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Tuesday, 28 November 2000
Page: 20040


Senator Brown asked the Minister for Industry, Science and Resources, upon notice, on 31 August 2000:

(1) Is the use of a Net System Load Profile (NSLP) to deem electricity consumption regulated or covered in any way by the National Measurement Act 1960 (the Act); if so, how and with what implications for the use of NSLP.

(2) Has the Minister's office been approached by the Victorian Government or any of its agencies in its role as jurisdictional panel member of the National Electricity Market, or otherwise, in relation to the use of net system load profiling for deeming electricity consumption; if so, when and for what purpose.

(3) Has the Minister, or the department, had any contacts with the Victorian Government or any of its agencies about the Act in relation to full retail contestability in the gas or electricity markets; if so: (a) when were these contacts; (b) in what form were they; (c) who was involved; and (d) what issues were canvassed.

(4) Has the Minister been approached by the National Electricity Market Management Company or the National Electricity Code Administrator about the use of NSLP for full retail contestability for electricity; if so, what issues were raised.

(5) (a) What are the alternatives to NSLP for measuring electricity consumption so that full retail contestability can be introduced; (b) do they conform to the Act; and (c) what other advantages and disadvantages do they have.

(6) Has anyone sought amendments to the Act in relation to the delivery of electricity or gas: if so, (a) who; (b) when; and (c) what changes did they seek.

(7) Has the Minister's office or the Commonwealth Government given any undertakings to any other party about the administration of the Act in relation to the introduction of full retail contestability for electricity and/or gas; if so: (a) what were these undertakings; and (b) to whom and when were they given.

(8) (a) How are consumer interests represented in decision-making processes for the national electricity market; (b) what information is available to the consumer; and (c) what resources are provided to enable consumer participation.

(9) How is the Act monitored and enforced in the electricity and gas industries.


Senator Minchin (Minister for Industry, Science and Resources) —The answer to the honourable senator's question is as follows:

(1) Application of the National Measurement Act 1960 to net system load profiling is unclear. My Department is currently in the process of establishing whether load profiling is consistent with the National Measurement Act 1960.

(2) The Minister's Office has not been approached by the Victorian Government, or any of its agencies, in relation to the use of net system load profiling for deeming electricity consumption. The Commonwealth is not a member of the National Electricity Market Jurisdictional Panel and does not have any legislative powers with respect to retailing electricity.

(3) The Department has held informal discussions with the Victorian Government about introduction of full retail contestability in the Victorian electricity market.

(a) Informal discussions were held in July and August 2000.

(b) The discussions took the form of telephone conversations and an informal meeting.

(c) Discussions included representatives of the New South Wales and Victorian Governments, and officials from the Department of Industry Science and Resources.

(d) Issues canvassed included the need to establish certainty in the application of the National Measurement Act 1960 as well as a discussion of the relative merits of NSLP versus interval metering.

(4) The Minister has not been approached by the National Electricity Market Management Company or the National Electricity Code Administrator concerning net system load profiling.

(5) There are two metrology procedures that would facilitate introduction of full retail contestability into the National Electricity Market: interval metering and profiling.

Interval metering provides accurate and transparent information necessary to support efficient new entry to the National Electricity Market, and the development of innovative and vigorous retail competition. However, cost-effective interval metering solutions are not yet available and may take some time to develop. Although concerns about cost and cost recovery may be addressed quickly, interval metering development and rollout has the capacity to significantly delay the implementation of full retail contestability.

The alternative approach of profiling involves developing sophisticated algorithms to estimate consumption. Profiling solutions can range in complexity from net system profiles through to more complex customer class profiles. Profiles can be developed on the basis of consumption/ load or cost. Profiling could be implemented quickly and may be a relatively cheap alternative to interval metering. However, profiling by its nature is less accurate than interval metering and may involve allocative cross-subsidies between users.

Interval metering is consistent with the requirements of the National Measurement Act 1960. Cost profiling is also likely to be consistent with the requirements of the National Measurement Act 1960. My Department is currently in the process of establishing whether load profiling is consistent with the Act.

(6) The Victorian and New South Wales Governments have sought clarification regarding the operation of the National Measurement Act 1960. They informally raised the possibility of amending the Act or developing regulations to clarify the legality of using profiling under the National Measurement Act 1960. At this stage no formal request has been received.

(7) No undertakings, beyond a willingness to consider the issue, have been provided by the Commonwealth concerning the interrelationship between the National Measurement Act 1960 and the introduction of full retail competition in the electricity sector.

(8) The Energy Action Group has represented consumer interests in relation to implementing full retail contestability through its membership on the National Electricity Market Settlements and Transfer Committee (NEMSAT). NEMSAT is advising the NSW and Victorian governments on the implementation of full retail contestability, particularly as it relates to the development of systems and processes to facilitate customer choice. The Australian Competition and Consumer Commission is also an observer on this Committee.

Consumer interests are protected in the National Electricity Market by provisions included in the National Electricity Code (Code) as well as licensing requirements in each jurisdiction. The Code defines the rights and obligations of participants within the National Electricity Market. All proposed changes to the Code must follow a well-defined Code change process that requires public notification of all proposals, as well as a public consultation process. Any interested party may submit a proposal for a Code change as well as a submission on any proposed Code change. Proposals for Code changes are considered by the National Electricity Code Administrator in the first instance and then may be referred to the ACCC for a final determination. All submissions received through the public consultation process, as well as the final recommendations to the ACCC, are publicly available. The ACCC considers the recommendations having regard to its previous determinations, the likely competition effects with regard to the Trade Practices Act 1974 and the net public benefits of the proposal.

The National Electricity Code Administrator launched a review of end-user advocacy in March 2000. Implementation of the recommendations from the review of end-user advocacy are expected in early 2001. Issues to be covered by the review include:

- Potential amendments to the Code to ensure effective opportunity for end-user involvement

- Appropriate provision of information and the practices and procedures of NECA and NEMMCO to facilitate end-user advocacy.

- Scope for improved organisational and representational arrangements on behalf of end users

(9) As for all industries, the electricity industry interacts with the National Measurement Act 1960 through the validation and certification of meters used in the industry. The National Standards Commission has identified the monitoring of meters in the electricity industry as a priority project in its current work program.