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.
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:
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:
Robert Orr QC
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.