Express law No. 03

13 July 2004

Energy reform legislation

On 30 June 2004, two Commonwealth Acts, forming part
of national energy market reforms, received Royal Assent.

Current energy regulation

Current energy regulation involves:

• the Commonwealth Trade Practices Act 1974;
• co-operative legislative schemes for both electricity
  and gas comprising:
• the National Electricity Law, and National Electricity
  Code, under the National Electricity (South Australia)
  Act 1996 (SA), applied as a law of the jurisdiction
  by participating States and Territories; and
• the Gas Pipelines Access Law, and National Third
  Party Access Code for Natural Gas Pipeline Systems,
  under the Gas Pipelines Access (South Australia)
  Act 1997, applied as a law of the jurisdiction by the Commonwealth
  and participating States and Territories; and
• State and Territory specific regulation of electricity
  and gas, generally involving licensing and retail regulation.

Reforms

The recent Commonwealth Acts are part of changes to national
energy regulation outlined by the Ministerial Council on
Energy, comprising the energy Ministers from the Commonwealth,
States and Territories, in its report of 11 December 2003.
You can get the report or further information about energy
reform, and subscribe to regular email bulletins on energy
reform at this link.

The first stage of reform involves:

• establishing two new statutory bodies, the Australian
  Energy Regulator, by the Commonwealth, and the Australian
  Energy Market Commission, by South Australia;
• amending the National Electricity Law and Code to
  confer functions and powers on the new bodies; and
• amending the State and Territory Acts which apply
  the National Electricity Law and Code as a law of their
  jurisdiction,
  and enacting a Commonwealth application Act.

In due course, the reforms will also bring gas regulation
under the two new statutory bodies, and make changes to
electricity retail regulation.

There are two Commonwealth Acts.

Trade Practices Amendment (Australian Energy Market) Act
2004

This Act amends the Trade Practices Act to establish the
Australian Energy Regulator as a body corporate with strong
organisational links to the Australian Competition and
Consumer Commission (ACCC). The Regulator will have one
Commonwealth member (also an ACCC Commissioner) and two
State/Territory members.

The Act also streamlines the process for changes to the
National Electricity Code. It allows the ACCC to rely on
consultations undertaken by the Australian Energy Market
Commission in the Code change process, when the ACCC does
certain things under Parts IIIA and VII of the Trade Practices
Act.

Australian Energy Market Act 2004

This is the Commonwealth application Act. It applies the
National Electricity Law, regulations and Code as Commonwealth
law in offshore adjacent areas. It also allows regulations
to prescribe further State or Territory energy laws to
be applied in the offshore areas.

The Acts are available at:

Australian Energy Market Act 2004

Trade Practices Amendment (Australian Energy Market) Act
2004

AGS was closely involved in advising the Department of
Industry, Tourism and Resources on formulating the Acts,
and continues to advise on energy reform. Cathy Reid and
Kenneth Eagle of AGS Melbourne are advising on commercial
aspects, while AGS Canberra are advising on statutory aspects.

For further information please contact:

Important: The material in Express law is
provided as an early, interim view for general information
only and further analysis on the matter may be prepared
by AGS. The material should not be relied upon for
the purpose of a particular matter. Please contact
AGS before any action or decision is taken on the basis
of any of the material in this message.