South Australian Current Acts South Australian Current Acts17—Terms of leases and related instruments
(1) The Minister is to
endeavour to ensure that a prescribed long term lease in respect of
prescribed electricity assets or a related instrument contains terms under
which—
(a) the
lessee's right or option to renew or extend the lease must be exercised not
less than five years before the commencement of the term of that renewal or
extension; and
(b) the
risk of non-payment of rent (including amounts to be paid on the exercise of a
right or option to renew or extend the lease) is addressed at the commencement
of the lease by the provision of adequate security or other means; and
(c) the
lessee must provide adequate security in respect of compliance with
requirements as to the condition of the leased assets at the expiration or
earlier termination of the lease; and
(d) the
lessor accepts no liability for, and provides no warranty or indemnity as to,
a consequence arising from—
(i)
the lessee's use of the leased assets in trade or
business; or
(ii)
pool prices in the National Electricity Market or a
similar or derivative market relating to the supply of electricity; or
(iii)
competition between participants in the
National Electricity Market or a similar or derivative market relating to the
supply of electricity; or
(iv)
regulatory change in the electricity supply industry; and
(e) the
lessee must indemnify the lessor for any liability of the lessor to a third
party arising from the lessee's use or possession of the leased assets; and
(f) the
lessee must have adequate insurance against risks arising from the use or
possession of the leased assets; and
(g) the
lessee must ensure compliance with all regulatory requirements applicable to
the use or possession of the leased assets; and
(h) the
lessor is entitled to terminate the lease if a breach of the lessee's
obligations of any of the following kinds, or any other serious breach,
remains unremedied after reasonable notice:
(i)
failure to obtain or retain—
(A) a licence or registration required for
the use of the leased assets for their intended purpose in the
electricity supply industry under the Electricity Act 1996 or the
National Electricity (South Australia) Law ; or
(B) a similar licence, registration or
other authority required under subsequent legislation;
(ii)
non-payment of rent;
(iii)
substantial cessation of use of the leased assets for
their intended purpose in the electricity supply industry; and
(i)
the lessor has a right or option, at the expiration or
earlier termination of the lease, to acquire assets that form part of the
business involved in the use of the leased assets for their intended purpose
in the electricity supply industry.
(2) If a
prescribed long term lease is granted in respect of prescribed
electricity assets and the lease and prescribed report relating to the lease
are laid before a House of Parliament in accordance with section 13, a
report stating the extent to which the lease complies with the requirements
set out in subsection (1) and giving reasons for any non-compliance must
be laid before that House of Parliament at the same time.
(3) Non-compliance
with this section does not affect the validity of a
prescribed long term lease.
(4) A provision
included in a prescribed lease or related instrument that deals with—
(a) the
circumstances or conditions under which the lease may be terminated by the
lessor or lessee; or
(b) the
application of a security provided in relation to the lease; or
(c) the
pre-payment of amounts payable by way of rent under the lease and the
retention of such amounts by the lessor; or
(d) the
continuance of the lease despite the occurrence of unintended or unforeseen
circumstances; or
(e) the
continuance of the obligation to pay rent despite the occurrence of unintended
or unforeseen circumstances; or
(f) the
amount payable in consequence of a breach of the lease; or
(g) the
liability of the lessor in relation to the leased assets,
will have effect according to its terms and despite any law or rule to the
contrary.
(5) In this
section—
"electricity supply industry" means the industry involved in the generation,
transmission, distribution, supply or sale of electricity;
"National Electricity Market" means the market regulated by the National
Electricity Law ;
"prescribed company" has the same meaning as in section 13;
"prescribed electricity assets" has the same meaning as in section 13;
"prescribed lease" means—
(a) a
lease granted by a sale/lease agreement; or
(b) a
lease granted by a transfer order the lessee under which is, or was when the
lease was granted, a prescribed company or subsidiary of a prescribed company
or any instrumentality of the Crown or a statutory corporation;
"prescribed long term lease" means a prescribed lease that confers a right to
the use or possession of the assets for a term extending to a time, or
commencing, more than 25 years after the making of the lease;
"right" has the same meaning as in section 13.