Bills Digest no. 111 2008–09
Australian Energy Market Amendment (AEMO and Other Measures) Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced: 12 February 2009
House: House of Representatives
Portfolio: Resources, Energy and Tourism
Commencement: Sections 1 to 3 on the day of Royal Assent; Schedule 1,
items 1-6, 12 and 14 on the day after Royal Assent; Schedule 1, items 7 to 11
and item 12, on a single day to be fixed by proclamation or if any of the
provisions do not commence within 6 months from the day or Royal Assent, then
they commence the first day after that period.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
The Bill proposes
minor consequential amendments to relevant Commonwealth legislation in line
with the implementation of co-operative energy reform legislation being passed
in other jurisdictions.
The optimal functioning of Australia’s energy supply system
has a vital role to play in the sustainable development of the Australia’s
economy and the improvement of community living standards.
At a meeting of the Council of Australian Governments (COAG)
on 13 April 2007, COAG agreed to establish a single, industry-funded national
energy market operator to be called the Australian Energy Market Operator (AEMO).
It was envisaged that the AEMO, governed by an independent
skills-based board, and subject to more robust accountability provisions, would
combine administration of the National Electricity Market (NEM), a new NEM
transmission planning function, and new gas market development functions. This
represented another step in the evolution of Australia’s energy market,
designed to enhance the national character and operational consistency of
energy market governance.[1]
It was also decided that the Ministerial Council on Energy (MCE)[2] would be responsible for the implementation of this initiative.
AEMO is due to commence its
operations on 1 July 2009.
It is stated that:
All current functions carried out by NEMMCO[3] will be retained, including an expanded [national] transmission planning role
[…]. Furthermore, AEMO will include functions carried out by VENCorp
(Victoria), Gas Market Company (NSW) and REMCo (SA), and new gas functions - a
gas bulletin board and short-term trading market.
AEMO will be run by a
skills-based board comprising nine non-Executive Directors and a CEO. The
skillset for the board will include finance, legal, economics/public policy, IT
and energy sector knowledge (operations and development).[4]
The
Explanatory Memorandum states that there is no financial impact.[5]
Western Australia will soon become a participant in the
national framework for regulating access to gas pipeline services. In 2008, a
Bill aimed at applying the ‘National Gas Access Law’ was introduced into the
Western Australian Parliament. However, the Parliament was prorogued prior to
the Bill being passed. The legislation applying the National Gas Access Law is
now expected to commence in the first half of 2009 (the WA Application Act).
The delay has been accompanied by a change in the title of the legislation.
Hence, the relevant amendments referred to below, reflect this date and name
change.
Schedule 3 of this Act deals with State, Australian Capital
Territory and Northern Territory Acts, and parts of such Acts, that are enactments
for the purposes of the Act.[6] Item 1 proposes an amendment to paragraph 2(dab) of Schedule 3 of the Act to reflect a change of name in the Western Australian gas
legislation. “(Western Australia) Act 2008” is omitted and replaced with “(WA)
Act 2009”.
Items 2, 3, 4, 5 and 6 propose amendments to section
3, subsections 11J(1) and (2); section 11K; paragraph
11R(2)(a); subsection 11R(3) of this Act. These amendments reflect a
change in name and date of Western Australian gas legislation. “(Western
Australia) Act 2008” is omitted and replaced with “(WA) Act 2009”.
Item 8 repeals the definition of NEMMCO in subsection
5(1) -the definitions section of this Act. Hence, reference will no longer
be made to NEMMCO. Rather, item 9 proposes the insertion of a new
definition in subsection 5(1): AEMO would have the same meaning
as in the National Electricity Law set out in the Schedule to the National
Electricity (South Australia) Act 1996 of South Australia.
Items 9, 10 and 11 also propose to replace
references to NEMMCO in the Act with a reference to AEMO.
Item 12 proposes to amend subsection 4(1) of
the Act, correcting the reference to the WA Application Act, as proposed in items
1 to 6.
Item 13 replaces a reference to NEMMCO in the Act
with a reference to AEMO.
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2404.
[3]. “The
National Electricity Market Management Company (NEMMCO) is the market operator
of the National Electricity Market and the system operator of the national
grid.
NEMMCO was established
in 1996 to administer and manage the NEM, develop the market and continually
improve its efficiency. The governments of Queensland, New South Wales, the
Australian Capital Territory, Victoria, South Australia and Tasmania are
members of NEMMCO. Each of these governments nominates a director to the NEMMCO
board.”
Directly
sourced from: NEMMCO Corporate Information, at: http://www.nemmco.com.au/corpinfo/corporate_information.html,
accessed on 19 February 2009.
Juli Tomaras
11 March 2009
Bills Digest Service
Parliamentary Library
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