7 July 2005
Commencement of new national electricity legislation
The new National Electricity Law, Rules and Regulations
commenced on 1 July 2005.
This legislation amends the cooperative
scheme for electricity which establishes a wholesale exchange
in the National Electricity Market and an open access regime
for transmission and distribution networks.
The old scheme
The old scheme for electricity market regulation
came into operation in December 1998.
- The lead legislation is the National Electricity
(South Australia) Act 1996 of South Australia.
- The old National Electricity Law (NEL) was a schedule
to that Act.
- The old National Electricity
Code was in force under the NEL, and provided the detail
of the regulatory regime.
- The NEL
was picked up and applied by Application Acts in each
of the other participating jurisdictions, namely New
South Wales, Victoria, Queensland, and the Australian
The new scheme
A new NEL, which commenced operation on
1 July 2005, replaces the old NEL. The new NEL has been
in this process. New
National Electricity Rules replace
the old Code, though the new Rules are in much the same
form as the old Code. The new NEL and Rules confer functions
on two new statutory bodies, the Australian Energy Market
Commission and the Australian Energy Regulator.
Energy Market Commission (AEMC)
- The AEMC is established by the Australian Energy
Market Commission Establishment Act 2004 of South Australia.
AEMC will be responsible for making and amending the
National Electricity Rules, taking over the role previously
exercised by the National Electricity Code Administrator.
- The inaugural Chair of the AEMC is Dr John Tamblyn
and the two other commissioners are Ms Liza Carver and
Australian Energy Regulator (AER)
- The AER is a Commonwealth
regulator established by amendments to the Trade
Practices Act 1974.
- The AER will take over the economic regulatory
functions previously exercised by the Australian Competition
Consumer Commission and the market rule enforcement
functions previously exercised by the National Electricity
Administrator, under the old NEL and Code.
- The inaugural Chair of the AER is
Mr Steve Edwell and the two other members are Mr Geoffrey
Swier and Mr Edward
Commonwealth will be a participating jurisdiction
for the first time, the Commonwealth will be a participating
jurisdiction in the National Electricity Market. The
Commonwealth will pick up and apply the new NEL, Rules
as laws of the Commonwealth in the offshore 'adjacent
areas'. Tasmania has also joined the scheme.
regulations for existing access undertakings
with these changes to national electricity legislation,
Energy Market Regulations 2005 have also been made under the Commonwealth Australian
Market Act 2004. These Regulations confirm the continued
operation of existing access undertakings given by electricity
network service providers under section 44ZZA of the
Trade Practices Act 1974.
More reforms to come
These reforms are part of broader
reforms being made to national energy regulation as set
out in the Council
Australian Governments' Australian Energy Market
Agreement 2004 (AEMA). In due course, the reforms will
also confer functions on the AER and AEMC in relation
to gas, and make changes to electricity retail regulation.
You can obtain a copy of the AEMA or further information
about energy reform (and subscribe to regulator email
on energy reform) at the Ministerial
Council on Energy website.
AGS was closely involved in advising the Department
of Industry, Tourism and Resources on formulating the
national electricity legislation, and continues to
advise on energy reform.
For further information please
Robert Orr QC
Deputy General Counsel
T 02 6253 7129 F 02 6253 7304
T 02 6276 1009 F 02 6276 7110
T 02 6253 7080 F 02 6253 7303
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