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Legislative Assembly

16 October 2019
Second reading
Lily D'Ambrosio  (ALP)


Ms D’AMBROSIO (Mill Park—Minister for Energy, Environment and Climate Change, Minister for Solar Homes) (10:27:08): I move: That this bill be now read a second time. I ask that my second-reading speech be incorporated into Hansard. Incorporated speech as follows: Safety and community are at the heart of the Energy Safety Legislation Amendment (Victorian Energy Safety Commission and Other Matters) Bill 2019, before you today. In 2017, I started the transformation of Victoria’s gas and electricity network safety by commissioning a review of the State’s safety framework. The Review found a number of areas for improvement that the Government supported, including strengthening the governance of Energy Safe Victoria, and broadening its capabilities and preparedness to take strong regulatory action. We need the utmost vigilance when it comes to energy safety and keeping our communities out of harm’s way. This is why this Bill is so important, and the changes it introduces will have long term benefits to the safety of Victorians. This Bill has two key elements, along with some housekeeping amendments. The first element is amending the Energy Safe Victoria Act 2005 to reform the governance of Energy Safe Victoria, or ESV, the state’s technical and safety regulator responsible for the safe generation, supply and use of electricity, gas and pipelines. This Bill proposes strengthening ESV’s regulatory decision-making and transforming it into an effective, modern safety regulator for electricity and gas by establishing it as a three-member commission supported by a Chief Executive Officer and a Technical Advisory Committee, with a Ministerial power of direction. The very important work ESV does includes licensing electricians, ensuring electrical and gas products are approved and safe for use, regulating the prevention and mitigation of bushfires caused by electric lines and investigating electrical and gas incidents. ESV employs around 150 staff and is funded through industry levies and other licensing fees. Since 2005, ESV has been established as a single member statutory office, with the Director of Energy Safety the sole regulatory decision maker, employer, and with the functions of the CEO. The proposed governance arrangements stem from a detailed review into gas and electricity safety, that I commissioned in January 2017. As it had been over a decade since the current energy network safety framework was put in place, the Independent Review of Victoria’s Electricity and Gas Network Safety Framework, conducted by Dr Paul Grimes, examined Victoria’s energy safety arrangements and made recommendations to ensure that the future needs of the Victorian community are reflected. The Grimes Review’s final report followed detailed analysis and public consultation with a wide range of industry stakeholders, consumer groups and other interested parties and its recommendations were designed to position Victoria at the forefront of safety regulation of electricity and gas networks. The review found that while Victoria has many of the key elements of a leading network safety framework, there were also areas for improvement, including strengthening the governance of ESV and broadening its capabilities and preparedness to take strong regulatory action. Importantly, changes to ESV’s structure, and its establishment as a Commission, which I will outline in detail shortly, will assist in the implementation of many of the other reforms supported in the Government Response to the Grimes Review, including: • strengthening ESV’s internal management systems and processes; • enhancing its auditing and inspection regime; • implementing an improved data analytics and management process; • providing a broader suite of compliance and enforcement tools; and • increasing penalties for non-compliance. The establishment of a three-person Commission, supported by a separate Chief Executive Officer and a Technical Advisory Committee, will ensure it accesses a broader range of perspectives and experience in decision-making, a need identified in the Grimes Review. Collectively, commissioners are to have skills, qualifications, knowledge or experience in law, economics, regulation and community safety. The inclusion of community safety in the commissioners’ skill set reflects the need to focus on and consider communities in the energy safety decision-making process. The Commission will be responsible for regulatory decisions. One Commissioner will be appointed as Chairperson, one as Deputy Chairperson and there will be one additional Commissioner. Each Commissioner will hold office for a term of up to five years, and is not eligible to be appointed for more than two terms. Commissioners may be appointed on a full-time or part-time basis. The role of Chief Executive Officer supporting the Commission will involve responsibility for the day-to-day management and administration of ESV’s affairs. This governance structure reflects current best practice and is consistent with the way in which other, modern regulators are set up, including the Environment Protection Authority Victoria and WorkSafe Victoria. In its current form, ESV’s Director of Energy Safety has emergency powers of direction to make an emergency situation safe, which are set out in the Electricity Safety Act 1998 and the Gas Safety Act 1997. These include powers to direct the disconnection of the supply of gas or electricity; stop the use of gas or electrical equipment; or stop a work practice. With the establishment of the Commission these emergency powers will be vested in the Chairperson, who may then delegate the powers to another commissioner, the CEO or employee of ESV, following Ministerial consent. The Bill also proposes the establishment of a Technical Advisory Committee to ensure ESV accesses a range of views and experience from outside the organisation on a broad range of regulatory safety matters. The Committee is to include those who represent the electricity and gas industries, employees in those industries, as well as members of the community. As Minister, I would appoint the members of the Committee. If the Bill is passed, the Department of Environment, Land, Water and Planning will consult on the committee’s Terms of Reference with key stakeholders, and this will determine the committee’s membership, scope and operation, including public reporting. Another important element of the Bill that strengthens the Government’s ability to ensure the safety of the community is through Ministerial powers to direct ESV in the performance of its functions and objectives; and recommend a commissioner for removal. This differs to the current Act, whereby the responsible Minister has limited powers to set expectations of ESV’s performance and strategic direction, and to commission advice and inquiries into certain matters. Ministerial powers of direction will enable greater oversight of ESV, to ensure the safety of Victorian community. The greater ministerial oversight in the Bill includes provisions for the responsible Minister to issue directions regarding ESV’s performance of its functions, meeting of its obligations and exercise of its powers. However, to ensure ESV’s independence is maintained, increased Ministerial power will be complemented by other measures, including limitations on Ministerial powers of direction and transparency requirements if powers are exercised, which include publication of any direction on ESV’s website and Annual Report; and appointment and removal of commissioners by the Governor in Council. Importantly, the proposed amendments bring ESV’s arrangements into alignment with a range of similar regulators. The second key element of this Bill is the establishment of an electrical lineworker licensing scheme, which if the Bill is passed, will commence on 1 January 2021. This is an election commitment made by the Government that I am proud to be delivering. Electrical lineworkers are employed or contracted by network businesses for the construction and maintenance of electricity network infrastructure. They work in a hazardous environment on high and low voltage electrical infrastructure and can work in the vicinity of live overhead wires. This includes: • work undertaken on the transmission system on high voltage electricity infrastructure, including electricity terminal stations, transmission lines and towers, and transporting electricity from generators to distribution networks. • work undertaken on the distribution system on low voltage electrical infrastructure, including powerlines, electrical substations, transformers, power poles, and transporting electricity through distribution networks to properties. Currently, Energy Safe Victoria oversees the registration of electrical lineworkers, however following registration, it is the employing distribution businesses who manage them. There is no registration renewal requirement, meaning lineworkers remain registered whether they continue to work in the industry or not. Progressing from a registration system to a licensing system will improve safety outcomes by enhancing ESV’s oversight of the electricity networks through better accountability and visibility of the workforce and mandating the minimum qualifications, training and experience electrical lineworkers require. Improved workforce data will enable ESV to better analyse potential trends or emerging safety risks in relation to the workforce, and will improve professional standards through mandating the minimum qualifications, training and experience required to work on the electricity networks. There are over 4,000 registered lineworkers who require licensing, as well as approximately 210 apprentices currently undertaking relevant qualifications over the next three years. This Bill makes minor amendments to the Electricity Safety Act 1998 to enable the establishment of the scheme in regulations. If the Bill is passed, the re-making of the regulations in 2020 will involve comprehensive stakeholder consultation on the licensing scheme’s design, including the minimum requirements for qualifications, training and experience required to obtain a licence, the scope of work, transitional arrangements, mutual recognition and the licence funding model. The Government committed $2.511 million as part of the 2019–20 State Budget to establish the scheme. This funding allows the first round of licensing to be provided at no cost. In closing, I would like to come back to the topic of communities. Recent coronial inquests, electricity network-caused fires and examples of non-compliant asset and vegetation management practices of regulated entities have reinforced the need to strengthen energy safety governance and regulatory effectiveness. The proposed reforms seek to reduce the likelihood of such incidents in future. The establishment of ESV as a commission will further enable it to have the right systems, processes and capabilities in place to do its job efficiently and effectively and hold distribution businesses to account. The establishment of an electrical lineworker licensing scheme will further enhance ESV’s oversight of industry. I have assured the community that their safety is the highest priority of this Government, and I will continue to focus my efforts and those of my Department on addressing their concerns. The introduction, and I trust, the passage, of this Bill shows that we are unwavering in our commitment to delivering a safer Victoria. I commend the Bill to the house.