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(Transmission Operator's Levy) Bill
1998
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
This Bill is cognate with the Appropriation Bill 1998.
Clause 2 provides for the commencement of the proposed Act on 28 June
1998.
Clause 3 is a formal provision giving effect to the amendments to the
Electricity Supply Act I995 set out in Schedule l .
Schedule 1 [5] inserts proposed Part 4A (Electricity supply by transmission
operators to direct customers) into the Electricity Supply Act 1995.
Division 1 of the proposed Part relates to the imposition of the transmission
operator's levy. It mirrors the provisions contained in Division 5 of Part 3
that deal with the imposition of the electricity distributor's levy. It contains
the following provisions:
Proposed section 43F contains definitions for the purposes of the new
Division.
Proposed section 43G imposes a levy on a transmission operator in each
financial year, based on profit from "network income". That income is
derived by the transmission operator from the use of the electricity network
in the provision of electricity network services to direct customers. The actual
amount of the levy is as determined by the Governor on the recommendation
of the Treasurer in accordance with the principles set out in the proposed
section.
Proposed section 43H permits the amount of the levy to be varied in respect
of the financial year to which it relates.
Proposed sections 43I and 43J make provision for the levy in the case of
persons who become transmission operators during a financial year or cease
to be transmission operators during a financial year.
Proposed section 43K makes provision for the payment and recovery of the
levy.
Proposed section 43L makes it clear that the new Division does not affect
the provisions of the Public Finance and Audit Act 1983 relating to the
payment of dividends.
Division 2 of the proposed Part relates to the pricing of electricity. It mirrors
the provisions contained in Division 4 of Part 4 that deal with the pricing of
electricity supplied by electricity distributors. It contains the foIlowing
provisions:
Proposed section 43M contains definitions for the purposes of the new
Division.
Explanatory note page 2
Proposed section 43N increases the price of electricity supplied to direct
customers by transmission operators. The maximum increase is 0.550 cents
per kilowatt hour. A lower price may be set by the Governor, by order made
on the recommendation of the Treasurer. The increase is factored into the
determination made by the Independent Pricing and Regulatory Tribunal, and
accordingly the increase has to be passed on to direct customers by
transmission operators unless the Treasurer otherwise approves under the
Independent Pricing and Regulatory Tribunal Act 1992. Provision is made to
prevent the supply component of the price of electricity being reduced to
offset the increase in the network component.
Proposed section 43O requires transmission operators to furnish returns to
the Treasurer.
Proposed section 43P, in subsection (l), enables regulations of a transitional
nature to be made if it is not practicable to ascertain the amount of electricity
used in the first period after the commencement of the proposed section.
Subsections (2)(4) enable exemptions from the new Division to be made
where appropriate. Subsection (5) states that the new Division does not
provide grounds for customers to challenge electricity accounts.
Schedule 1 [6] makes a consequential amendment.
Schedule 1 [2] enables the Governor, by order made on the recommendation
of the Treasurer, to determine a price increase that is less than the maximum
price increase specified in the Electricity Supply Act 1995 for the provision of
electricity network services for non-franchise customers of electricity
distributors.
Schedule 1 [1], [3], [4] and [7] remove references to "eligible customers"
from the Electricity Supply Act 1995 as this classification of customers is no
longer necessary for the purposes of that Act. The classification is no longer
necessary because, from 199899,the network price increase is to be
deferred until a customer chooses its electricity retail supplier or is declared
to be a non-franchise customer under the timing arrangements specified in
the non-franchise customer declaration under section 92 of the Electricity
Supply Act 1995, whichever first occurs.
Explanatory note page 3