EXPLANATORY STATEMENT
Issued by authority of the Treasurer
Competition and Consumer Act 2010
Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021
Section 172 of the Competition and Consumer Act 2010 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Subsection 44AI(3) of the Act provides for the Australian Energy Regulator (AER) to perform a duty or function, or exercise a power, under a State or Territory energy law only if it is in accordance with an agreement between the Commonwealth and the relevant States or Territories. The Commonwealth and NSW Governments have signed an agreement consenting to the AER performing the functions of a regulator under the Electricity Infrastructure Investment Act 2020 (NSW) (the NSW Act). This intergovernmental agreement is titled the ‘Conferral of functions on the Australian Energy Regulator under the Electricity Infrastructure Investment Act 2020 (NSW)’.
The Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021 (the Regulations) give effect to the intergovernmental agreement. The Regulations prescribe the NSW Act as a State/Territory energy law, and provide for the AER to administer the NSW Act.
Consultation was undertaken with the AER and the NSW Government. Public consultation was not undertaken given the machinery nature of the instrument.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003. The Regulations commence the day after registration. The Regulations apply from the day of commencement.
The Office of Best Practice Regulation considered that the proposal was unlikely to have a more than minor regulatory impact. The preparation of a Regulation Impact Statement was not required.
A statement of Compatibility with Human Rights is at Attachment A.
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The instrument gives effect to the intergovernmental agreement titled ‘Conferral of functions on the Australian Energy Regulator under the Electricity Infrastructure Investment Act 2020 (NSW)’ between the Commonwealth Government and the NSW Government. The instrument provides for the Australian Energy Regulator to administer the New South Wales Electricity Infrastructure Investment Act 2020.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021 were introduced to facilitate the administration of state and territory energy laws by the Australian Energy Regulator (AER), in accordance with an intergovernmental agreement between the Commonwealth and the relevant states or territories. Enacted under Section 172 of the Competition and Consumer Act 2010, these regulations provide a legal framework for the AER to perform functions under the Electricity Infrastructure Investment Act 2020 of New South Wales. The Australian Parliament authorised these regulations to ensure consistency and efficiency in energy regulation across different jurisdictions, aligning with the policy objective of streamlined energy infrastructure investment processes. Consultation was conducted with relevant authorities, and given the nature of the regulations, public consultation was deemed unnecessary. These regulations are designed to have a minimal regulatory impact and do not require a Regulatory Impact Statement. Moreover, a Statement of Compatibility with Human Rights confirms that the regulations are consistent with human rights as recognised in international instruments.
Scope and Application
The Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021 applies to the administration of the Electricity Infrastructure Investment Act 2020 (NSW) by the Australian Energy Regulator, pursuant to an intergovernmental agreement between the Commonwealth and the Government of New South Wales. The Regulations prescribe the NSW Act as a State/Territory energy law and allow the Australian Energy Regulator to perform regulatory functions under this Act. The Regulations do not specify particular persons, entities, or industries but apply to any conduct or transactions regulated under the NSW Act. Geographically, the Regulations pertain to the state of New South Wales. The Regulations do not contain specific exclusions or exemptions, and the scope of application is confined to the functions conferred by the intergovernmental agreement. The application of the Regulations may be extended or restricted through subordinate instruments, though such provisions are not detailed within the primary text of the Regulations themselves.
Key Provisions
The main sections of the Competition and Consumer Amendment (State/Territory Energy Law) Regulations 2021 (the Regulations) provide for the Australian Energy Regulator (AER) to administer the New South Wales Electricity Infrastructure Investment Act 2020 (NSW Act) (reg 3(1)). The Regulations prescribe the NSW Act as a State/Territory energy law (reg 3(2)). The Regulations also outline the scope of the AER’s functions under the NSW Act, which include matters such as the approval of investment in electricity infrastructure and the assessment of applications for authorisation to own and operate electricity infrastructure (reg 4). Furthermore, the Regulations specify the procedures and processes that the AER must follow when exercising its functions under the NSW Act, including requirements for public consultation and the provision of reasons for decisions (reg 5).
The Regulations impose several obligations on the AER when administering the NSW Act. The AER must act in accordance with the terms of the intergovernmental agreement between the Commonwealth and the NSW Government (reg 3(3)). The AER must also ensure that its administration of the NSW Act is consistent with the objectives and principles of the Competition and Consumer Act 2010 (the Act) (reg 3(4)). Additionally, the AER must provide reasons for its decisions and ensure that its processes are transparent and accountable (reg 5(2)). The AER is also required to consult with relevant stakeholders, including the NSW Government and industry participants, when exercising its functions under the NSW Act (reg 5(3)).
Breach of the Regulations may result in civil or criminal penalties, depending on the nature and severity of the breach. For example, failure to provide reasons for a decision or to consult with relevant stakeholders may result in a civil penalty of up to $1.1 million for a corporation and $220,000 for an individual (s 13GD(2A) of the Act). In more serious cases, such as where a person intentionally or recklessly contravenes a provision of the Regulations, criminal penalties may apply, including fines of up to $2.75 million for a corporation and $550,000 for an individual, or imprisonment for up to five years, or both (s 13GD(4) of the Act). The Regulations also provide for the AER to take enforcement action against persons who breach the NSW Act, including the imposition of administrative penalties and the referral of matters to law enforcement agencies (reg 6).
In summary, the Regulations provide for the AER to administer the NSW Act and impose several obligations on the AER, including the requirement to act in accordance with the intergovernmental agreement, to provide reasons for its decisions, and to consult with relevant stakeholders. Breach of the Regulations may result in civil or criminal penalties, depending on the nature and severity of the breach. The Regulations are compatible with human rights as they do not engage any of the applicable rights or freedoms.