Energy Efficiency Opportunities Amendment (Continuation of Networks Exemption) Regulation 2013

Overview

The Energy Efficiency Opportunities Amendment (Continuation of Networks Exemption) Regulation 2013 was issued by the Minister for Resources and Energy under the authority of the Energy Efficiency Opportunities Act 2006. The Act was enacted to establish the Energy Efficiency Opportunities Program, which requires businesses that use large amounts of energy to assess their energy use to identify opportunities for energy efficiency, and to publicly report on the outcomes of these assessments. The threshold for corporations required to register for the program is half a petajoule over a financial year. The primary objective of the regulation is to make permanent the exemption of electricity and gas transmission and distribution businesses from the program, a measure initially adopted to focus on larger energy sectors and avoid conflicts with energy market reforms. This amendment follows extensive stakeholder consultation and a Regulation Impact Statement which concluded that the costs associated with expanding the program to network businesses would outweigh the benefits. Consequently, the Government decided not to proceed with the expansion, and the regulation makes the exemption permanent by removing the 1 July 2013 expiration date of the exemption. Additionally, the regulation modifies the definition of energy loss to exclude energy lost through the transmission and distribution of electricity and gas. The regulation is compatible with human rights and has no financial implications, with Schedule 1 commencing the day after registration and Schedule 2 on 1 July 2013.

Scope and Application

The Energy Efficiency Opportunities Act 2006 applies to businesses that use large amounts of energy, specifically those that consume half a petajoule or more over a financial year. This legislation mandates that these businesses conduct assessments of their energy use to identify energy efficiency opportunities and publicly report on the outcomes of those assessments. The Act's jurisdictional reach is national, as it is a Commonwealth Act. However, the original Energy Efficiency Opportunities Regulations 2006 exempted electricity and gas transmission and distribution businesses, commonly referred to as network businesses, from participating in the Program. This exemption was designed to avoid conflicts with ongoing energy market reforms. The Energy Efficiency Opportunities Amendment (Continuation of Networks Exemption) Regulation 2013 seeks to make this exemption permanent by removing the scheduled expiration date and adjusting the definition of energy loss to exclude losses from transmission and distribution networks. The Regulation also notes that despite stakeholder consultations and trials, the expansion of the Program to include network businesses would not be financially viable due to high compliance and implementation costs relative to potential savings.

Key Provisions

The Energy Efficiency Opportunities Amendment (Continuation of Networks Exemption) Regulation 2013 primarily focuses on two main amendments to the existing Energy Efficiency Opportunities Regulations 2006. Under Section 2 of the Amendment Regulation, certain sections and Schedules will commence the day after the Regulation is registered, while Schedule 2 will commence on 1 July 2013. The primary amendments are detailed in Schedule 1 and Schedule 2, which repeal specific subregulations concerning the exemption of certain corporations and the definition of network losses. The obligations imposed by the Amendment Regulation are primarily concerned with maintaining the exemption for electricity and gas transmission and distribution businesses, also known as network businesses, from the Energy Efficiency Opportunities Program established under the Energy Efficiency Opportunities Act 2006. By making these exemptions permanent, the Regulation ensures that network businesses remain exempt from the obligations to conduct energy use assessments and publicly report on the outcomes of these assessments (Section 2). This exemption allows these businesses to continue focusing on their core operations without the added regulatory burden of participating in the Program. Under the Amendment Regulation, the obligations on parties and entities governed by the Energy Efficiency Opportunities Act 2006 are largely maintained, with the exception of network businesses. Corporations using large amounts of energy, specifically over half a petajoule in a financial year, remain required to conduct energy assessments and report publicly on their outcomes (Section 41 of the Act). The Amendment Regulation's modifications ensure that network businesses are excluded from these obligations, thereby streamlining compliance for these entities. There are no direct offences, penalties, or civil/criminal consequences outlined in the Amendment Regulation itself, as it is primarily concerned with the continuation of existing exemptions. However, failure to comply with the Energy Efficiency Opportunities Act 2006, including non-exempt businesses not conducting required energy assessments or failing to report outcomes, could result in penalties as stipulated in the Act. Such penalties would be determined based on the specific breaches and the discretion of the relevant authorities under the Act. The Amendment Regulation ensures that network businesses are not subject to these potential penalties due to their exemption.