Electricity Industry Bill

Transcription

1 ARTHUR ROBINSOf\l & HEDDERWICKS UBFIARY Electricity Industry Bill EXPLANATORY MEMORANDUM The Bill provides for the restructuring of the electricity supply industry and the amendment of the State Electricity Commission Act Restructuring is achieved by establishing three new electricity corporations (Part 2) and vesting generation, transmission and distribution functions in each respectively. The Bill makes provision for the transfer of property from the State Electricity Commission ("SEC") to the electricity corporations (part 5, Divisions 1 and 2) and for the employment of former SEC staff by the electricity corporations (Part 6). Liabilities, other than financial obligations, are also to be transferred in accordance with the procedure prescribed in Part 5, Divisions 1 and 2. There is provision for the transfer of some of the financial obligations of the SEC (clauses 29 and 71) and for the assumption of other financial responsibilities of the SEC by the electricity corporations (clauses 77 and 78). SEC remains in existence but the commissioners are replaced by an administrator appointed under this Bill (Part 4, Division 1). The Bill also provides for the appointment of a chief electrical inspector (Part 4, Division 2) who assumes various technical regulatory functions previously exercised by the SEC under the State Electricity Commission Act 1958 and the Electric Light and Power Act The co-ordination of the electricity system is the responsibility of National Electricity which is one of the electricity corporations. Clause 1 sets out the purpose of the Act. PART I-PRELIMINARY Clause 2 provides for the commencement of the Act. Clause 3 sets out the definitions for the Act. Clause 4 sets out the method of determining whether a body corporate is a subsidiary of an electricity corporation. Clause 5 provides that the Act binds the Crown. Clause 6 determines the extraterritorial operation of the Act. PART 2-THE ELECTRICITY CORPORATIONS This part provides for the establishment of the three electricity corporations which will be responsible for the generation, transmission and distribution of electricity. Further provisions dealing with the Board of each electricity corporation, the Chief Executive Officer, procedural matters and the power to delegate are contained in Schedule 1. Division I-Generation Victoria Clause 7 provides for the establishment of Generation Victoria. Clause 8 provides that Generation Victoria is a public authority which represents the Crown. Clause 9 sets out the functions and powers of Generation Victoria. 1-2-[177]-700/ (Rev. No. 1) (921) 1

2 Clause 10 provides that Schedule 1 of the Act applies to Generation Victoria. Clause 11 establishes the application of the Mineral Resources Development Act 1990 to Generation Victoria within the Latrobe area. Clause 12 requires the levying of a brown coal levy on Generation Victoria. Division 2-National Electricity Clause 13 establishes National Electricity. Clause 14 provides that National Electricity is a public authority which represents the Crown. Clause 15 sets out the functions and powers of National Electricity. Clause 16 provides that Schedule 1 applies to National Electricity. Clause 17 provides for the control of -the electricity supply system to ensure its reliability, security, the maintenance of voltage and public safety. The responsibility is given to National Electricity which controls the system by giving directions to an undertaker or any other person. Clause 18 provides for the broader technical regulation of the electricity supply system by the prescription of procedures which are required to be implemented by National Electricity. Clause 19 deals with compensation to a person who suffers detriment as a result of complying with a direction under Qause 18. Clause 19 does not give an entitlement to compensation but provides for the making of regulations dealing with the circumstances in which compensation is.payable, the calculation of compensation and the determination of who is liable to pay the compensation. Division 3-Electricity Services Victoria Clause 20 establishes Electricity Services Victoria. Clause 21 provides that Electricity Services Victoria is a public authority which represents the Crown. Clause 22 provides that Schedule 1 applies to Electricity Services Victoria. Clause 23 sets out the functions and powers of Electricity Services Victoria. Clause 24 sets out the mechanism for determining tariffs and conditions of supply by Electricity Services Victoria. This clause also restricts the ability of Electricity Services Victoria to disconnect supply for failure to pay an account. Clause 25 empowers Electricity Services Victoria t<r- (a) carry on the business of trading in electrical apparatus; (b) deal with service lines, electrical wiring or electrical httings; (c) advance money in connection with the purchase or hiring of electrical apparatus and services in relation to electrical apparatus, services lines, electrical wiring and electrical fittings. 2

3 Division 4-General Provisions Applying to Electricity Corporations Clause 26 provides that an electricity corporation is subject to the direction and control of the Minister and Treasurer. Clause 27 provides that it is not compulsory for an electricity corporation to supply electricity. This clause also limits the liability of electricity corporations for failure to supply electricity. Division 5-Financial Clause 28 provides that an electricity corporation may obtain financial accommodation and invest money in accordance with the Borrowing and Investment Powers Act Clause 29 provides for payments to be made where there is an order made under Section 360 (1) or 36E (1) of the Treasury Corporation of Victoria Act Division 6-General This Division imposes a number of obligations on electricity corporations and their directors which are similar to those imposed on State Business Corporations by the State Owned Enterprises Act 1992 ("SOE Act"). Clause 30 sets out the duties of directors of electricity corporations (cf Section 36 SOE Act). Clause 31 provides that the Minister may bring an action against a director who breaches the duties set out in clause 30 (cf Section 37 SOE Act). Clause 32 prohibits an electricity corporation from making a loan to one or more of its directors (cf Section 38 SOE Act). Clause 33 prohibits an electricity corporation from exempting or indemnifying a director from liabilities that would otherwise attach to the director in relation to misdeeds in connection with that corporation (cf Section 39 SOE Act). Clause 34 requires the preparation of estimates of receipts and expenditure by each electricity corporation and limits the expenditure of money by electricity corporations (cf Section 82 State Electricity Commission Act 1958). Clause 35 requires the boards of the electricity corporations to prepare a corporate plan each year (including a statement of corporate intent) for submission to the Minister and the Treasurer. This clause also provides for consultation between the Treasurer and the Minister in relation to the corporate plan (cfsection 41 SOE Act). Clause 36 prescribes the content of statements of corporate intent (cf Section 42 SOE Act). Clause 37 authorises the Minister, with the approval of the Treasurer, to direct an electricity corporation to perform non-commercial functions and makes provision for the payment of financial compensation (cf Section 45 SOE Act). Clause 38 requires electricity corporations to pay dividends to the State (cf Section 49 SOEAct). 3

4 Clause 39 requires the keeping of accounts and records by electricity corporations. This clause also requires the board of an electricity corporation to perform certain tasks related to the revenues, expenses, assets and liabilities of the electricity corporation (cf Section 56 SOE Act). Clause 40 requires electricity corporations to prepare an annual report and submit the annual report to the Minister. This clause also sets out the content requirements for the annual report (cf Section 57 SOE Act). Clause 41 requires that the financial statements of electricity corporations be audited by the Auditor General (cf Section 58 SOE Act). PART 3-PROPERTY AND WORKS Clause 42 empowers electricity corporations to acquire land. Clause 43 deems certain easements to be appurtenant to land held by electricity corporations. Clause 44 provides that electricity corporations may require certain easements in subdivisions and consolidations of land. Clause 45 deals with easements over lands held by Crown licensees or lessees. Clause 46 provides that certain property will not be rateable under the Local Government Act Clause 47 vests certain powers in electricity corporations in relation to works such as bores and surveys, the conduction of electricity, the erection of works and the diversion of water. PART 4-THE ADMINISTRATOR AND CHIEF ELECTRICAL INSPECTOR Division 1-The Administrator Clause 48 provides for the appointment of an Administrator. Clause 49 prescribes the circumstances in which the office of the Administrator becomes vacant. Clause 50 enables the Administrator to engage staff. Clause 51 sets out the functions and powers of the Administrator. Amendments to the State Electricity Commission Act 1958, effected in Part 9 of this Bill, provide for the SEC to col}sist of the Administrator. The Administrator is also given the responsibility, by this Bill, of certifying the allocation of SEC property amongst the electricity corporations (clause 63) and of certifying which electricity corporation employs particular staff members formerly employed by the SEC (clause 82 (5». Clause 52 enables the Administrator to delegate his or her powers to a person approved by the Minister, other than the power of delegation. Clause 53 provides that the Administrator is subject to the direction and control and the Treasurer and the Minister. 4

5 Clause 54 empowers the Administrator, after consultation with the electricity corporations, to make rules with respect to trading in electricity between electricity corporations, the SEC and proclaimed bodies. Division 2-Chief Electrical Inspector Clause 55 provides for the appointment of a chief electrical inspector. Clause 56 prescribes the circumstances where the office of chief electrical inspector becomes vacant. Clause 57authorises the chief electrical inspector to engage officers and employees. Clause 58 empowers the chief electrical inspector to delegate to a person approved by the Minister any function or power. Clause 59 sets out the functions and powers of the chief electrical inspector. Many of the functions and powers are conferred by amendment of the State Electricity Commission Act 1958 (Part 9 of this Bill) and the Electric Light and Power Act 1958 (Part 10 of this Bill). Clause 60 prescribes a procedure whereby the electricity corporations become responsible for paying the remuneration, costs and expenses of the chief electrical officer. Clause 61 confers immunity on the chief electrical inspector in the carrying out of the functions or powers of the chief electrical inspector. PART S-TRANSFER OF PROPERTY OF SEC This Part provides for the transfer of SEC property to electricity corporations. Certain property is excluded and is not subject to transfer. Excluded property includes agreements, contracts and documents referred to in Schedule 3 which include the Portland and Point Henry Smelters and the Loy Yang B agreements and the agreements within the meaning of the Snowy Mountains Hydro-electrics Agreements Act This Part also provides for the transfer of liabilities (other than financial obligations). This is done by the preparation of an allocation statement (Clause 62). On the appointed day the property allocated to an electricity corporation vests in that corporation and liabilities allocated to an electricity corporation become liabilities of that corporation (Clause 64). Similar provision is made in relation to the transfer of property and allocation of liabilities to a SEC company (Qause 65) and the State (Clause 66). The allocation of financial obligations is effected pursuant to Clauses 29 and 77. Provision is made, by way of an interim arrangement, for an electricity corporation to exercise rights in relation to SEC property which is transferred to another electricity corporation (Clause 79). Division I-Allocation of Property Clause 62 requires the SEC to prepare a statement allocating the property of SEC between the electricity corporations, certain companies related to SEC, the State and SEC. Clause 63 provides for the issuing of a certificate by the Administrator as conclusive evidence of allocation of the property of SEC. 5

6 Division 2-Transfer of Property Clause 64 provides for the transfer of assets and liabilities to electricity corporations on the appointed day. Clause 65 provides for the transfer of assets and liabilities to SEC companies on the appointed day. Clause 66 provides for the transfer of property and liabilities to the State on the appointed day. Clause 67 provides that an electricity corporation which is allocated property that is subject to an encumbrance becomes responsible for the encumbrance. Clause 68 declares that the value of transferred property on the appointed day is the value shown in the relevant allocation statement. Clause 69 provides for the substitution of an electricity corporation or SEC company in place of the SEC under an agreement which is subject to an allocation. Clause 70 provides for the continuing effect of SEC instruments relating to transferred property. Clause 71 provides for the continuation of proceedings relating to transferred property to which SEC was a party. Clause 72 provides for the transfer of interests in land. Clause 73 empowers the Administrator to require the amendment of the Register by the Registrar of Titles. Clause 74 exempts acts and transactions under the Act from stamp duty and other taxes. Clause 75 sets out the admissibility of evidence in relation to transfer of property. Clause 76 provides that the Act, and things done under the Act will not constitute a civil wrong, a breach or a default, terminate agreements or obligations or release any surety. This clause also prohibits acts or transactions of SEC or the Administrator from being called in question for non-compliance with this Act or the State Electricity Commission Act Division 3-Financial Obligations of SEC Clause 77 requires SEC to give the Treasurer a statement of its financial obligations and enables the amendment of an allocation statement of financial obligations. Clause 78 requires each electricity corporation pay to SEC such amounts as SEC is liable to pay in respect of financial obligations for which the electricity corporation is responsible pursuant to Clause 77. 6

7 Division 4-Rigbts as between Transferees Clause 79 provides for transferees of SEC property to exercise certain rights and privileges in SEC property transferred to other transferees for a period of nine months unless extended by the Minister. PART &-STAFF Clause 80 sets out definitions to apply in Part 6. Clause 81 requires SEC to prepare a list of SEC staff identifying which body will employ each staff member on the appointed day. Clause 82 sets out the effects of the transfer of SEC staff including employment on the same terms and conditions as enjoyed immediately before the appointed day and retention of accrued entitlement to benefits. The clause also provides that a transferred employee is not to receive any payment or other benefit by reason only by having ceased to be an employee of SEC. Clause 83 sets out the effect of the transfer on the future terms and conditions of employment of transferred employees. Clause 84 provides for the continuation of the SEC Superannuation Fund and for the making of rules to extend its application to an electricity corporation, SEC company and other bodies specified by the Minister and employees of such corporations, companies and bodies. PART 7-GENERAL Clause 85 enables the Minister or Treasurer to delegate their powers under this Act. Clause 86 empowers, but does not require, the Treasurer to guarantee a financial accommodation provided to an electricity corporation. Clause 87 provides that regulations may provide for authorisation of acts or things for the purposes of Part IV of the Trade Practices Act 1974 (Cth). Clause 88 enables the Governor in Council to make regulations relating to the Act. PART 8-TRANSITIONAL Clause 89 provides for Electricity Services Victoria to succeed the State body set up under the State Owned Enterprises Act 1992 known as Electricity Services Victoria. Clause 90 provides for Generation Victoria to succeed the State body set up under the State Owned Enterprises Act 1992 known as Generation Victoria. Clause 91 provides for National Electricity to succeed the State body set up under the State Owned Enterprises Act 1992 as National Electricity. PART 9-AMENDMENT OF STATE ELECTRICITY COMMISSION ACT 1958 Clause 92 defines the State Electricity Commission Act 1958 ("SEC Act") as the Principal Act in Part 9. 7

8 Clause 93 amends the definitions in Section 3 of the SEC Act. Clause 94 inserts a new Section 3A in the SEC Act empowering the Minister to delegate his functions and powers under the SEC Act. Clause 95 provides for the Commission to consist of the Administrator and provides for certain amendments. Clause 96 inserts a new Section 26A in the SEC Act. Clause 97 provides for further amendments of the SEC Act. Clause 98 provides for the amendment of Section 51 of the SEC Act. Clause 99 provides for further amendments relating to the SEC Act. Clause 100 provides for the amendment of Sections 56 and 57 of the SEC Act. Clause 101 provides for amendments to Part VI of the SEC Act. Clause 102 provides for the amendment of Sections 63, 64 and 65 of the SEC Act. Clause 103 provides for the amendmen~ of Parts VIA ano VII of the SEC Act. Clause 104 inserts new provisions in the SEC Act. Section 85B empowers the Treasurer, at the request of SEC, to guarantee, indemnify or otherwise support the performance, satisfaction or discharge of obligations or liabilities of SEC and appropriates the Consolidated Fund for this purpose. Clause 105 inserts a new Section 101 into the SEC Act. Clause 106 amends Parts 8 VIII and IX of the SEC Act. Clause 107 provides for the amendment of the schedules to the SEC ACT. PART 10-AMENDMENT OF ELECTRICAL UGHT AND POWER ACT 1958 Clause 108 defines the Electric Light and Power Act 1958 ("ELP Act") as the Principal Act for the purposes of Part 10. Clause 109 amends certain definitions in the ELP Act. Clause 110 inserts a new Section 3A in the ELP Act empowering the Minister to delegate his functions and powers under the ELP Act. Clause 111 amends the ELP Act. Clause 112 substitutes a new Section 61 in the ELP Act requiring the chief electrical inspector to give the Minister an annual report. PART ll-consequential AMENDMENT OF omer ACTS Clause 113 amends the Borrowing and Investment Powers Act Clause 114 amends the Public Authorities (Dividends) Act Clause 115 provides that the Acts specified in Schedule 4 will be amended as specified in Schedule 4. 8

9 SCHEDULEl Provisions Applying to the Electricity Corporations This Schedule prescribes provisions which apply to the electricity corporations. Paragraph 1 sets out the powers of delegation of an electricity corporation. Paragraph 2 sets out the number of directors on the boards of electricity corporations. Paragraph 3 sets out the constitution of the board of electricity corporations. Paragraph 4 provides for the appointment of directors of electricity corporations. Paragraph 5 sets out the terms and conditions of appointment of directors of electricity corporation. Paragraph 6 provides for the appointment of a chief executive officer of an electricity corporation. Paragraph 7 provides for vacancies, resignations and removals of directors of boards of electricity corporations. Paragraph 8 provides for the validity of the acts or decisions of boards of electricity corporations. Paragraph 9 governs the proceedings of meeting of boards of directors of electricity corporations. Paragraph 10 provides for the passing of resolutions by the directors of an electricity corporation in the absence of a meeting. Paragraph 11 empowers the board of an electricity corporation to delegate its powers, other than the power of delegation. Paragraph 12 deals with the disclosure of interests by directors. SCHEDULE 2 Easements Set Apart for Electricity Corporations This schedule sets out the easements set apart or appropriated for the use of an electricity corporation. SCHEDULE 3 Excluded Property: Agreements, contracts, documents and other property referred to This schedule sets out agreements, contracts, documents and property that are exempted from the operation of the Act. 9

10 SCHEDULE 4 Consequential Amendments This Schedule sets out consequential amendments to other Acts. By Authority L. V. North, Government Printer Melbourne 10