of the State or Territory applies the National
Electricity Law, the National Gas Law, or the National Energy Retail Law as
a law of its own jurisdiction. Subsection 44AI(4) will operate so that a local
energy instrument may confer functions or powers, or impose duties, on the
AER if the instrument is prescribed by the regulations for the purposes of this
subsection. Subsection 44AI(5) clarifies that if a State/Territory energy law
is also a local energy instrument, subsection (4) applies to the law.
86. As noted under clause 2 of this Bill above, the Commonwealth considers that
an alternative less administratively burdensome, but appropriate, process to
prescribing these kinds of instruments under the Competition and Consumer
Act 2010 (Cth), would be for the AEMA to be amended to expressly provide
for functions, powers or duties to be conferred or imposed on the AER under
local energy instruments. In that event, prescription of the relevant
instrument by regulation would not be necessary or appropriate.
87. Jurisdictions are acting in good faith to agree a relevant amendment to the
AEMA, which will complement subsection 44AI(4), to require the
unanimous agreement of the MCE to any conferral of functions and powers,
and the imposition of duties, on the AER under the relevant kinds of
subordinate instruments which constitute "local energy instruments".
88. Item 12 of Schedule 2 of this Bill provides that, if the AEMA is relevantly
amended, then subsection 44AI(4) (providing for prescription by
Commonwealth regulation) will be repealed and replaced by the revised
subsection 44AI(4) set out in item 12. The substituted subsection 44AI(4)
will operate so that a local energy instrument may confer functions or powers,
or impose duties, on the AER only if the instrument is designated for the
purposes of this subsection under the AEMA, or any other relevant agreement
between the Commonwealth and the State or Territory that makes the
instrument.
89. Once amended, the AEMA, with new subsection 44AI(4), will operate to
require the unanimous MCE agreement to any purported conferral of
functions or powers, or imposition of duties, on the AER under a local energy
instrument. The policy intention is to ensure that unanimous MCE agreement
is required to the conferral of functions or powers, or the imposition of duties,
on the AER under any instrument within the scope of the AEMA, whether
under primary legislation, or a local energy instrument.
90. Item 13 provides for the saving of any regulations made for the purposes of
subsection 44AI(4), before it was repealed and substituted by item 12.
Specifically, it provides that despite the repeal of subsection 44AI(4) by item
28
12 of this Schedule, regulations in force for the purposes of subsection
44AI(4) immediately before the commencement of item 13 continue in effect
on and after that commencement, and may be repealed, as if the repeal of
subsection 44AI(4) had not happened.
91. Item 4 of the commencement table in clause 2 of this Bill provides
specifically for the commencement of items 12 and 13.
Items 14-20 - Amendments to section 44AJ - How duty is imposed
92. Items 14, 16, and 18-20 make minor but relevant amendments to section
44AJ of the Competition and Consumer Act 2010 (Cth) to provide for the
purported conferral by a local energy instrument (in addition to a
State/Territory energy law) of a duty on the AER.
93. Item 15 makes a minor amendment to the note to subsection 44AJ(1) to
renumber it as 'Note 1', given the insertion of a second note by item 17.
94. Item 17 inserts 'Note 2' at the end of subsection 44AJ(1) which cross-refers to
the specific reading down provision in section 320 of the National Energy
Retail Law. The note clarifies that section 320 of the South Australian
Energy Retail Legislation, as it applies as a law of a State or Territory, deals
with the case where a duty purportedly imposed on a Commonwealth body
under that applied law cannot be imposed by the State or Territory or the
Commonwealth due to constitutional doctrines restricting such duties.
Items 21-22 - Minor amendments to section 44AK
95. Items 21 and 22 amend section 44AK so that it applies to the imposition of a
duty by a local energy instrument. The intention of the amendments is to
make it clear, for the purposes of sections 44AI and 44AJ, when a
State/Territory energy law or a local energy instrument imposes a duty on the
AER. That is, the law or instrument confers a function or power on the AER;
and the circumstances in which the function or power is conferred give rise to
an obligation on the AER to perform the function or to exercise the power.
Item 23 - Minor amendment to section 44AL (note)
96. Section 44AL of the Competition and Consumer Act 2010 (Cth) concerns the
powers of the AER. Item 23 makes a minor amendment to the note to section
44AL which is consequential to the amendment made to section 44AI by
items 11 and 12 of Schedule 2 of this Bill. The note will now clarify that
"State and Territory laws or instruments may also confer powers on the AER
in respect of its functions under those laws: see section 44AI."
Items 24-25 - Amendments to section 44ZZMA - How duty is imposed
97. Section 44ZZMA of the Competition and Consumer Act 2010 (Cth)
relevantly provides for how a duty is imposed on the ACT under a "State or
29
Territory access regime law", which is defined in section 44B to include a
"State/Territory energy law". Items 24 and 25 insert a new Note 2 to
subsection 44ZZMA(1) and makes a consequential change to the existing
note numbering.
98. The new Note 2 cross-refers to the specific reading down provision in s 320
of the National Energy Retail Law. The note clarifies that section 320 of the
South Australian Energy Retail Legislation, as it applies as a law of a State or
Territory, deals with the case where a duty purportedly imposed on a
Commonwealth body under that applied law cannot be imposed by the State
or Territory or the Commonwealth due to constitutional doctrines restricting
such duties.