National Electricity (Victoria) Amendment Act 2020 (Vic)
National Electricity (Victoria) Amendment Act 2020
No. 10 of 2020
table of provisions
Section Page
1Purposes
2Commencement
3Definitions
4New Division 7 of Part 3 inserted
5Electricity Industry Act 2000—Definitions
6Electricity Industry Act 2000—Variation of licence
7Repeal of this Act
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Endnotes
1 General information
National Electricity (Victoria) Amendment Act 2020
No. 10 of 2020
[Assented to 24 March 2020]
The Parliament of Victoria enacts:
1Purposes
The purposes of this Act are—
(a)to amend the National Electricity (Victoria) Act 2005 to enable the Minister, by Order, to modify or disapply certain regulatory requirements that apply under the National Electricity (Victoria) Law and National Electricity Rules to—
(i)specified augmentations of the Victorian declared transmission system; or
(ii)services provided, or to be provided, in relation to or by means of specified augmentations; or
(iii)specified services provided, or to be provided, to a declared transmission system operator or AEMO for or with respect to the declared transmission system; and
(b)to make related amendments to the Electricity Industry Act 2000 to enable the Essential Services Commission to amend a licence issued under that Act to a person who is a declared transmission system operator in accordance with an Order made under Division 7 of Part 3 of the National Electricity (Victoria) Act 2005.
2Commencement
This Act comes into operation on the day after the day on which it receives the Royal Assent.
3Definitions
In section 3(1) of the National Electricity (Victoria) Act 2005 insert the following definition—
"Department means Department of Environment, Land, Water and Planning;".
4New Division 7 of Part 3 inserted
After Division 6 of Part 3 of the National Electricity (Victoria) Act 2005 insert—
'Division 7—Modification of regulatory arrangements for specified declared transmission system augmentations and related services
16WDefinitions and interpretation
(1)In this Division—
alternative regulatory investment test—see section 16Y(2)(d);
augmentation related costs means—
(a)costs of a specified augmentation; or
(b)costs incurred in the provision of, or in acquiring or utilising, specified augmentation services;
modify includes add, omit or substitute;
non-network services means services provided, or to be provided, to a declared transmission system operator or AEMO for or with respect to the declared transmission system;
non-network services costs means costs incurred in the provision of, or in acquiring or utilising specified non‑network services;
specified augmentation—see section 16Y(1)(a)(i);
specified augmentation services—see section 16Y(1)(a)(ii);
specified non-network services—see section 16Y(1)(a)(iii);
the Law means the National Electricity (Victoria) Law.
(2)Words and expressions used in this Division that are defined in Chapter 10 of the National Electricity Rules—
(a)have, subject to paragraph (b), the same meaning in this Division as they have under the Rules; and
(b)are to be read subject to any modifications made to those words or expressions under an Order under section 16Y.
(3)Subsection (2) does not apply to the extent that the context or subject matter otherwise indicates or requires.
16XAdditional AEMO functions
(1)For the purposes of section 50C(1)(f) of the Law, AEMO is conferred the following functions—
(a)to contract for augmentation related services or specified non-network services;
(b)to conduct competitive tenders in respect of augmentation related services and specified non-network services.
Note
See also section 49(1)(g) of the National Electricity (Victoria) Law.
(2)In addition—
(a)a function conferred on AEMO under an Order under section 16Y that is related to the declared transmission system, or electricity network services provided by means of or in connection with the declared transmission system, is taken to be conferred by this Act for the purposes of section 50C(1)(f) of the Law; and
Note
See also section 49(1)(g) of the National Electricity (Victoria) Law.
(b)a function conferred on AEMO under an Order under section 16Y (other than a function referred to in paragraph (a)), or a power conferred on AEMO under an Order under that section, is taken to be conferred on AEMO by this Act.
Note
See also section 49(1)(h) of the National Electricity (Victoria) Law.
16YOrder modifying regulatory arrangements relating to declared transmission system augmentations and related services
(1)Subject to this Division, the Minister, by Order published in the Government Gazette, may do any one or more of the following—
(a)specify, for the purposes of the Order—
(i)the carrying out of, or operation of, an augmentation of the declared transmission system as a specified augmentation;
(ii)services provided or to be provided in relation to or by means of a specified augmentation as specified augmentation services;
(iii)non-network services as specified non-network services;
(b)provide that Subdivision 3 of Division 2 of Part 5 of the Law, or a specified provision of that Subdivision, does not apply as a law in Victoria in respect of—
(i)a specified augmentation;
(ii)specified augmentation services;
(c)modify the application of a specified provision of Subdivision 3 of Division 2 of Part 5 of the Law as it applies as a law in Victoria in respect of—
(i)a specified augmentation;
(ii)specified augmentation services;
(d)provide that a specified provision of the Rules does not apply in respect of—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(e)modify the application of a specified provision of the Rules to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(f)provide that a specified definition in the Rules (including Chapter 10 of the Rules) does not apply in respect of—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(g)modify the application of a specified definition in the Rules (including Chapter 10 of the Rules) to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(h)deem a service specified in the Order as—
(i)an ancillary service, an inertia network service, a prescribed transmission service, a system strength service or any other service defined under the Law or in the Rules, or any other kind of service for the purposes of the Law or the Rules;
(ii)a service for the provision of reserve under the Rules;
(i)regulate—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(j)specify a provision of the Order, or a provision of the Law or Rules modified by the Order, as a civil penalty provision for the purposes of the Law.
(2)Without limiting subsection (1)(d), (e), (f), (g) or (i), an Order under subsection (1) may do any one or more of the following—
(a)modify the application of standards, procedures or guidelines published under the Rules to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(b)modify the application of a specified provision of the Rules to the provision of reserve in respect of—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(c)specify matters or things that are to apply in relation to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(d)specify a test, examination or assessment to apply in relation to a specified augmentation or specified augmentation services in place of the regulatory investment test for transmission (an alternative regulatory investment test);
(e)specify guidelines for the purposes of an alternative regulatory investment test;
(f)provide that augmentation related costs or non-network services costs may be recovered through charges for services specified in the Order;
(g)provide that augmentation related costs or non-network services costs may be recovered as a pass through event subject to, and in accordance with, Chapter 6A of the Rules;
(h)provide for the recovery by AEMO of any costs it incurs—
(i)in respect of a specified augmentation;
(ii)in the provision of, or in acquiring or utilising, specified augmentation services or specified non-network services;
(iii)as a result of the making of the Order or AEMO complying with a requirement under the Order;
(i)require AEMO to carry out a declared network function or a function referred to in section 16X(2)(b) in relation to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(j)require AEMO to procure or conduct a tender for—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(k)require a declared transmission system operator or prospective declared transmission system operator to—
(i)plan the carrying out of a specified augmentation;
(ii)carry out a specified augmentation;
(iii)operate a specified augmentation;
(iv)facilitate the planning, carrying out or operation of a specified augmentation;
(l)require AEMO, a declared transmission system operator, a prospective declared transmission system operator or a provider of specified augmentation services or specified non-network services to enter into agreements relating to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(m)specify terms and conditions, or the kinds of terms and conditions, that must or may, or must not, be included in an agreement entered into by AEMO, a declared transmission system operator, a prospective declared transmission system operator or a provider of specified augmentation services or specified non-network services relating to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(n)prohibit AEMO, a declared transmission system operator, a prospective declared transmission system operator or a provider of specified augmentation services or specified non-network services from, other than as specified in the Order, entering into an agreement of a specified kind relating to—
(i)a specified augmentation;
(ii)specified augmentation services;
(iii)specified non-network services;
(o)require the ESC to, under section 29(1A) of the Electricity Industry Act 2000, vary a licence issued under that Act to a declared transmission system operator, or vary the conditions of the licence, to give effect to any matter specified in the Order.
(3)For the purposes of subsection (2)(m), the terms and conditions, or the kinds of terms and conditions, that must or may be included in an agreement entered into by a party to the agreement may include a term or condition that requires the party to reduce any fees or charges the party imposes on a customer of its services as a result of a breach of a term or condition of the agreement by that party.
(4)Without limiting subsection (1), an Order under that subsection may—
(a)disapply, or modify the application of a provision of, the Law as a consequence of a provision of the Order that disapplies or modifies the application of another provision of the Law in respect of—
(i)a specified augmentation; or
(ii)specified augmentation services; or
(b)disapply, or modify the application of a provision of, the Rules as a consequence of a provision of the Order that disapplies or modifies the application of another provision of the Rules in respect of—
(i)a specified augmentation; or
(ii)specified augmentation services; or
(iii)specified non-network services;
(5)An Order under subsection (1) may—
(a)be of limited or general application;
(b)differ according to time, place or circumstances;
(c)confer functions and powers on, or leave any matter or thing to be decided by, AEMO;
(d)apply, adopt or incorporate any matter contained in any document, whether—
(i)wholly or partially or as amended by the Order; or
(ii)as existing at the time the Order is made or at any time before then; or
(iii)as existing from time to time;
(e)contain provisions of a savings or transitional nature on the making of the Order;
(f)provide for any matter that is incidental to a matter set out in the Order or necessary to give effect to a matter set out in the Order.
16ZMatters that the Minister may have regard to in making an Order
(1)In making an Order under section 16Y, the Minister may have regard to any one or more of the following—
(a)whether there is or may be a crucial national electricity system need in Victoria or in Victoria and another participating jurisdiction;
(b)options available under the Law and the Rules to address any crucial national electricity system need, including alternatives to augmentations of the declared transmission system;
(c)the potential costs to end users of any options referred to in paragraph (b);
(d)the immediate, medium and long-term needs of the national electricity system, including needs relating to the reliability, safety and security of the national electricity system;
(e)the actual or projected amount of generation or reserve in the national electricity system.
(2)In addition, in making an Order under section 16Y, the Minister may have regard to any other matter that the Minister considers relevant.
16ZAConsultation before the making of an Order
(1)Before making an Order under section 16Y, the Minister must consult with—
(a)the Premier; and
(b)the Treasurer; and
(c)AEMO.
(2)Subsection (1) does not apply if the Order the Minister proposes to make is a minor Order.
(3)In this section—
minor Order means an Order under section 16Y which amends another Order made under that section—
(a)to modify the application of standards, procedures or guidelines pursuant to section 16Y(2)(a); or
(b)to specify guidelines pursuant to section 16Y(2)(e); or
(c)to correct a clerical mistake or an error arising from an accidental slip or omission.
16ZBPublication of reasons for the making of an Order
(1)The Minister must publish in the Government Gazette the Minister's reasons for making an Order under section 16Y at the same time as the Order is published in the Government Gazette.
(2)In addition, the Minister must publish the Minister's reasons for making an Order under section 16Y on the Department's internet site as soon as practicable after the reasons are published in the Government Gazette.
16ZCEffect of Order
(1)An Order under section 16Y has effect according to its tenor in relation to the following despite anything to the contrary in this Act or in any agreement or contract—
(a)a specified augmentation;
(b)specified augmentation services;
(c)specified non-network services.
(2)To avoid doubt, section 32 applies subject to an Order under section 16Y.
(3)In addition—
(a)the Law applies as a law of Victoria in relation to—
(i)a specified augmentation subject to the Order under section 16Y specifying that augmentation; and
(ii)specified augmentation services or specified non-network services subject to the Order under section 16Y specifying those services, as the case requires; and
(b)the Rules have the force of law in Victoria in relation to—
(i)a specified augmentation subject to the Order under section 16Y specifying that augmentation; and
(ii)specified augmentation services or specified non-network services subject to the Order under section 16Y specifying those services, as the case requires.
16ZDNon-compliance with an Order enforceable under the Law
Despite section 6, if an Order under section 16Y is in effect—
(a)a reference to "the Law" or "this Law" in the following provisions of the NEL are to be read as including a reference to the Order under section 16Y, unless the context otherwise requires—
(i)section 15;
(ii)section 17;
(iii)section 18;
(iv)Division 2 of Part 3;
(v)section 28ZE;
(vi)Divisions 1, 1A and 2 of Part 6; and
(b)a reference to a "civil penalty provision" in the Law is to be read as including a reference to a provision of an Order under section 16Y, or a provision of the Law or the Rules modified by the Order, which, under the Order, is a civil penalty provision for the purposes of the Law.
16ZERecovery of augmentation related costs or non-network services costs specified in an Order
(1)This section applies despite anything to the contrary in the Law or the Rules.
(2)For the purposes of the Law and the Rules, augmentation related costs or non‑network services costs specified in an Order under section 16Y as recoverable through charges in respect of services specified in that Order may be recovered through such charges.
16ZFAugmentation related costs or non‑network services costs are a pass through event
(1)This section applies if an Order under section 16Y provides that augmentation related costs or non-network services costs specified in the Order may be recovered as a pass through event.
(2)For the purposes of the Law and the Rules, the augmentation related costs or non‑network services costs specified in the Order are taken to be a pass through event.
16ZGOrders are not legislative instruments
An Order under section 16Y is not a legislative instrument for the purposes of the Subordinate Legislation Act 1994.
16ZHAuthorisation of things done before commencement day as preparatory steps for making of Order
(1)This section applies if the Minister does a thing before the commencement day that, if that thing were done on or after that day, would be a thing required to be done under this Division before making an Order under section 16Y (a preparatory step).
(2)For the purposes of this Division, on the commencement day the Minister is taken to have complied with the requirement to do the preparatory step.
(3)In this section—
commencement day means the day on which the National Electricity (Victoria) Amendment Act 2020 comes into operation.
16ZIReview of operation of Division
(1)The Minister must cause an independent review of the operation of this Division.
(2)The review—
(a)must consider—
(i)whether it is necessary for the Division to continue to be in force; and
(ii)if it is necessary for the Division to continue to be in force, whether the Division should be amended, having regard to—
(A)the demand supply balance for electricity in Victoria; and
(B)the regulatory investment tests applying under the Law or the Rules at the time of the review to augmentations of a transmission system; and
(b)may consider any other matter that the Minister considers relevant.
(3)The review must be conducted and completed before 31 December 2025.
(4)A person who undertakes such a review must give the Minister a written report of the review by the date determined by the Minister.
(5)The Minister must cause to be laid before each House of Parliament a copy of the report of the review.
(6)In this section—
independent review means review by persons who in the opinion of the Minister have appropriate qualifications to conduct the review.'.
5Electricity Industry Act 2000—Definitions
In section 3 of the Electricity Industry Act 2000 insert the following definition—
"declared transmission system operator has the meaning given by section 33 of the National Electricity (Victoria) Act 2005;".
6Electricity Industry Act 2000—Variation of licence
After section 29(1) of the Electricity Industry Act 2000 insert—
"(1A)A licence issued to a person who is a declared transmission system operator, or the conditions of that licence, may be varied by the Commission in accordance with an Order under section 16Y of the National Electricity (Victoria) Act 2005.".
7Repeal of this Act
This Act is repealed on the first anniversary of its commencement.
Note
The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984).
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Endnotes
1 General information
See for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information.
Minister's second reading speech—
Legislative Assembly: 19 February 2020
Legislative Council: 5 March 2020
The long title for the Bill for this Act was "A Bill for an Act to amend the National Electricity (Victoria) Act 2005 and the Electricity Industry Act 2000 and for other purposes."
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