Download explanatory memorandum - Federal Register of Legislation

EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 144
Subject - Australian Energy Market Regulations 2005
This explanatory statement relates to the Australian Energy Market Regulations
2005 (the Regulations) and is made for the purposes of the Legislative Instruments
Act 2003.
The Australian Energy Market Act 2004 (the Act) applies uniform energy laws as
law of the Commonwealth in the offshore adjacent areas to the States and
Territories, and makes provision for them to apply to other places, circumstances
and persons that are prescribed.
Subsection 14(1) of the Act provides that the Governor-General may make
regulations, not inconsistent with the Act, prescribing all matters that are required or
permitted by the Act to be prescribed or are necessary or convenient to be
prescribed for carrying out or giving effect to the Act. Subsection 14(2) of the Act
provides that regulations may be made providing for the interpretation of a uniform
energy law when applied as a law of the Commonwealth. Subsection 14(3) of the
Act provides that the regulations may modify or adapt any provision of the National
Electricity (Commonwealth) Law, the National Electricity (Commonwealth)
Regulations or the National Electricity (Commonwealth) Rules, or a uniform energy
law applied as a law of the Commonwealth, when those provisions apply as a law of
the Commonwealth.
Subparagraph 6(a)(ii) of the Act provides that the National Electricity Law set out in
the Schedule to the National Electricity (South Australia) Act 1996 of South
Australia, as in force from time to time, applies as a law of the Commonwealth in
any other places, to any circumstances, or to any persons, that are prescribed by the
regulations.
The purpose of the Regulations is to apply the National Electricity Law – as
amended by the National Electricity (South Australia) (New National Electricity
Law) Amendment Act 2005 of South Australia – to all access undertakings given to
the Australian Competition and Consumer Commission (ACCC) by constitutional
corporations (as defined) under section 44ZZA of the Trade Practices Act 1974, in
compliance with the requirements and terms of the National Electricity Code. These
undertakings set out the terms and conditions on which access to a particular service
is provided.
The Regulations will ensure that the provisions of the new National Electricity Law
will apply to access undertakings previously given under the National Electricity
Code. In particular, they would ensure that transitional provisions in the National
Electricity Law which provide that references in a document to the National
2
Electricity Code now mean the National Electricity Rules, will apply to the
undertakings.
Details of the Regulations are set out in the Attachment.
The Regulations commence on the day that Part 2 of the National Electricity (South
Australia) (New National Electricity Law) Amendment Act 2005 of South Australia
commences. This has not happened yet and is expected to be 1 July 2005.
The Regulations reflect reforms being made to enact a new National Electricity Law
(which is the Schedule to the National Electricity (South Australia) Act 1996 of
South Australia) and to convert the National Electricity Code into the National
Electricity Rules. Industry has been consulted extensively on these reforms. Given
this, no separate consultation on the Regulations was necessary.
3
ATTACHMENT
Details of the Australian Energy Market Regulations 2005
Regulation 1 – Name of Regulations
This regulation provides that the title of the Regulations is the Australian Energy
Market Regulations 2005.
Regulation 2 – Commencement
This regulation provides for the Regulations to commence on the day that Part 2 of
the National Electricity (South Australia) (New National Electricity Law)
Amendment Act 2005 of South Australia (the SA Amendment Act) commences.
This has not happened yet and is expected to be 1 July 2005.
Regulation 3 – Definitions
This regulation defines terms, used in the Regulations, that are not already defined
in the Australian Energy Market Act 2004 (the Act).
In particular, it is necessary to define the National Electricity Code, for which there
is no current definition in the Act. While the National Electricity Code will be
superceded by the National Electricity Rules, the undertakings referred to in the
Regulations were given in compliance with the terms of the National Electricity
Code. Section 8 of the Act refers to the Code. When this was drafted, it was
thought that the new rules would continue to be called the Code, but this will not be
the case.
Regulation 4 – Application and interpretation of the National Electricity Law
Subregulation 4(1) provides that, for the purposes of subparagraph 6(a)(ii) of the Act,
the following circumstances and persons are prescribed – access undertakings given
to the ACCC by constitutional corporations (as defined) under section 44ZZA of the
Trade Practices Act 1974, in compliance with the requirements and terms of the
National Electricity Code, and the continued operation of those undertakings.
Subregulation 4(2) provides that a ‘document’ in clauses 7, 8 and 9 of Schedule 3 to
the new National Electricity Law (as amended by the SA Amendment Act) is taken
to include an access undertaking referred to in subregulation 4(1). Subregulation 4(2)
is supported by either or both of subsections 14(2) and (3) of the Act, depending on
whether this provision is merely seen as confirming the position that would
otherwise exist, or modifying the National Electricity (Commonwealth) Law.
4
The note to regulation 4 explains the purpose of the Regulations. Under the National
Electricity Code, network service providers were obliged to give an undertaking to
the ACCC to provide access to services in accordance with the Code and any
applicable regulatory instruments, as in force from time to time. Transitional
provisions in the new National Electricity Law (as amended by the SA Amendment
Act) provide, in summary, that:
•
every reference in a document to the National Electricity Code is deemed to be
a reference to the National Electricity Rules (Schedule 3, clause 7);
•
every reference in a document to a provision of the National Electricity Code is
deemed to be a reference to the corresponding provision of the National
Electricity Rules (clause 8); and
•
every reference in a document to a ‘Code participant’ is deemed to be a
reference to a ‘Registered participant’ (clause 9).
These transitional provisions, applied as State and Territory law, and as
Commonwealth law in the offshore adjacent area, would generally be effective to
keep in force existing access undertakings, given that the undertakings refer to the
Code and applicable regulatory instrument as in force from time to time. As such,
the provisions would have the effect of deeming references to the National
Electricity Code in the undertakings to be references to the National Electricity
Rules. However, to remove any doubt on that question, the Regulations will apply
the new National Electricity Law (including the transitional provisions) as a law of
the Commonwealth to those access undertakings.