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Legislation Fact Sheet
National Energy Retail Law (Tasmania) (Consequential Amendments) Bill 2012
The National Energy Retail Law (Tasmania) (Consequential Amendments) Bill
2012 amends the Electricity National Scheme (Tasmania) Act 1999, the
Electricity Supply Industry Act 1995 and the Energy Ombudsman Act 1998
consequent on the enactment of the National Energy Retail Law (Tasmania) Bill
2012.
The National Energy Retail Law (Tasmania) Bill applies the National Energy
Retail Law (NERL) as law of Tasmania. The Bill also applies the National
Energy Retail Rules that are made under the NERL and any regulations in force
under the NERL as law of Tasmania, subject to certain modifications prescribed
in regulations under that Bill.
The NERL provides a national regime for the regulation of the distribution and
retailing of energy, except for matters relating to pricing. The Australian Energy
Regulator (AER) is the regulator under NERL and will be responsible for issuing
retailer authorisations to retailers selling, or intending to sell, electricity to
customers in Tasmania.
As a result of the adoption of the NERL in Tasmania, a number of consequential
amendments are required to ensure that Tasmania's electricity legislation is
consistent with the new national framework and to ensure that the current
market arrangements in Tasmania are maintained.
Under the NERL there are retailer authorisations, but not the licensing of
retailers, which is how the current Tasmanian regulatory framework operates.
Changes to the Electricity Supply Industry Act are required to ensure alignment
with the NERL in this regard. Consequential amendments are also required in
relation to Tasmania's retail contestability arrangements, and price regulation
for small customers, thereby maintaining existing policy settings.
While the NERL applies to both gas and electricity, the National Energy Retail
Law (Tasmania) Bill does not apply the NERL to the provision of natural gas in
Tasmania.
The most significant change is the transfer of the non-economic regulatory
functions of the Tasmanian Economic Regulator to the AER. This includes the
regulation of the contractual relationships between electricity distributors and
retailers, and between retailers and customers, and customer protection
measures. The AER will also be responsible for administering the retailer of last
resort scheme. Electricity price regulation for small customers remains a
jurisdictional responsibility and will continue to be regulated by the Tasmanian
Economic Regulator.
Currently the exclusivity for Aurora Energy as the only retailer authorised to sell
electricity to non-contestable customers on mainland Tasmania is also
established through licence conditions. As licensing functions are being
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transferred to the AER, it is necessary to include provisions in the Electricity
Supply Industry Act to provide that only Aurora Energy may sell electricity to
non-contestable customers on mainland Tasmania, consistent with the existing
structure of the Tasmanian market.
The current Tasmanian contestability thresholds are not changing. Non-
contestable customers are all residential customers and business customers
whose consumption of electricity is below 50 megawatt hours per annum.
In addition, the classification of contestable customers currently known as
standing offer contestable customers that consume between 50 and 150
megawatt hours of electricity per annum is being maintained and will be referred
to as small contestable customers. Under the NERL, these customers will
continue to have access to Aurora Energy's regulated tariff, as well as
benefiting from all of the NERL small customer protection measures, meaning
that they will have access to the full range of customer protection measures in
the NERL.
The Bill inserts a new Division 4 in Part 3 of the Electricity Supply Industry Act
to maintain some existing regulatory arrangements in the electricity supply
industry that would otherwise cease under the legislative package that applies
the NERL in Tasmania. This includes prescribing Aurora Energy, in its capacity
as a retailer, to be the only retailer authorised to sell electricity to non-
contestable customers on mainland Tasmania.
This Division also maintains the existing tariff approval processes under which
the Tasmanian Economic Regulator is required to approve Aurora Energy's
prices and charges.
The Bill inserts a new provision that provides that only Aurora Energy, in its
capacity as a retailer of electricity, may sell unmetered electricity. Unmetered
electricity is predominately supplied for street lighting.
The Australian Energy Market Operator has a market settlement process for
determining unmetered loads, with prices regulated by the Australian Energy
Regulator. The metrology and other processes to support contestability in
unmetered electricity supply are yet to be established in Tasmania. If they are
put in place, this exclusivity provision may not be required. The Bill therefore
provides that regulations prescribe the period in which only Aurora Energy can
sell unmetered electricity, and the class of persons to whom this exclusivity may
apply.
The Bill repeals the retailer of last resort scheme provisions in the Electricity
Supply Industry Act as a retailer of last resort scheme, to be administered by
the Australian Energy Regulator, is provided for under the NERL.
Provisions have also been included in the Bill to allow the Tasmanian Economic
Regulator to recover its reasonable costs associated with administering the tariff
approval process from Aurora Energy. Previously, the Tasmanian Economic
Regulator recovered such costs through licence fees. The Regulator is also
permitted to recover the reasonable costs associated with performing its
functions under the Act in respect of the regulation of non-contestable
customers.
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The new Division 4 also maintains the prohibition that prevents Hydro
Tasmania, or any of its subsidiaries, or related bodies corporate, from selling, or
offering to sell, electricity to a customer on mainland Tasmania.
In addition, the Bill amends the Electricity Supply Industry Act to require the
Tasmanian Economic Regulator to issue a licence to Hydro Tasmania for the
generation, distribution and retailing of electricity in the Bass Strait Islands.
These provisions are required to be explicitly drafted as the retailing provisions
of the Act are being repealed and because the NERL does not apply to the
Bass Strait Islands as the Islands are not connected to the National Electricity
System.
The Bill also prescribes the tariff approval process in respect of the prices,
charges and conditions that will apply to customers in the Bass Strait Islands,
as well as requiring Hydro Tasmania to perform system controller functions in
order to ensure a reliable supply of electricity to customers in the Bass Strait
Islands.
The provisions regulating the supply and sale of electricity to customers in the
Bass Strait Islands do not reflect any change in the existing arrangements
governing the regulation of electricity in the Islands.
The Bill also makes a number of consequential amendments to definitions used
in the Electricity Supply Industry Act and repeals definitions and provisions that
will be redundant following the application of the NERL in Tasmania.
This Bill inserts a new Part 4 in the ElectricityNational Scheme (Tasmania) Act
to ensure that any decisions or instruments made by the Australian Energy
Regulator under the National Electricity Law that relate to the NERL are taken
to be valid as they apply to the NERL in Tasmania.
The Bill also amends the Energy Ombudsman Act so that that Act will apply to
customers of authorised retailers as well as persons who are supplied electricity
from someone other than an authorised retailer, for example the owner of a
caravan park or shopping centre, defined as an exempt seller. The
amendments to the Energy Ombudsman Act will enable persons to make a
complaint to the Ombudsman if the person has a grievance concerning the sale
or supply of electricity from an authorised retailer or other exempt seller.