Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Australian Energy Market Amendment (National Energy Retail Law) Bill 2011

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

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)

 



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 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).

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.

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.



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.

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 th e Judiciary Act 1903 .

FINANCIAL IMPACT STATEMENT

24.               The Bill will have no financial impact.

 



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.

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 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.

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 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.

 

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.

 

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 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 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 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 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 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 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 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 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 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.

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).

 

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.

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 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 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.