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ELECTRICITY LEGISLATION AMENDMENT BILL (Serial 169) Bill presented and read a first time. Mr TOLLNER (Treasurer): Madam Speaker, I move that the bill be now read a second time. The purpose of this bill is to ensure the operations of the national electricity laws, rules and regulations in the Territory are consistent with other jurisdictions, while providing for the Territory’s unique circumstances. On 1 July 2015 the National Electricity (Northern Territory) (National Uniform Legislation) Act also known as implementing legislation came in force in the Territory. The purpose of the implementing legislation is to facilitate the transfer of economic regulation of the Territory’s prescribed electricity networks to the Australian Energy Regulator, referred to as the AER, through a three-phase approach, transitioning to a greater alignment of the Territory’s regulatory arrangements with the national framework. Since the commencement of the implementing legislation and through the development of modifications to the National Electricity Rules, a number of issues have been identified that require amendment to ensure the national electricity framework meets the Territory’s requirement. The draft bill amends the implementing legislation and the Electricity Networks (Third Party Access) Act to ensure the national electricity legislative framework has ambulatory function, meaning when the national electricity law, rules or regulations are updated nationally the updates versions will automatically apply in the Territory. This approach is consistent with other jurisdictions that are subject to the national cooperative scheme. It will allow the Territory to enjoy the benefits arising from updates to the national electricity legislation without incurring the administrative costs associated with preparing regular legislative amendments. The Territory will still retain its ability to make modifications to the national instruments to suit circumstances unique to the Northern Territory. To ensure the Australian Energy Market Commission’s rulemaking powers are relevant to the Territory, the Australian Energy Market Commission, known as the AEMC, is responsible for developing and maintaining a uniform set of National Electricity Rules in accordance with the requirements set out in the national electricity law. One such requirement is that the AEMC may only make a rule if it is satisfied that the rule complies with its rulemaking criteria. However, as the national electricity law was established in the context of operating and maintaining the reliability, safety and security of the national electricity system in the eastern and southern states, the AEMC’s capacity to have regard to the Territory’s local electricity systems is restricted. It is unlikely that the Territory will ever be physically connected to the national electricity system. As such, the draft bill allows the AEMC to make differential rules if it considers that such a rule will better contribute to the achievement of its rulemaking criteria in respect of the Territory’s electricity systems. This approach will enable the AEMC to maintain a uniform set of national rules to the greatest extent possible, whilst also recognising the Territory’s differences to modify definitions to ensure appropriate Territory application. Modified definitions will ensure that references to the national electricity law, the National Electricity Rules and the national electricity regulations are to either the Northern Territory’s modified instruments or the national instruments depending on the context. Amendments to these definitions create an additional effect of requiring that the AEMC maintains on its website an up to date consolidated version of the National Electricity Rules as in force in the Territory, which is expected to be well received by all Territory electricity entities, including potential entrants to the Territory’s electricity market. To ensure consultation undertaken by the AER prior to 1 July this year satisfies consultation requirements under the National Electricity Rules, from time to time the AER will make, amend or replace scheme and guidelines and will be required to follow consultation procedures as specified in the National Electricity Rules. Given some schemes or guidelines may be replaced or made prior to the commencement of the National Electricity Rules in the Territory on 1 July this year, it is necessary to ensure that consultation undertaken by the AER with the Power and Water Corporation satisfies consultation requirements under the National Electricity Rules. In relation to cost pass-through decisions, the draft bill amends the implementing legislation and the Electricity Networks (Third-Party Access) Act to put in place transitional cost pass-through arrangements. Certain events may trigger a cost pass-through where the AER may decide that PWC should be allowed to recover or reduce efficient costs associated with an event outside of its reasonable control, such as where a cyclone destroys electricity infrastructure. Amendments will ensure that costs associated with cost pass-through events that occur during the current 2014 to 2019 regulatory period can be recovered or reduced in the next regulatory period. Amendments will also ensure that cost pass-through decisions made under the Territory’s regulatory framework will remain subject to judicial review. To recognise that Western Australia is expected to soon become a non-connected participating jurisdiction – given that Western Australia is seeking to apply the National Electricity Rules from as early as the end of 2016, minor amendments are required to certain provisions in the implementing legislation to recognise that Western Australia will be a participating jurisdiction but, like the Territory, does not have interconnected electricity systems. The bill will ensure that the National Electricity Framework, which represents the best electricity practice in Australia, is applied in the Territory in a manner than aligns with regulatory arrangements in other jurisdictions to the greatest extent possible while also being fit for purpose for the Northern Territory I commend the bill to honourable members and tabled the explanatory statement to accompany the bill. |