Queensland Bills Explanatory Notes Queensland Bills Explanatory Notes[Index] [Search] [Download] [Bill] [Help]
1
Gas Amendment Bill 2001
GAS AMENDMENT BILL 2001
EXPLANATORY NOTES
GENERAL OUTLINE
Objectives of the legislation
The objective of this legislation is to amend the Gas Act 1965, so that the
commencement of tranche 2 competition in the Queensland natural gas
retail market is deferred from 1 September 2001 (the date currently
legislated) to 1 January 2003.
Reasons for the Bill
As part of the national process of natural gas reform, Queensland has
provided for the staggered introduction of retail gas competition based on a
transitional timetable. Currently, Queensland has provided for the
introduction of gas competition based on a timetable, which allows for the
commencement of contestability for large customers (gas consumption of
at least 100 terajoules per year) from 1 July 2001 (tranche 1 contestability),
and all remaining customers on 1 September 2001 (tranche 2
contestability).
While legal contestability has been provided for, the development of
relevant market operating arrangements and supporting procedures, rules
and codes required to make contestability workable will take some time.
Due to the small number of consumers (approximately 20 to 30) in
tranche 1 contestability, relatively simple market operating arrangements
can be developed to underpin practical competition at this level.
The regulatory and administrative arrangements required to commence
the second tranche of contestability are far more complex than those
required for tranche 1. Such arrangements will not be developed in time to
allow commencement of the second tranche of contestability on
1 September 2001. A delay of 12 to 15 months is expected. Therefore, the
legislation seeks to delay the commencement of tranche 2 contestability
until 1 January 2003.
2
Gas Amendment Bill 2001
This delay will also more closely align competition in the electricity and
gas markets (as it is not expected that full retail competition in electricity
will occur, if at all, before January 2003).
Government is proposing to conduct a cost-benefit study on the likely
effects of its introduction, before committing to the introduction of full gas
retail competition. This study would consider, amongst other things, costs
of probable market operating arrangements.
The legislation provides the time necessary for the Government and
industry to develop detailed market operating arrangements required for
full retail competition, and allows for completion of this cost-benefit study.
Administrative cost to Government
No financial implications for Government of an administrative nature are
associated with the proposed legislative amendments.
Consistency with Fundamental Legislative Principles
The proposed amendments consist solely of changes to future dates
scheduling the introduction of gas retail market competition, and appear to
be consistent with fundamental legislative principles.
Consultation
The Departments of Primary Industries, Employment and Training,
Premier and Cabinet, State Development, Natural Resources and Mines,
and Treasury were consulted in drafting this Bill. The Queensland
Competition Authority was consulted regarding pipeline network third
party access matters.
Natural gas pipeline network operators and retailers were consulted on
the timing of introducing competition, and the issues associated with
making gas market competition workable.
3
Gas Amendment Bill 2001
NOTES ON PROVISIONS
Section 5B(1), as amended, provides that from 1 July 2001 to 31
December 2002, "contestable consumer" means a consumer of at least 100
terajoules of gas (in the previous financial year).
Section 5B(4), as amended, provides that from 1 January 2003,
"contestable consumers" means all consumers of gas.
Section 5C(1)(b), as amended, provides that for the period 1 July 2001 to
31 December 2002, "non-contestable consumer" means a consumer not
defined as a "contestable consumer" (in Section 5B(1)).
© State of Queensland 2001