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Electricity Industry Amendment
(Premium Solar Feed-in Tariff)
Bill 2009
Introduction Print
EXPLANATORY MEMORANDUM
General
The Bill aims to facilitate and regulate the payment of a premium feed-in
tariff to Victorian residential electricity customers with grid-connected,
small-scale solar photovoltaic systems. The Bill aims to assist Victorian
households in making a personal contribution to tackling climate change.
The key objectives of the Bill are to reduce cost barriers to Victorian
households installing small-scale solar photovoltaic systems; encourage the
continued uptake of solar photovoltaic as part of a greenhouse gas abatement
strategy for Victoria; and provide a modernised regulatory approach under
which a premium feed-in tariff is credited to qualifying customers. The Bill
also aims to ensure certainty for owners of grid-connected residential solar
photovoltaic systems with respect to their right to receive a premium feed-in
tariff credit; certainty for electricity retailers and distributors with respect to
their obligation to credit the premium feed-in tariff to qualifying customers
and certainty for other potentially affected stakeholders. The Bill will amend
the Electricity Industry Act 2000 and the National Electricity (Victoria)
Act 2005 to provide for the establishment of the scheme.
Clause Notes
Clause 1 sets out the main purpose of the Bill.
Clause 2 provides for the commencement of the Act on a day or days to
be proclaimed. If a provision of the Act does not commence
operation before 1 July 2011, it commences operation on that
day.
Clause 3 states that the Principal Act referenced throughout the Bill is the
Electricity Industry Act 2000.
561286 1 BILL LA INTRODUCTION 11/3/2009
Clause 4 amends section 40F(1) of the Principal Act to insert new
definitions, and amend and repeal existing definitions. The new
definitions being inserted by clause 4 include the following--
qualifying customer means a person who purchases electricity
from a relevant licensee or a small retail licensee, who generates
electricity at their principal place of residence by means of a
qualifying solar energy generating facility and has been
exempted under the Principal Act to hold a licence in respect of
the generation, supply or sale of that electricity;
qualifying solar energy generating facility means a photovoltaic
generating facility which is connected to a distribution system
and has an installed or name-plate capacity of not more that
3·2 kilowatts;
qualifying solar energy generation electricity means electricity
that a qualifying customer generates and does not use;
scheme start day means the day on which section 5 of the
Electricity Industry Amendment (Premium Solar Feed-in
Tariff) Act 2009 comes into operation;
small retail licensee means a person that holds a licence to sell
electricity and sells electricity to 5000 or less customers.
Clause 5 inserts new sections 40FA to 40FJ into the Principal Act.
· New section 40FA defines the term premium solar
feed-in tariff, terms and conditions. The solar feed-in
credit is to be an amount not less than $0.60 per
kilowatt-hour. The terms and conditions include billing
arrangements and excess credit accumulated during the
premium solar feed-in tariff period.
· New section 40FB defines the term general renewable
energy feed-in terms and conditions.
· New section 40FC defines the premium solar feed-in
tariff period.
· New section 40FD provides that the purchase of
qualifying solar generation electricity does not require
payment of money by a relevant licensee or small retail
licensee to the qualifying customer instead of the
premium solar feed-in credit.
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· New section 40FE empowers the Minister to declare a
day to be the declared scheme capacity day for the
purpose of declaring when the scheme capacity of
100 megawatts has been reached.
· New section 40FF requires that in addition to the
conditions to which a relevant licensee is subject, there
exists a condition to publish premium solar feed-in tariff
terms and conditions. The section requires a relevant
licensee to give a copy of the published terms and
conditions to the Minister within 7 days after their
publication.
· New section 40FG enables small retail licensees to offer
to purchase solar energy at the premium solar feed-in
tariff terms and conditions. This section requires the
small retail licensee to publish a notice of its intention
to do so in the Government Gazette. The section also
enables a small retail licensee to publish, in the
Government Gazette, notice of its decision to stop
purchasing qualifying solar energy generation electricity
from a qualifying customer. The effect of the
publishing of this notice is that on or after publication,
the small retail licensee is not required to offer to
purchase solar energy according to the published
premium solar feed-in terms and conditions.
· New section 40FH provides that an electricity
distribution company with a licence that requires it to
enter into an agreement with retailers for the distribution
and supply of electricity enabling retailers to sell
electricity to their customers (a use of system
agreement), includes a deemed condition that requires
the distribution company to credit the relevant licensee
or small retail licensee the relevant amount for
qualifying solar energy generation conveyed along a
distribution system operated by that company.
· New section 40FI provides that the giving of a credit
under a solar feed-in credit obligation must be taken
to be a relevant pass through event for the purposes of
the 2006-2010 distribution pricing determination.
The section also defines the term solar feed-in credit
obligation.
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· New section 40FJ imposes a statutory condition on
distribution companies that are licensees to, within one
month after every anniversary date of the scheme start
day, give a report to the Minister that specifies--
· the number of qualifying solar energy generating
facilities connected to a distribution system
operated by that licensee on the anniversary date
of the scheme start day that has just passed; and
· the aggregate installed or name-plate generating
capacity of qualifying solar energy generating
facilities connected to a distribution system
operated by that licensee on the anniversary date
of the scheme start day that has just passed.
Clause 6 substitutes a new section 40G of the Principal Act. Section 40G
is an existing section of the Principal Act. The new substituted
section will provide that the conditions to which a licence to sell
electricity held by a relevant licensee is subject, include a
condition requiring the licensee to publish general renewable
energy feed-in terms and conditions. The substitution mirrors the
existing section of the Principal Act except in so far as it requires
the condition to apply to the publishing of general renewable
energy feed-in terms and conditions, as opposed to publishing an
offer comprising the prices, terms and conditions on which the
licensee will purchase from a relevant generator.
Clause 7 makes a number of amendments to section 40H of the Principal
Act. The clause substitutes section 40H(1) of the Principal Act,
with the effect that general renewable energy feed-in terms and
conditions and premium solar feed-in terms and conditions, take
effect 2 months after they are published under sections 40FF,
40FG and 40G. The clause also makes a distinction between
declared general feed-in terms and conditions and declared
premium solar feed-in terms and conditions.
Clause 8 makes a number of amendments to section 40I(1) of the Principal
Act. New section 40I(1) enables the Minister, by written notice,
to refer general renewable energy feed-in terms and conditions or
premium solar feed-in terms and conditions to the Essential
Services Commission (the Commission) for an assessment as to
whether they are fair and reasonable. The Minister may also
require the Commission to determine what is fair and reasonable
for general renewable energy feed-in terms and conditions to
apply to small renewable energy generation, where a relevant
licensee has not complied with substituted section 40G(1).
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Also under the amendments to section 40I, where a relevant
licensee has not complied with section 40FF(1) or a small retail
licensee has not complied with substituted section 40FG(3), the
Minister may request the Commission to determine premium
solar feed-in tariff terms and conditions to apply to qualifying
solar energy generation electricity purchased by that relevant
licensee or small retail licensee. The clause also makes a number
of other minor consequential amendments to the heading to
section 40I and section 40I(2).
Clause 9 makes a number of amendments to section 40J of the Principal
Act which deals with the assessment of referred terms and
conditions by the Commission. In particular, the clause as
amended will enable the Commission to assess and make
recommended premium solar feed-in terms and conditions and
general feed-in terms and conditions.
Clause 10 makes a minor consequential amendment to section 40K of the
Principal Act.
Clause 11 provides for substitutes section 40L(1) and (2) of and, inserts new
sections 40L(2A) and (2B) into, the Principal Act, requiring the
Commission to determine prices, terms and conditions on the
Minister's request under substituted new sections 40I(1)(b)(i) and
40I(1)(b)(ii). This clause also requires the terms and conditions
determined under section 40L to be fair and reasonable.
Clause 12 substitutes section 40M of the Principal Act and inserts new
sections 40MA to 40ME, into the Principal Act.
· New section 40M provides that where the Minister
receives a report containing Commission recommended
or determined general feed-in terms and conditions, the
Minister may declare that the recommended or
determined terms and conditions apply to the purchase
of small renewable energy generation electricity by the
relevant licensee or non-complying licensee (as the case
requires).
· New sections 40MA provides that the Minister may
declare that where the Minister receives a report from
the Commission containing recommended or
determined premium solar feed-in tariff terms and
conditions, that the Minister may declare that the
recommended or determined terms and conditions apply
to the purchase of qualifying solar energy generation
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electricity by a relevant licensee or small retail licensee
or non-complying licensee (as the case requires).
· New section 40MB provides that declared ESC
recommended feed-in terms or conditions supersede the
relevant referred terms and conditions, which the
Commission has assessed as not being fair and
reasonable. The section provides that the declare ESC
recommended feed-in terms and conditions take effect
on the day notice is published in the Government
Gazette or another date as specified in the published
notice. The clause also sets out the meaning of declared
ESC recommended feed-in terms and conditions.
· New section 40MC provides that declared ESC
determined feed-in terms and conditions take effect on
the day notice is published in the Government Gazette
or on another day as specified in the published notice.
The clause also sets out the meaning of declared ESC
determined feed-in terms and conditions.
· New section 40MD provides that a license to sell
electricity held by a relevant licensee named in a
declaration under new section 40M(2) or 40MA(2) is
deemed to include a condition requiring that licensee to
offer to purchase small renewable energy generation
electricity or qualifying solar energy generation
electricity from a qualifying customer, on the terms and
conditions declared to apply to those purchases.
· New section 40ME provides that a small retail licensee
named in a declaration under new section 40MA(2) is
deemed to involve a condition requiring that licensee to
offer to purchase qualifying solar energy generation
electricity from a qualifying customer on the terms and
conditions declared to apply to those purchases.
Clause 13 makes a number of amendments to section 40N of the Principal
Act that are consequential to the insertion of the following new
definitions into section 40F(1) by clause 4: ESC determined
general feed-in terms and conditions, ESC recommended
general feed-in terms and conditions, general renewable energy
feed-in terms and conditions, referred terms and conditions.
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Clause 14 inserts new sections 40NA and 40NB into the Principal Act.
· New section 40NA requires a relevant licensee and a
small retail licensee to publish a notice on their Internet
sites if their premium solar feed-in tariff terms and
conditions are referred to the Commission for
assessment or are superseded by terms and conditions
declared under section 40MA. The section also requires
that a non-complying licensee must publish on its
Internet site, the terms and conditions that have been
declared under section 40MA(2)(b) as applying to
purchases of qualifying solar energy generation
electricity, as well as publishing the day on which such
terms and conditions take effect.
· New section 40NB requires the Minister to cause an
independent review, to be undertaken by 30 June 2012,
into the operation of the amendments made to the
Principal Act by this Bill. The section requires that the
persons undertaking the review must provide a report to
the Minister and that the Minister must lay that report
before each House of Parliament. The section provides
the dates by which information that a licensee is
required to give the person undertaking the review--this
being 1 July 2010 and 1 July 2011 if requested to do so
by the Minister. The information includes the amount
of qualifying solar energy generation electricity
conveyed along distribution systems operated by
distribution companies in the years 2009 and 2010
respectively.
Clause 15 amends the National Electricity (Victoria) Act 2005 to insert a
new section 16A into that Act. The new section will provide for
the application of Division 5A of Part 2 of the Principal Act to be
deemed to be an Act of this jurisdiction that relates to the
protection of the environment referred to in section 2D(1)(b)(iv)
of the National Electricity (Victoria) Law. The amendment will
also deem the solar feed-in credit obligation, as defined in the
section, to be deemed to be an obligation under the Electricity
Industry Act 2000. The section also sets out the meaning of
distribution company, distribution obligation period, relevant
solar feed-in tariff period and solar feed-in credit obligation.
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Clause 16 provides for the Bill to be repealed on 1 July 2012. The repeal of
this Act does not affect in any way the operation of the
amendments made by this Act (see section 15(1) of the
Interpretation of Legislation Act 1984).
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