ENERGY LEGISLATION FURTHER AMENDMENT BILL 2007

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ENERGY LEGISLATION FURTHER AMENDMENT BILL 2007

PARLIAMENT OF VICTORIA Energy Legislation Further Amendment Bill 2007 TABLE OF PROVISIONS Clause Page PART 1--PRELIMINARY 1 1 Purpose 1 2 Commencement 2 PART 2--AMENDMENT OF ELECTRICITY INDUSTRY ACT 2000 4 Division 1--Supplier of last resort amendments 4 3 New Division 8 of Part 2 inserted 4 Division 8--Supplier of last resort 4 49A Definitions 4 49B Meaning of related relevant customer information 7 49C Relevant customers for the purposes of this Division 7 49D Licence condition--supplier of last resort 8 49E Tariffs, terms and conditions for electricity supply following trigger event 10 49F Variation of tariffs, terms and conditions for electricity supply by supplier of last resort 12 49G Supply of specified relevant customer information after trigger event 12 49H Compliance with a relevant customer information notice 14 49I Commission to give specified relevant customer information it is given to supplier of last resort 14 49J Proceedings for contravention of requirement to comply with relevant customer information notice 14 49K Corporations Act displacement 15 4 Repeal of provision superseded by new Division 8 of Part 2 15 Division 2--Customer safety net amendments 16 5 Regulation of tariffs for prescribed customers 16 6 Condition restricting sale to certain customers 16 7 Offer to domestic or small business customers 16 561087B.I-18/9/2007 i BILL LA INTRODUCTION 18/9/2007

Clause Page 8 Terms and conditions of contracts for sale of electricity to certain customers 16 9 Publication of terms and conditions of sale of electricity 16 10 Deemed contracts with former franchise customers 16 11 Deemed contracts for supply and sale for relevant customers 16 Division 3--Other amendments 17 12 Offer to domestic or small business customers 17 13 Powers of VENCorp to manage electricity demand 17 PART 3--AMENDMENT OF GAS INDUSTRY ACT 2001 18 Division 1--Supplier of last resort amendments 18 14 New Division 6 of Part 3 inserted 18 Division 8--Supplier of last resort 18 51A Definitions 18 51B Meaning of related relevant customer information 20 51C Relevant customers for the purposes of this Division 21 51D Licence condition--supplier of last resort 21 51E Tariffs, terms and conditions for gas supply following trigger event 24 51F Variation of tariffs, terms and conditions for gas supply by supplier of last resort 26 51G Supply of specified relevant customer information after trigger event 26 51H Compliance with a relevant customer information notice 28 51I Commission to give specified relevant customer information it is given to supplier of last resort 28 51J Proceedings for contravention of requirement to comply with relevant customer information notice 28 51K Corporations Act displacement 29 15 Repeal of provision superseded by new Division 6 of Part 3 29 Division 2--Customer safety net amendments 30 16 Regulation of tariffs for prescribed customers 30 17 Offer to domestic or small business customers 30 18 Terms and conditions of contracts for sale of gas to certain customers 30 19 Publication of terms and conditions of sale of gas 30 20 Deemed contracts with former franchise customers 30 21 Deemed contracts for supply and sale for relevant customers 30 22 Cost recovery 30 561087B.I-18/9/2007 ii BILL LA INTRODUCTION 18/9/2007

Clause Page Division 3--MSO Rules related amendments 31 23 Insertion of new definition of AER into section 3 31 24 New definition inserted into Division 1 of Part 4 31 52AA Definitions 31 25 MSO Rules 31 26 New sections 52B and 52C inserted 33 52B Approval or determination by ACCC of market service fees payable by market participants 33 52C What if ACCC does not make a decision to approve (or not approve) the market service fees within time? 34 27 New section 53 substituted 34 53 VENCorp's access arrangement fees continue to apply until market service fees take effect 34 28 New section 67A inserted 35 67A Commission directions to VENCorp in relation to supplier of last resort trigger events 35 Division 4--Operation of underground storage facility 36 29 Repeal of definition 36 30 Repeal of obligation to be licensed to operate underground storage facility 36 31 Repeal of references to Port Campbell facility 36 Division 5--Other amendments 37 32 Offer to domestic or small business customers 37 33 AER approval or determination of fees payable by market participants 37 PART 4--AMENDMENT OF GAS PIPELINES ACCESS (VICTORIA) ACT 1998 38 34 New section 20A inserted 38 20A VENCorp not a service provider under Gas Pipelines Access (Victoria) Law and Gas Pipelines Access (Victoria) Regulations 38 PART 5--AMENDMENT OF GAS AND FUEL CORPORATION (HEATANE GAS) ACT 1993 39 35 New section 20A inserted 39 20A Effect of Order under section 11 39 561087B.I-18/9/2007 iii BILL LA INTRODUCTION 18/9/2007

Clause Page PART 6--REPEAL OF AMENDING ACT 40 36 Repeal 40 ENDNOTES 41 561087B.I-18/9/2007 iv BILL LA INTRODUCTION 18/9/2007

PARLIAMENT OF VICTORIA Introduced in the Assembly Energy Legislation Further Amendment Bill 2007 A Bill for an Act to amend the Electricity Industry Act 2000, the Gas Industry Act 2001, the Gas Pipelines Access (Victoria) Act 1998, the Gas and Fuel Corporation (Heatane Gas) Act 1993 and for other purposes. The Parliament of Victoria enacts: PART 1--PRELIMINARY 1 Purpose The main purpose of this Act is to-- (a) amend the Electricity Industry Act 2000 5 and the Gas Industry Act 2001 to-- (i) further provide for supplier of last resort arrangements; and (ii) extend the operation of the customer safety net provisions; and 561087B.I-18/9/2007 1 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 1--Preliminary s. 2 (b) amend the Electricity Industry Act 2000 to repeal a provision relating to VENCorp's powers to manage electricity demand; and (c) amend the Gas Industry Act 2001 to-- 5 (i) make miscellaneous amendments relating to the Market and System Operation Rules, including amendments providing for the approval of VENCorp's charges for the services 10 it provides to participants in the market regulated under those Rules; and (ii) repeal provisions and references relating to the Port Campbell underground storage facility; and 15 (d) amend the Gas Pipelines Access (Victoria) Act 1998 to provide that VENCorp is not to be taken to be a service provider under the Gas Pipelines Access (Victoria) Law and the Gas Pipelines Access (Victoria) Regulations 20 if it only operates or controls the operation of (without at the same time owning) a pipeline; and (e) amend the Gas and Fuel Corporation (Heatane Gas) Act 1993 to clarify the effect 25 of an Order made under section 11 of that Act relating to the transfer of the ownership of the heatane gas pipeline. 2 Commencement (1) This Act (except sections 23, 25(1), 26 and 33) 30 comes into operation on the day after the day this Act receives the Royal Assent. (2) Subject to subsection (3), sections 23, 25(1), 26 and 33 come into operation on a day or days to be proclaimed. 561087B.I-18/9/2007 2 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 1--Preliminary s. 2 (3) If a provision referred to in subsection (2) does not come into operation before 1 January 2010, it comes into operation on that day. __________________ 561087B.I-18/9/2007 3 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 PART 2--AMENDMENT OF ELECTRICITY INDUSTRY ACT 2000 Division 1--Supplier of last resort amendments 3 New Division 8 of Part 2 inserted 5 See: Act No. After section 49 of the Electricity Industry Act 68/2000. 2000 insert-- Reprint No. 4 as at 9 November "Division 8--Supplier of last resort 2006 and amending Act No. 49A Definitions 35/2007. LawToday: In this Division-- www. 10 legislation. connection point has the same meaning as in vic.gov.au Chapter 10 of the National Electricity Rules; defaulting licensee has the meaning given by section 49D(5); 15 distribution services means services provided by means of a distribution system; insolvency official means an administrator, liquidator, provisional liquidator, 20 receiver or receiver and manager; metering installation has the same meaning as in Chapter 10 of the National Electricity Rules; network tariff code means the descriptor 25 assigned by a distribution company to its charges for distribution services or charges for classes of distribution services that it supplies; related relevant customer information has 30 the meaning given by section 49B; 561087B.I-18/9/2007 4 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 relevant customer means a person, or a member of a class of persons, to whom an Order under section 49C(1) applies; relevant customer information means the 5 following information-- (a) the name and contact details of a relevant customer; and (b) the address of a relevant customer for electricity billing purposes; 10 and (c) the address of a relevant customer at which the relevant customer is supplied electricity if that address is different from the address for 15 electricity billing purposes; and (d) the national metering identifier (as defined in clause 7.3.1 of the National Electricity Rules) and issued under that clause for the 20 metering installation relating to the connection point at which a relevant customer is supplied electricity; and (e) the network tariff code or network 25 tariff codes relating to the distribution services supplied by a distribution company to enable a relevant customer to be supplied electricity; and 30 (f) details of a relevant customer's average monthly electricity consumption at premises where the relevant customer is supplied electricity, calculated on the basis 35 of that customer's monthly electricity consumption at the 561087B.I-18/9/2007 5 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 premises in the 12 months immediately prior to the occurrence of the trigger event; and 5 (g) information evidencing whether a relevant customer is an eligible beneficiary (within the meaning of the State Concessions Act 2004); and 10 (h) details of any continuous supply arrangements for a relevant customer who requires that kind of supply because of a medical condition; 15 relevant customer information notice means a notice given under section 49G(2) or (3); specified relevant customer information means relevant customer information or 20 related relevant customer information specified in a notice under section 49G(2) or (3); supplier of last resort means a licensee who-- 25 (a) holds a licence the conditions of which are subject to a requirement of the kind specified in section 49D(1); and (b) by operation of section 49D(5), is 30 obliged to supply or sell electricity to a relevant customer in accordance with that requirement; trigger event means an event specified in section 49D(5)(a) or (b). 561087B.I-18/9/2007 6 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 49B Meaning of related relevant customer information Related relevant customer information is information relating to a relevant customer 5 of a defaulting licensee (that is not relevant customer information) that the Commission considers a supplier of last resort must have in order for that supplier to perform its obligation under section 49D(5) in relation to 10 that relevant customer. 49C Relevant customers for the purposes of this Division (1) The Governor in Council may, by Order published in the Government Gazette, 15 declare that a person or a class of persons specified in the Order is, for the purposes of this Division, a relevant customer or class of relevant customers. (2) An Order under subsection (1) may specify a 20 class of persons by reference to all or any of the following-- (a) the person authorised to sell the electricity; (b) the purpose for which the electricity is 25 used; (c) the quantity of electricity used; (d) the period of use; (e) the place of supply; (f) any other specified factor relevant to 30 the sale of electricity. (3) An Order under subsection (1) may confer powers and functions on, and leave any matter to be decided by, the Commission. 561087B.I-18/9/2007 7 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 49D Licence condition--supplier of last resort (1) Without limiting the generality of section 20, the conditions to which a licence to distribute or supply, or to sell, electricity is subject 5 may include a requirement that, in certain circumstances, the licensee, at tariffs and on terms and conditions approved by the Commission, having regard to the matters referred to in subsection (2), supply or sell 10 electricity to relevant customers to whom electricity is supplied or sold under another such licence (whether held by that licensee or another licensee). (2) In approving the tariffs and terms and 15 conditions of a requirement referred to in subsection (1), the Commission must have regard to-- (a) the risks and costs associated with the requirement; and 20 (b) the extent to which the licensee or another licensee has developed systems to comply with such a requirement; and (c) any tariffs and terms and conditions proposed by the licensee whether or not 25 at the request of the Commission. (3) A requirement referred to in subsection (1) does not apply so as to require the licensee to supply or sell electricity-- (a) if the licensee's licence provides for a 30 distribution area, outside that area; or (b) to a customer to whom electricity is supplied or sold under another licence if the customer elects, in writing given to the holder of that other licence, not 35 to be a customer of that other licensee for the purposes of subsection (1). 561087B.I-18/9/2007 8 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 (4) If the conditions to which a licence of a licensee is subject include a requirement referred to in subsection (1), the licensee is deemed to be the holder of a licence to sell 5 electricity to the extent necessary to comply with the requirement. (5) The obligation of a licensee to supply or sell electricity to a relevant customer to whom electricity is supplied or sold by another 10 licensee (the defaulting licensee) in accordance with the requirement referred to in subsection (1) commences when-- (a) the defaulting licensee's licence is revoked; or 15 (b) the right of the defaulting licensee to acquire electricity from the wholesale electricity market is suspended or terminated-- whichever first occurs. 20 (6) The obligation of the supplier of last resort ends-- (a) 3 months after its commencement; or (b) when the customer advises the supplier of last resort that the supply or sale is 25 no longer required; or (c) when the customer transfers to become the customer of another licensee; or (d) when the customer enters into a new contract with the supplier of last resort 30 for the supply or sale of electricity-- whichever first occurs. 561087B.I-18/9/2007 9 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 (7) The Commission must notify the supplier of last resort, as soon as practicable, of the commencement of the supplier of last resort's obligation under subsection (5). 5 49E Tariffs, terms and conditions for electricity supply following trigger event (1) This section applies if a trigger event occurs. (2) The tariffs and terms and conditions upon which a supplier of last resort will supply or 10 sell electricity to relevant customers of a defaulting licensee are-- (a) the tariffs and terms and conditions approved by the Commission after proposed tariffs, terms and conditions 15 have been submitted by that supplier for approval; or (b) if-- (i) the supplier has submitted tariffs, terms and conditions for approval 20 and any changes proposed by the Commission are not adopted by the supplier within one month after being proposed; or (ii) if the supplier, after being given at 25 least one month's notice to submit proposed tariffs, terms and conditions to the Commission, fails to comply with the request-- the tariffs, terms and conditions 30 specified by the Commission as the approved tariffs, terms and conditions. (3) The supplier of last resort or, if the Commission specifies the tariffs and terms and conditions, the Commission, must cause 35 notice of the approved tariffs, terms and 561087B.I-18/9/2007 10 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 conditions to be published in the Government Gazette. (4) The tariffs and terms and conditions of which notice has been published in 5 accordance with subsection (3) are binding on the supplier of last resort and the relevant customers to which they apply and, when the supplier of last resort is acting in accordance with those tariffs, terms and conditions, they 10 have effect despite any agreement or instrument to the contrary relating to the distribution or supply, or sale, of electricity to relevant customers. (5) A supplier of last resort and a relevant 15 customer to whom the supplier of last resort has an obligation under section 49D(5) to supply or sell electricity are deemed to have entered into a contract on the relevant tariffs, terms and conditions published under 20 subsection (3). (6) The terms and conditions of a requirement referred to in section 49D(1) may include a condition setting out circumstances in which a licensee must continue to supply or sell 25 electricity to a relevant customer to whom the supplier of last resort supplies or sells electricity under an obligation under section 49D(5) after that obligation comes to an end in accordance with section 49D(6)(a). 30 (7) A condition referred to in subsection (6) must provide for the tariff or tariffs and the terms and conditions for the continued supply or sale of electricity to be determined by the supplier of last resort. 561087B.I-18/9/2007 11 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 49F Variation of tariffs, terms and conditions for electricity supply by supplier of last resort (1) Tariffs, terms and conditions approved or 5 specified by the Commission under section 49E may be varied from time to time. (2) Section 49E applies to a variation under this section in the same manner as it applies to the approval or specification of a tariff, term 10 or condition. (3) If a variation is approved or specified under this section, section 49E(4) and (5) apply to the tariffs, terms and conditions as so varied. 49G Supply of specified relevant customer 15 information after trigger event (1) This section applies if a trigger event occurs. (2) The Commission, by written notice, may request a defaulting licensee, or if an insolvency official has been appointed for 20 the defaulting licensee, the insolvency official, for-- (a) relevant customer information; and (b) related relevant customer information-- 25 specified in the notice. (3) A supplier of last resort, by written notice, may request-- (a) a defaulting licensee; or (b) if an insolvency official has been 30 appointed for the defaulting licensee, the insolvency official-- for relevant customer information specified in the notice. 561087B.I-18/9/2007 12 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 (4) The Commission or the supplier of last resort is not entitled to request information under subsection (2) or (3) in respect of a relevant customer after the obligation of the supplier 5 of last resort specified in section 49D(5) ends in accordance with section 49D(6) in respect of that customer. (5) A notice under subsection (2) or (3) must-- (a) state the name of the supplier of last 10 resort and the contact details of a representative of the supplier; and (b) specify the day by when the specified relevant customer information must be given to the Commission or supplier of 15 last resort (as the case requires), being a day that is not less than 3 days after the date of the notice; and (c) set out the details of the trigger event; and 20 (d) specify the manner in which the specified relevant customer information must be given; and (e) state that this notice is given under this section; and 25 (f) include a statement to the effect that if section 49H(1) is contravened, proceedings may be brought under section 49J or the Essential Services Commission Act 2001 in respect of 30 that contravention. Note A proceeding may be brought under the Essential Services Commission Act 2001 in respect of a defaulting licensee who is in breach 35 of the licence condition specified in section 49H. 561087B.I-18/9/2007 13 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 3 49H Compliance with a relevant customer information notice (1) A defaulting licensee, or an insolvency official appointed for a defaulting licensee, 5 must comply with a relevant customer information notice that is given to them if the defaulting licensee or insolvency official has the specified relevant customer information in their possession, custody or control. 10 (2) Without limiting section 20, subsection (1) is deemed to be a licence condition of a defaulting licensee whose licence has not been revoked. 49I Commission to give specified relevant 15 customer information it is given to supplier of last resort On being given specified relevant customer information, the Commission must give that information to the supplier of last resort that 20 is obliged under section 49D(5) to supply or sell electricity to the relevant customer to which that information relates. 49J Proceedings for contravention of requirement to comply with relevant 25 customer information notice (1) This section applies if-- (a) the Commission or a supplier of last resort gives a relevant customer information notice to a defaulting 30 licensee or an insolvency official appointed for a defaulting licensee; and (b) the defaulting licensee or insolvency official does not comply with any aspect of the notice. 561087B.I-18/9/2007 14 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 4 (2) The Supreme Court, on an application by the Commission or the supplier of last resort that gave the relevant customer information notice may, by order, declare whether or not 5 the defaulting licensee or insolvency official to which the application relates has contravened section 49H(1). (3) If the order declares the person to have contravened section 49H(1), the order may 10 include a requirement that the defaulting licensee or insolvency official take such action, or adopt such practice, as the Supreme Court requires for remedying the contravention or preventing a recurrence of 15 the contravention. 49K Corporations Act displacement This Division is declared to be a Corporations legislation displacement provision for the purposes of section 5G of 20 the Corporations Act in relation to the provisions of Chapter 5 of that Act. Note Section 5G of the Corporations Act provides that if a State law declares a provision of a State law to be a Corporations 25 legislation displacement provision, any provision of the Corporations legislation with which the State provision would otherwise be inconsistent does not apply to the extent necessary to avoid the inconsistency.". 4 Repeal of provision superseded by new Division 8 of 30 Part 2 Section 27 of the Electricity Industry Act 2000 is repealed. 561087B.I-18/9/2007 15 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 5 Division 2--Customer safety net amendments 5 Regulation of tariffs for prescribed customers In section 13(7) of the Electricity Industry Act 2000 for "31 December 2007" substitute 5 "31 December 2008". 6 Condition restricting sale to certain customers In section 23(4) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 10 7 Offer to domestic or small business customers In section 35(9) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 8 Terms and conditions of contracts for sale of 15 electricity to certain customers In section 36(7) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 9 Publication of terms and conditions of sale of 20 electricity In section 36A(6) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 10 Deemed contracts with former franchise customers 25 In section 37(3) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 11 Deemed contracts for supply and sale for relevant customers 30 In section 39(11) of the Electricity Industry Act 2000 for "31 December 2007" substitute "31 December 2008". 561087B.I-18/9/2007 16 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 2--Amendment of Electricity Industry Act 2000 s. 12 Division 3--Other amendments 12 Offer to domestic or small business customers In section 35(1)(a) and (b) and (3) of the Electricity Industry Act 2000 for "2 months" 5 substitute "one month". 13 Powers of VENCorp to manage electricity demand (1) Section 79A of the Electricity Industry Act 2000 is repealed. (2) In section 79B(1)(a) of the Electricity Industry 10 Act 2000-- (a) omit "79A or"; (b) for "either of those sections" substitute "that section". __________________ 561087B.I-18/9/2007 17 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 PART 3--AMENDMENT OF GAS INDUSTRY ACT 2001 Division 1--Supplier of last resort amendments 14 New Division 6 of Part 3 inserted See: After section 51 of the Gas Industry Act 2001 Act No. 5 31/2001. insert-- Reprint No. 3 as at 11 October "Division 8--Supplier of last resort 2006 and amending Act Nos 51A Definitions 61/2005 and 35/2007. In this Division-- LawToday: www. defaulting licensee has the meaning given 10 legislation. by section 51D(5); vic.gov.au gas distribution services means services provided by means of a distribution pipeline; insolvency official means an administrator, 15 liquidator, provisional liquidator, receiver or receiver and manager; MIRN means the unique identifier for a gas metering installation allocated and registered under retail gas market rules 20 developed by VENCorp under section 62, or a gas distribution company under section 63, and approved by the Commission under section 65 that are in effect; 25 network tariff code means the descriptor assigned by a gas distribution company to its charges for gas distribution services or charges for classes of gas distribution services that it supplies; 561087B.I-18/9/2007 18 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 related relevant customer information has the meaning given by section 51B; relevant customer means a person, or a member of a class of persons, to whom 5 an Order under section 51C(1) applies; relevant customer information means the following information-- (a) the name and contact details of a relevant customer; and 10 (b) the address of a relevant customer for gas billing purposes; and (c) the address of a relevant customer at which the relevant customer is supplied gas if that address is 15 different from the address for gas billing purposes; and (d) the MIRN for the gas metering installation at the supply point at which a relevant customer is 20 supplied gas; and (e) the network tariff code or network tariff codes relating to the gas distribution services supplied by a gas distribution company to 25 enable a relevant customer to be supplied gas; and (f) details of a relevant customer's average monthly gas consumption at premises where the relevant 30 customer is supplied gas, calculated on the basis of that customer's monthly gas consumption at the premises in the 12 months immediately prior to 35 the occurrence of the trigger event; and 561087B.I-18/9/2007 19 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 (g) information evidencing whether a relevant customer is an eligible beneficiary (within the meaning of the State Concessions Act 2004); 5 and (h) details of any continuous supply arrangements for a relevant customer who requires that kind of supply because of a medical 10 condition; relevant customer information notice means a notice given under section 51G(2) or (3); specified relevant customer information 15 means relevant customer information specified in a notice under section 51G(2) or (3); supplier of last resort means a licensee who-- 20 (a) holds a licence the conditions of which are subject to a requirement of the kind specified in section 51D(1); and (b) by operation of section 51D(5), is 25 obliged to supply or sell gas to a relevant customer in accordance with that requirement; trigger event means an event specified in section 51D(5)(a) or (b). 30 51B Meaning of related relevant customer information Related relevant customer information is information relating to a relevant customer of a defaulting licensee (that is not relevant 35 customer information) that the Commission 561087B.I-18/9/2007 20 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 considers a supplier of last resort must have in order for that supplier to perform its obligation under section 51D(5) in relation to that relevant customer. 5 51C Relevant customers for the purposes of this Division (1) The Governor in Council may, by Order published in the Government Gazette, declare that a person or a class of persons 10 specified in the Order is, for the purposes of this Division, a relevant customer or class of relevant customers. (2) An Order under subsection (1) may specify a class of persons by reference to all or any of 15 the following-- (a) the person authorised to sell the gas; (b) the purpose for which the gas is used; (c) the quantity of gas used; (d) the period of use; 20 (e) the place of supply; (f) any other specified factor relevant to the sale of gas. (3) An Order under subsection (1) may confer powers and functions on, and leave any 25 matter to be decided by, the Commission. 51D Licence condition--supplier of last resort (1) Without limiting the generality of section 28, the conditions to which a licence to provide services by means of a distribution pipeline 30 or to sell gas by retail is subject may include a requirement that, in certain circumstances, the licensee, on tariffs, terms and conditions approved by the Commission, having regard to the matters referred to in subsection (2), 561087B.I-18/9/2007 21 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 supply or sell gas to relevant customers to whom gas is supplied or sold under another licence (whether held by that licensee or another licensee). 5 (2) In approving the tariffs and terms and conditions of a requirement referred to in subsection (1), the Commission must have regard to-- (a) the risks and costs associated with the 10 requirement; and (b) the extent to which the licensee or another licensee has developed systems to comply with such a requirement; and (c) any tariffs and terms and conditions 15 proposed by the licensee whether or not at the request of the Commission. (3) A requirement referred to in subsection (1) does not apply so as to require the licensee to supply or sell gas-- 20 (a) if the licensee's licence provides for a distribution area, outside that area; or (b) to a customer to whom gas is supplied or sold under another licence if the customer elects, in writing given to the 25 holder of that other licence, not to be a customer of that other licensee for the purposes of subsection (1); or (c) if to do so would be inconsistent with the licensee's obligations under the 30 Access Code. (4) If the conditions to which a licence of a licensee is subject include a requirement referred to in subsection (1), the licensee is deemed to be authorised to supply or sell gas 561087B.I-18/9/2007 22 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 to the extent necessary to comply with the requirement. (5) The obligation of a licensee to supply or sell gas to a relevant customer to whom gas is 5 supplied or sold under another licence (the defaulting licensee) in accordance with the requirement referred to in subsection (1) commences when-- (a) the defaulting licensee's licence is 10 revoked; or (b) the defaulting licensee has been deregistered as a market participant in the category of retailer under the MSO Rules after a notice of suspension was 15 issued to the licensee by VENCorp under those Rules-- whichever first occurs. (6) The obligation of the supplier of last resort ends-- 20 (a) 3 months after its commencement; or (b) when the customer advises the supplier of last resort that the supply or sale is no longer required; or (c) when the customer transfers to become 25 the customer of another licensee; or (d) when the customer enters into a new contract with the supplier of last resort for the supply or sale of gas-- whichever first occurs. 30 (7) The Commission must notify the supplier of last resort, as soon as practicable, of the commencement of the supplier of last resort's obligation under subsection (5). 561087B.I-18/9/2007 23 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 51E Tariffs, terms and conditions for gas supply following trigger event (1) This section applies if a trigger event occurs. (2) The tariffs and terms and conditions upon 5 which a supplier of last resort will supply or sell gas to relevant customers of a defaulting licensee are-- (a) the tariffs and terms and conditions approved by the Commission after 10 proposed tariffs, terms and conditions have been submitted by that supplier for approval; or (b) if-- (i) the supplier has submitted tariffs, 15 terms and conditions for approval and any changes proposed by the Commission are not adopted by the supplier within one month after being proposed; or 20 (ii) if the supplier, after being given at least one month's notice to submit proposed tariffs, terms and conditions to the Commission, fails to comply with the request-- 25 the tariffs, terms and conditions specified by the Commission as the approved tariffs, terms and conditions. (3) The supplier of last resort, or if the Commission specifies the tariffs, terms and 30 conditions, the Commission, must cause notice of the approved tariffs, terms and conditions to be published in the Government Gazette. 561087B.I-18/9/2007 24 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 (4) The tariffs, terms and conditions of which notice has been published in accordance with subsection (3) are binding on the supplier of last resort and the relevant customers to 5 which they apply and, when the supplier of last resort is acting in accordance with those tariffs, terms and conditions, they have effect despite any agreement or instrument to the contrary relating to the distribution or 10 supply, or sale of gas to those relevant customers. (5) A supplier of last resort and a relevant customer to whom the supplier of last resort has an obligation under section 51D(5) to 15 supply or sell gas are deemed to have entered into a contract on the relevant tariffs, terms and conditions published under subsection (3). (6) The terms and conditions of a requirement 20 referred to in section 51D(1) may include a condition setting out circumstances in which a supplier of last resort must continue to supply or sell gas to a relevant customer to whom the supplier of last resort supplies or 25 sells gas under an obligation under section 51D(5) after that obligation comes to an end in accordance with section 51D(6)(a). (7) A condition referred to in subsection (6) must provide for the tariff or tariffs and the 30 terms and conditions for the continued supply or sale of gas to be determined by the supplier of last resort. 561087B.I-18/9/2007 25 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 51F Variation of tariffs, terms and conditions for gas supply by supplier of last resort (1) Terms and conditions approved or specified by the Commission under section 51E may 5 be varied from time to time. (2) Section 51E applies to a variation under this section in the same manner as it applies to the approval or specification of a term or condition. 10 (3) If a variation is approved or specified under this section, section 51E(4) and (5) apply to the terms and conditions as so varied. 51G Supply of specified relevant customer information after trigger event 15 (1) This section applies if a trigger event occurs. (2) The Commission, by written notice, may request a defaulting licensee, or if an insolvency official has been appointed for the defaulting licensee, the insolvency 20 official, for-- (a) relevant customer information; and (b) related relevant customer information-- specified in the notice. 25 (3) A supplier of last resort, by written notice, may request-- (a) a defaulting licensee; or (b) if an insolvency official has been appointed for the defaulting licensee, 30 the insolvency official-- for relevant customer information specified in the notice. 561087B.I-18/9/2007 26 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 (4) The Commission or the supplier of last resort is not entitled to request information under subsection (2) or (3) in respect of a relevant customer after the obligation of the supplier 5 of last resort specified in section 51D(5) ends in accordance with section 51D(6) in respect of that customer. (5) A notice under subsection (2) or (3) must-- (a) state the name of the supplier of last 10 resort and the contact details of a representative of the supplier; and (b) specify the day by when the specified relevant customer information must be given to the Commission or supplier of 15 last resort (as the case requires), being a day that is not less than 3 days after the date of the notice; and (c) set out the details of the trigger event; and 20 (d) specify the manner in which the specified relevant customer information must be given; and (e) state that this notice is given under this section; and 25 (f) include a statement to the effect that if section 51H(1) is contravened, proceedings may be brought under section 51J or the Essential Services Commission Act 2001 in respect of 30 that contravention. Note A proceeding may be brought under the Essential Services Commission Act 2001 in respect of a defaulting licensee who is in breach 35 of the licence condition specified in section 51H. 561087B.I-18/9/2007 27 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 14 51H Compliance with a relevant customer information notice (1) A defaulting licensee, or an insolvency official appointed for a defaulting licensee, 5 must comply with a relevant customer information notice that is given to them if the defaulting licensee or insolvency official has the specified relevant customer information in their possession, custody or control. 10 (2) Without limiting section 28, subsection (1) is deemed to be a licence condition of a defaulting licensee whose licence has not been revoked. 51I Commission to give specified relevant 15 customer information it is given to supplier of last resort On being given specified relevant customer information, the Commission must give that information to the supplier of last resort that 20 is obliged under section 51D(5) to supply or sell gas to the relevant customer to which that information relates. 51J Proceedings for contravention of requirement to comply with relevant 25 customer information notice (1) This section applies if-- (a) the Commission or a supplier of last resort gives a relevant customer information notice to a defaulting 30 licensee or an insolvency official appointed for a defaulting licensee; and (b) the defaulting licensee or insolvency official does not comply with any aspect of the notice. 561087B.I-18/9/2007 28 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 15 (2) The Supreme Court, on an application by the Commission or the supplier of last resort that gave the relevant customer information notice may, by order, declare whether or not 5 the defaulting licensee or insolvency official to which the application relates has contravened section 51H(1). (3) If the order declares the person to have contravened section 51H(1), the order may 10 include a requirement that the defaulting licensee or insolvency official take such action, or adopt such practice, as the Supreme Court requires for remedying the contravention or preventing a recurrence of 15 the contravention. 51K Corporations Act displacement This Division is declared to be a Corporations legislation displacement provision for the purposes of section 5G of 20 the Corporations Act in relation to the provisions of Chapter 5 of that Act. Note Section 5G of the Corporations Act provides that if a State law declares a provision of a State law to be a Corporations 25 legislation displacement provision, any provision of the Corporations legislation with which the State provision would otherwise be inconsistent does not apply to the extent necessary to avoid the inconsistency.". 15 Repeal of provision superseded by new Division 6 of 30 Part 3 Section 34 of the Gas Industry Act 2001 is repealed. 561087B.I-18/9/2007 29 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 16 Division 2--Customer safety net amendments 16 Regulation of tariffs for prescribed customers In section 21(7) of the Gas Industry Act 2001 for "31 December 2007" (where twice occurring) 5 substitute "31 December 2008". 17 Offer to domestic or small business customers In section 42(9) of the Gas Industry Act 2001 for "31 December 2007" substitute "31 December 2008". 10 18 Terms and conditions of contracts for sale of gas to certain customers In section 43(7) of the Gas Industry Act 2001 for "31 December 2007" substitute "31 December 2008". 15 19 Publication of terms and conditions of sale of gas In section 43A(6) of the Gas Industry Act 2001 for "31 December 2007" substitute "31 December 2008". 20 Deemed contracts with former franchise customers 20 In section 44(3) of the Gas Industry Act 2001 for "31 December 2007" substitute "31 December 2008". 21 Deemed contracts for supply and sale for relevant customers 25 In section 46(11) of the Gas Industry Act 2001 for "31 December 2007" substitute "31 December 2008". 22 Cost recovery In section 68(6) of the Gas Industry Act 2001 for 30 "31 December 2007" substitute "31 December 2008". 561087B.I-18/9/2007 30 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 23 Division 3--MSO Rules related amendments 23 Insertion of new definition of AER into section 3 In section 3 of the Gas Industry Act 2001 after the definition of Access Code insert-- 5 "AER means the Australian Energy Regulator established by section 44AE of the Trade Practices Act;". 24 New definition inserted into Division 1 of Part 4 Before section 52 of the Gas Industry Act 2001 10 insert-- "52AA Definitions In this Division-- market services means services provided by VENCorp to market participants in 15 operating-- (a) the market the operation of which is regulated under the MSO Rules; and (b) the gas transmission system under 20 the MSO Rules; market service fees means fees chargeable by VENCorp under the MSO Rules for the market services.". 25 MSO Rules 25 (1) In section 52(4) of the Gas Industry Act 2001, after "ACCC" insert ", the AER". (2) After section 52(4A)(b) of the Gas Industry Act 2001 insert-- "(ba) include provisions that-- 30 (i) authorise VENCorp to charge market participants market service fees that have taken effect; 561087B.I-18/9/2007 31 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 25 (ii) specify by when VENCorp must submit to the ACCC for approval under section 52B VENCorp's proposed market service fees; 5 (iii) provide for the content of submissions referred to in subparagraph (ii) and information that must or may accompany such submissions; (iv) specify the procedure to be followed, 10 and the matters to be taken into account by the ACCC, in-- (A) approving (or not approving) VENCorp's proposed market service fees; 15 (B) determining market service fees (if it does not approve VENCorp's proposed market service fees); (v) specify by when the ACCC must make a decision that-- 20 (A) approves (or not approve) VENCorp's proposed market service fees; or (B) determines market service fees (if it does not approve VENCorp's 25 proposed market service fees); (vi) provide for when market service fees approved or determined by the ACCC take effect and the period for which those fees will apply under the MSO 30 Rules; (vii) oblige market participants to pay to VENCorp market service fees in accordance with the MSO Rules;". (3) Section 52(6) of the Gas Industry Act 2001 is 35 repealed. 561087B.I-18/9/2007 32 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 26 26 New sections 52B and 52C inserted After section 52A of the Gas Industry Act 2001 insert-- "52B Approval or determination by ACCC of 5 market service fees payable by market participants (1) VENCorp must, in accordance with the MSO Rules, submit to the ACCC for approval VENCorp's proposed market service fees 10 that are to apply under those Rules. (2) Subject to this section, on receiving VENCorp's proposed market service fees, the ACCC must, in accordance with the MSO Rules-- 15 (a) approve (or not approve) the proposed fees; and (b) if the ACCC does not approve VENCorp's proposed market service fees, determine the market service fees 20 that are to apply under those Rules. (3) The ACCC may only approve VENCorp's proposed market service fees, or determine the market service fees, that are to apply under the MSO Rules on a full cost recovery 25 and no operating surplus basis. (4) In this section-- full cost recovery and no operating surplus basis means the recovery of costs of providing the market services without 30 consideration of profit or return on investment. 561087B.I-18/9/2007 33 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 27 52C What if ACCC does not make a decision to approve (or not approve) the market service fees within time? (1) This section applies if-- 5 (a) VENCorp submits its proposed market service fees in accordance with section 52B; and (b) the ACCC does not make a decision approving or not approving those 10 proposed market service fees under section 52B by the date specified in the MSO Rules as the date by which it must make such a decision. (2) The ACCC must be taken to have approved 15 VENCorp's proposed market service fees under section 52B and those fees take effect on the day the ACCC was required, under the MSO Rules, to make its decision to approve (or not approve) them.". 20 27 New section 53 substituted For section 53 of the Gas Industry Act 2001 substitute-- "53 VENCorp's access arrangement fees continue to apply until market service fees 25 take effect Despite section 20A of the Gas Pipelines Access (Victoria) Act 1998 or anything to the contrary in the MSO Rules, the market service fees in respect of which reference 30 tariffs have been approved under the Access Code and VENCorp's access arrangement continue to apply for the purposes of the MSO Rules until market service fees approved, or determined, under section 52B 35 take effect.". 561087B.I-18/9/2007 34 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 28 28 New section 67A inserted After section 67 of the Gas Industry Act 2001 insert-- "67A Commission directions to VENCorp in 5 relation to supplier of last resort trigger events (1) The Commission, by written notice, may direct VENCorp to do a thing specified in the notice so that a relevant customer in the 10 retail gas market regulated under the VENCorp retail gas market rules can be supplied gas by a supplier of last resort on the occurrence of a trigger event. (2) Despite anything to the contrary in this Act, 15 the VENCorp retail gas market rules or the MSO Rules, VENCorp must comply with a notice under subsection (1). (3) In this section-- relevant customer has the same meaning as 20 in section 51A; supplier of last resort has the same meaning as in section 51A; trigger event has the same meaning as in section 51A; 25 VENCorp retail gas market rules means retail gas market rules developed by VENCorp under section 62 and approved by the Commission under section 65 that are in effect.". 561087B.I-18/9/2007 35 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 29 Division 4--Operation of underground storage facility 29 Repeal of definition In section 3 of the Gas Industry Act 2001, the definition of Port Campbell facility is repealed. 5 30 Repeal of obligation to be licensed to operate underground storage facility Section 23 of the Gas Industry Act 2001 is repealed. 31 Repeal of references to Port Campbell facility 10 (1) In section 114 of the Gas Industry Act 2001, in the definition of relevant corporation, omit "owner or operator of the Port Campbell facility,". (2) In section 127(4) of the Gas Industry Act 2001 omit "owners, or operators of the Port Campbell 15 facility,". (3) Section 128(2)(e)(i) of the Gas Industry Act 2001 is repealed. (4) In section 128(2)(e)(iii) of the Gas Industry Act 2001 omit "the Port Campbell facility or". 20 (5) Section 128(3)(a)(i) of the Gas Industry Act 2001 is repealed. (6) In section 128(3)(a)(iii) of the Gas Industry Act 2001 omit "the Port Campbell facility or". (7) Section 128(13) of the Gas Industry Act 2001 is 25 repealed. (8) In section 131(1)(c) and (3)(f) of the Gas Industry Act 2001 omit "the Port Campbell facility or". (9) In section 134(1) of the Gas Industry Act 2001 30 omit "the Port Campbell facility or". 561087B.I-18/9/2007 36 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 3--Amendment of Gas Industry Act 2001 s. 32 Division 5--Other amendments 32 Offer to domestic or small business customers In section 42(1)(a) and (b) and (3) of the Gas Industry Act 2001 for "2 months" substitute 5 "one month". 33 AER approval or determination of fees payable by market participants (1) In section 52(4A)(ba) of the Gas Industry Act 2001, for "ACCC" (wherever occurring) 10 substitute "AER". (2) In sections 52B and 52C of the Gas Industry Act 2001, for "ACCC" (wherever occurring) substitute "AER". __________________ 561087B.I-18/9/2007 37 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 4--Amendment of Gas Pipelines Access (Victoria) Act 1998 s. 34 PART 4--AMENDMENT OF GAS PIPELINES ACCESS (VICTORIA) ACT 1998 34 New section 20A inserted See: After section 20 of the Gas Pipelines Access Act No. 5 31/1998. (Victoria) Act 1998 insert-- Reprint No. 1 as at "20A VENCorp not a service provider under 8 March 2004. LawToday: Gas Pipelines Access (Victoria) Law and www. Gas Pipelines Access (Victoria) legislation. vic.gov.au Regulations 10 Despite anything to the contrary in the Gas Pipelines Access (Victoria) Law and Gas Pipelines Access (Victoria) Regulations, VENCorp is not to be taken to be a service provider if it operates, or controls the 15 operation of (without at the same time owning) a pipeline.". __________________ 561087B.I-18/9/2007 38 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 5--Amendment of Gas and Fuel Corporation (Heatane Gas) Act 1993 s. 35 PART 5--AMENDMENT OF GAS AND FUEL CORPORATION (HEATANE GAS) ACT 1993 35 New section 20A inserted After section 20 of the Gas and Fuel See: Act No. 5 Corporation (Heatane Gas) Act 1993 insert-- 88/1993. Reprint No. 1 "20A Effect of Order under section 11 as at 13 January (1) The relevant Order has, and is deemed 2000 and always to have had, the same force and effect amending as it would have had if for paragraph (c) of Act No. 44/2001. 10 the relevant Order there were substituted-- LawToday: www. "(c) approves the transfer of the Heatane legislation. pipeline to Elgas Reticulation Pty Ltd vic.gov.au on the terms and conditions agreed between the Gas and Fuel Corporation 15 of Victoria and Elgas Reticulation Pty Ltd in the deed known as the Sale of Pipeline and Transfer of Easement Agreement dated 14 May 1993.". (2) In this section-- 20 relevant Order means the Order of the Governor in Council made under section 11 and published in the Government Gazette on 25 August 1994.". __________________ 561087B.I-18/9/2007 39 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Part 6--Repeal of Amending Act s. 36 PART 6--REPEAL OF AMENDING ACT 36 Repeal This Act is repealed on 1 January 2010. 561087B.I-18/9/2007 40 BILL LA INTRODUCTION 18/9/2007

Energy Legislation Further Amendment Bill 2007 Endnotes ENDNOTES By Authority. Government Printer for the State of Victoria. 561087B.I-18/9/2007 41 BILL LA INTRODUCTION 18/9/2007

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