ELECTRICITY NETWORKS (THIRD PARTY ACCESS) AMENDMENT BILL 2001 Second Reading Speech

Northern Territory Second Reading Speeches

ELECTRICITY NETWORKS (THIRD PARTY ACCESS) AMENDMENT BILL 2001

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Over the past two years, the government has undertaken significant reform of the regulatory arrangements that apply to electricity, water supply and sewerage services in the Territory. Following passage of the

and related legislation, the Territory’s electricity market was opened to competition on 1 April 2000. Choice of supplier is being progressively extended to smaller customers over time. In addition, changes to the legislative arrangements applying to water supply and sewerage services were passed in November 2000, and took effect in January this year.

Through these reforms, the government has sought to provide a long-term industry and regulatory framework for the efficient provision of utility services to Territorians. In particular, over time, the new arrangements should encourage significantly improved performance by PAWA.

The early signs are encouraging: in mid-April 2000, a private sector supplier entered the market in competition with PAWA; contestable customers are benefiting from significant reductions in electricity prices; and in relation to the Territory’s electricity network access code, the National Competition Council recently stated its preliminary view that amendments proposed by the government would meet the requirements for certification of the code as an effective regime under the

. Certification will establish the network access code as the sole legal regime for access to electricity networks in the Territory.

The primary purpose of the bills I am introducing today is to amend the provisions for extending coverage of the Territory’s electricity network access code. In addition, the bills include a number of other minor amendments.

Coverage of the network access code: on 28 November 2000, in a ministerial statement to the Assembly on PAWA’s acquisition of the Darwin to Katherine transmission line, I indicated that the line would be formally brought under the network access code. This was to ensure the line would be regulated by the Utilities Commission under the same framework that applies to other monopoly electricity networks. Currently, under section 5 of the

, the code applies only to electricity networks operated by PAWA and which have been prescribed by the minister by notice in the

. At this stage, PAWA’s networks in Darwin, Katherine, Alice Springs and Tennant Creek have been prescribed, but not the Darwin–Katherine transmission line.

Extension of the code currently requires: the minister to review the code to take into account the different characteristics of privately owned networks from those that are government owned; and the Commonwealth minister to have decided under part IIIA of the

that the code is an effective regime for the relevant network. These requirements were put in place to provide some assurance that the then privately-owned transmission line would not be brought under the code without due process.

In relation to the first of these requirements, as the Darwin–Katherine transmission line is now owned by PAWA, the ministerial review is redundant. In relation to the second requirement, as part of the certification process, the National Competition Council has advised that it considers the provision to be unworkable. The act currently requires the relevant Commonwealth minister’s prior decision that the code is ‘effective’ for extending to another network before that network can be covered by the code. However, the NCC considers that, under the

, the Commonwealth minister can only certify an established code which already covers defined infrastructure. The NCC has indicated that this circularity needs to be removed before the code can be certified. To remove any doubt that coverage of the network access code can be extended to include the transmission line, an amendment is proposed to the

Specifically, the

amends section 5 of the act to state simply that the access code applies to the electricity networks prescribed by the minister by notice in the

. Following this amendment, the transmission line will be prescribed by notice in the

as a network covered by the code.

A number of additional minor technical amendments are proposed. These arise as a result of experience with the operation of the various acts that establish the Territory’s regulatory arrangements for utility services.

: The network access amendment bill includes two other minor amendments. To ensure the Utilities Commission has the legal basis to advise the minister on the operation of the act, the amendment bill adds this function explicitly to the existing list of powers and functions of the regulator in section 10. Under subsection 14(1) of the

, a determination or approval of the regulator under part 3 (access pricing) of the access code is final. As all determinations under part 3 are in the nature of pricing arbitrations, it was considered inappropriate for these to be subject to review. However, subsection 14(5) inadvertently prevents the review and appeal processes set out in part 6 of the

from applying in respect of any determination or approval of the regulator under the access code, not just those under part 3.

The amendment bill will enable determinations or approvals of the regulator under other parts of the code to be reviewed — such as the approval of technical codes under part 2 of the code.

: There are two minor amendments to the

. Section 19 of the act permits electricity suppliers to pay their annual licence fees in ‘equal’ instalments. The amendment bill deletes the term ‘equal’, to provide greater flexibility for the payment of licence fees. This flexibility already applies to licensees under the

. In addition, there is currently an inconsistency in the ‘immunity from liability’ provisions between the

(section 108) and the

(section 115), on the one hand, and the

(section 41), on the other. These provisions are intended to protect officers engaged in the administration or enforcement of the legislation — such as the Utilities Commissioner and the safety regulator — from personal liability other than for acts done in bad faith.

The amendment bills will align the provisions in the two industry acts with those in the

. The amendments to the three acts also clarify that this personal protection for officers does not affect any liability that would otherwise apply to the Territory.

The final amendments are to the

. The amendment bill will enable the minister to confer on the Utilities Commission the power to undertake other relevant functions, aside from those specifically assigned by its own legislation or another act. Without such a provision, the commission strictly has no legal basis to undertake other relevant activities, such as assisting other regulators in areas where the Territory has a particular interest. For example, there are opportunities for officers of the commission to assist the South Australian independent industry regulator in its role as regulator of third party access for the Tarcoola to Darwin railway.

These bills provide for some minor, but necessary, amendments to the legislation governing the Territory’ s electricity, water supply and sewerage services industries. In particular, the amendment to the coverage provisions of the Electricity

will ensure the Darwin–Katherine transmission line can be regulated by the Utilities Commission under the same framework that applies to other monopoly electricity networks. The amendment is also necessary to achieve certification of the network access code including the Darwin-Katherine transmission line. Given the necessity for this legislative amendment, it is also timely to make the other minor technical amendments. These will improve the operation of the various acts that regulate the Territory’s utility industries.

Mr Deputy Speaker, I commend the bills to the Assembly.

Debate adjourned.

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