Hansard debates

Ms D'AMBROSIO (Minister for Energy, Environment and Climate Change) — I move:

That this bill be now read a second time.

Speech as follows incorporated into Hansard under standing orders:

The Energy Legislation Amendment (Feed-in Tariffs and Improving Safety and Markets) Bill 2016 is an important measure that will make various improvements to energy legislation, chiefly by allowing multiple renewable energy feed-in tariffs to account for environmental and social costs and by allowing multiple rates to be determined, by applying in Victoria certain provisions governing national energy markets and by enhancing the safety of Victorian consumers of electricity and gas.

In relation to enhanced safety outcomes, the bill will clarify and strengthen Energy Safe Victoria's recall powers in relation to unsafe electrical and gas products. It will also clarify that the director of Energy Safety can issue emergency directions for safety reasons related to bushfire mitigation.

Energy Safe Victoria is Victoria's energy technical regulator responsible for electricity, gas and pipeline safety throughout the state. Energy Safe Victoria has powers under the Electricity Safety Act 1998 and Gas Safety Act 1997 to take steps to protect the safety of Victorians, including through the issue of mandatory recalls of electrical equipment and gas products. In addition, the director of Energy Safety has powers under the Electricity Safety Act 1998 to issue directions to energy industry participants if he or she considers that it is necessary to do so for safety reasons.

The bill will make amendments to both the Electricity Safety Act 1998 and Gas Safety Act 1997 to ensure Energy Safe Victoria's powers to recall unsafe electrical or gas products can be applied to all persons who supplied the unsafe product. The amendments will also ensure equipment that does not comply with minimum safety standards can be recalled by Energy Safe Victoria. The amended provisions will apply to suppliers whether or not they are still in the business of supply or sale of such products.

While the majority of suppliers are prepared to work with regulators when safety issues are identified, these proposed amendments will enable Energy Safe Victoria to take action against suppliers who do not comply voluntarily.

The proposed amendment to section 141 of the Electricity Safety Act 1998 will make explicit the power of the director of Energy Safety to issue a direction for 'safety reasons' including with respect to the prevention or mitigation of bushfires arising from incidents involving electric lines or electric installations. The amendment will ensure section 141 cannot be read narrowly to exclude safety risks related to bushfires.

In relation to feed-in tariffs, the bill will amend the Electricity Industry Act 2000 to allow the Essential Services Commission to determine a single rate or multiple rates for purchases of small renewable energy generation electricity. Currently the act does not permit the commission to determine more than one minimum feed-in tariff rate, which limits the commission's ability to consider the additional value that may arise based on variables such as the time of electricity generation (for example, by providing an incentivised rate when demand is high). This change will allow the commission to set rates that better reflect demand, which would achieve more efficient outcomes and reduce expenditure on network assets, which are funded by all customers.

The bill will also allow the commission, in determining the rates for purchases of small renewable energy generation electricity, to have regard to the environmental and social value of small renewable energy generation electricity. The bill will allow the government to specify the methodology that the commission is to apply when determining these additional factors.

The bill will amend the Electricity Industry Act 2000 to allow the commission to maintain a register of entities that are exempt from the obligation to hold a licence to generate, distribute, transmit, sell or supply electricity.

Currently, entities supplying or selling electricity in 'embedded networks' (typically found in apartment buildings, caravan parks and retirement villages) are deemed to be exempt from the requirement to hold an electricity industry licence by way of order in council (called the 'general exemption order'). It is for a business to self-assess whether it falls under the exemption. No notification to the Essential Services Commission is required. This means that there is no ability for the commission to monitor the number of businesses operating under the exemption.

The bill will allow exemptions from the requirement to hold an electricity industry licence to be issued subject to a condition that the exempt person is on the register maintained by the commission, effectively requiring a person to 'opt in' to an exemption. The Essential Services Commission will also be empowered to maintain a public register of persons that are exempt from the requirement to hold an electricity industry licence under a registrable exemption.

Additionally, the bill will make amendments to allow generators who are exempt from the requirement to hold a licence to generate electricity to access a benefit that is available to licensed generation companies. Section 94 of the Electricity Industry Act 2000 allows licensed generation companies to elect to receive and make payments instead of paying council rates in respect of land used for generation functions. This 'payment in lieu of rates' arrangement benefits generators by allowing them to enter into agreements with councils to pay less than the full rates. The proposed amendments will extend this arrangement to persons who are exempt from the requirement to hold a generation licence.

The bill will amend the National Electricity (Victoria) Act 2005 and the National Gas (Victoria) Act 2008 to apply certain provisions of the National Electricity Law and National Gas Law that are relevant to the operation of wholesale electricity and gas markets, electricity networks and gas pipelines.

These amendments will apply certain provisions that have been applied in other participating jurisdictions in the national energy markets, and will ensure that Victorian laws are consistent with those of other participating jurisdictions.

The amendments will introduce a conduct provision regime into the National Electricity Law, which mirrors the existing conduct provision regime in the National Gas Law. This regime will enable persons regulated under the National Electricity Law to take direct action against another party who is in breach of its electricity market obligations under the National Electricity Law, where appropriate. Currently only the Australian Energy Regulator — the national regulator of the energy sector — can take such action.

The bill will also establish a power for the Australian Energy Regulator to accept enforceable undertakings from energy market participants, similar to the power which the Australian Competition and Consumer Commission has under the Competition and Consumer Act 2010 (cth) and which the Essential Services Commission has under the Essential Services Commission Act 2001.

Additionally, the bill will streamline and harmonise reporting and information management arrangements under the National Electricity Law and National Gas Law. For example, the provisions provide for the preparation of a single report by the Australian Energy Regulator where similar reports are required to be prepared under both the National Electricity Law and the National Gas Law, and for the use of information obtained by the Australian Energy Regulator under one Law for a purpose connected with the performance or exercise of its functions and powers under the other.

Some provisions of the Corporations Act 2001 (Cth) will also be displaced, to ensure the primacy of energy company obligations under national energy rules, in the event of the financial failure of an energy retailer. There will also be other minor and consequential amendments to the National Electricity Law and the National Gas Law, for example, to bring consistency to the terminology used under both the National Electricity Law and the National Gas Law.

Lastly, the bill will make minor amendments to the Victorian Energy Efficiency Target Act 2007 to allow the minister to fix fees for the purposes of regulations made under that act, and to update certain references to reflect the new structure of commonwealth agencies that the commission may disclose information to. These amendments will enhance the commission's ability to administer the scheme, which is a certificate-based scheme designed to incentivise the installation of energy efficient products.

I commend the bill to the house.

Debate adjourned on motion of Mr CLARK (Box Hill).

Debate adjourned until Wednesday, 9 November.