Part 3Electricity supply industry

Part 3—Electricity supply industry Division A1—Declaration as regulated industry 14D—Declaration as regulated industry The electricity supply industry is declared to be a regulated industry for the purposes of the Essential Services Commission Act 2002. Division A2—Application of provisions 14E—Application of provisions (1) Divisions 1, 3 and 4 do not apply to a NERL retailer. (2) Division 3AB applies to a NERL retailer (despite the fact that it does not hold a licence under this Act). (3) If a NERL retailer fails to comply with a provision of Division 3AB, the NERL retailer is guilty of an offence. (4) An offence against subsection (3) may be prosecuted as an indictable offence or a summary offence at the discretion of the prosecutor but, if prosecuted as a summary offence, the maximum penalty that may be imposed is a fine not exceeding $20 000. Division 1—Licensing of electricity entities 15—Requirement for licence (1) A person must not carry on operations in the electricity supply industry for which a licence is required unless the person holds a licence under this Part authorising the relevant operations. (2) The operations in the electricity supply industry for which a licence is required are— (a) generation of electricity; or (b) operation of a transmission or distribution network; or (c) retailing of electricity; or (ca) system control over a power system; or (d) other operations for which a licence is required by the regulations. (3) Nothing in this section requires AEMO to hold a licence. 16—Application for licence (1) An application for the issue of a licence must— (a) be made to the Commission in a form approved by the Commission; and (b) contain the information specified in the form. (2) The applicant must pay to the Commission an application fee fixed by the Minister of an amount that the Minister considers appropriate to meet the reasonable costs of determining the application. (3) The Commission may, as the Commission considers appropriate, accept a single application from an applicant in respect of different operations of the applicant or operations of the applicant at different locations or may require separate applications. (4) The applicant must give the Commission further relevant information requested by the Commission. 17—Consideration of application (1) The Commission must consider an application for the issue of a licence and may, subject to this Division, issue, or refuse to issue, the licence. (2) The Commission must have regard to the general factors specified in Part 2 of the Essential Services Commission Act 2002 and, subject to this section, may only issue a licence if satisfied that— (a) the applicant is a suitable person to hold the licence; and (ac) the issue of the licence will not result in the same person holding both a licence authorising the operation of a distribution network and a licence authorising retailing of electricity; and (b) in the case of a licence authorising the generation of electricity—the generating plant (or proposed generating plant) will generate electricity of the appropriate quality for the relevant transmission or distribution network; and (c) in the case of a licence authorising the operation of a transmission or distribution network—the network has (or the proposed network will have) the necessary capacity for transmitting or distributing electricity safely; and (d) in the case of a licence authorising retailing of electricity—the applicant will be able to meet reasonably foreseeable obligations under contracts for the sale of electricity; and (da) in the case of a licence authorising system control over a power system—the applicant will be able to adequately exercise system control functions; and (e) in the case of a licence authorising other operations in the electricity supply industry for which a licence is required under the regulations—the applicant meets any special requirements imposed by the regulations for the holding of the licence; and (f) in the case of a licence of any class—the grant of the licence would be consistent with criteria (if any) prescribed by regulation for a licence of the relevant class. (3) In deciding whether an applicant is a suitable person to hold a licence, the Commission may consider— (a) the applicant's previous commercial and other dealings and the standard of honesty and integrity shown in those dealings; and (b) the financial, technical and human resources available to the applicant; and (c) the officers and, if applicable, major shareholders of the applicant and their previous commercial and other dealings and the standard of honesty and integrity shown in those dealings (including breaches of statutory and other legal obligations); and (d) other matters prescribed by regulation. (4) If— (a) a person carries on or proposes to carry on operations for which a licence is required as agent of another person; and (b) the agent makes application for the issue of such a licence on the agent's own behalf and on behalf of the principal; and (c) the Commission is satisfied that the criteria for the issue of the licence are met in relation to the agent, the Commission may, at the Commission's discretion, dispense with the requirement that the Commission be satisfied that the criteria are met in relation to the principal and issue the licence to the agent and the principal to be held by them jointly. (5) If an applicant for the issue of a licence is a Registered participant, as defined in the National Electricity (South Australia) Law, the Commission may, in determining the application, in order to avoid duplication of, or inconsistency with, regulatory requirements under the National Electricity Rules, dispense with a requirement under this section that the Commission be satisfied as to a particular matter. 17A—Licences may be held jointly (1) A licence may be held jointly by two or more persons. (2) If a licence is held jointly by two or more persons, those persons are jointly and severally liable to meet requirements imposed under this Act or the Essential Services Commission Act 2002. 18—Authority conferred by licence (1) A licence authorises the person named in the licence to carry on operations in the electricity supply industry in accordance with the terms and conditions of the licence. (2) The operations authorised by a licence need not be all of the same character or at the same location but may consist of a combination of different operations or operations at different locations. 19—Term of licence A licence may be issued for an indefinite period or for a term specified in the licence. 20—Licence fees and returns (1) A person is not entitled to the issue of a licence unless the person first pays to the Commission the annual licence fee, or the first instalment of the annual licence fee, as the case may require. (2) The holder of a licence issued for a term of two years or more must— (a) in each year lodge with the Commission, before the date prescribed for that purpose, an annual return containing the information required by the Commission by condition of the licence or by written notice; and (b) in each year (other than a year in which the licence is due to expire) pay to the Commission, before the date prescribed for that purpose, the annual licence fee, or the first instalment of the annual licence fee, as the case may require. (3) The annual licence fee for a licence is the fee fixed, from time to time, by the Minister in respect of that licence as an amount that the Minister considers to be a reasonable contribution towards administrative costs. (4) An annual licence fee may, if the Commission so determines, be paid in equal instalments at intervals fixed by the Commission. (5) If the holder of a licence fails to lodge the annual return or pay the annual licence fee (or an instalment of the annual licence fee) in accordance with this section, the Commission may, by written notice, require the holder to make good the default and, in addition, to pay to the Commission the amount prescribed as a penalty for default. (6) An annual licence fee (including any instalment of an annual licence fee or any penalty for default) payable under this section is recoverable as a debt due to the Crown. administrative costs means— (a) the costs of administration of this Act; and (b) any costs of administration of the Essential Services Commission Act 2002 relating to the electricity supply industry; and (c) the costs of AEMO relating to the electricity supply industry that are designated by the Minister as being appropriate for recovery under this section; and (d) other costs prescribed by regulation; holder of a licence includes the holder of a licence that has been suspended. 21—Licence conditions (1) The Commission must make a licence subject to conditions determined by the Commission— (a) requiring compliance with applicable codes or rules made under the Essential Services Commission Act 2002 as in force from time to time; and (b) requiring compliance with specified technical or safety requirements or standards; and (c) relating to the electricity entity's financial or other capacity to continue operations under the licence; and (e) requiring the electricity entity to have all or part of the operations authorised by the licence audited and to report the results of the audit to the Commission; and (f) requiring the electricity entity to notify the Commission about changes to officers and, if applicable, major shareholders of the entity; and (g) requiring the electricity entity to provide, in the manner and form determined by the Commission, such other information as the Commission may from time to time require; and (h) requiring the electricity entity to comply with the requirements of any scheme approved and funded by the Minister for the provision by the State of customer concessions or the performance of community service obligations by electricity entities. (2) The Commission must make a licence subject to further conditions that the Commission is required by regulation to impose on the issue of such a licence. (3) The Commission may make a licence subject to further conditions considered appropriate by the Commission. (4) The Commission must provide to the Minister any information that the Minister requires for the purposes of the administration of a scheme for the provision by the State of customer concessions, or the performance of community service obligations, relating to the sale or supply of electricity. 22—Licences authorising generation of electricity (1) The Commission must make a licence authorising the generation of electricity subject to conditions determined by the Commission— (a) requiring compliance with directions of the system controller; and (b) requiring the electricity entity not to do anything affecting the compatibility of the entity's electricity generating plant with any transmission or distribution network so as to prejudice public safety or the security of the power system of which the generating plant forms a part; and (c) requiring the electricity entity— (i) to prepare, maintain and periodically revise a safety, reliability, maintenance and technical management plan dealing with matters prescribed by regulation; and (ii) to obtain the approval of the Technical Regulator— (A) to the plan (prior to the commencement of the operation of the generating plant to which the plan relates); and (B) to any revision of the plan; and (iii) to comply with the plan as approved from time to time; and (iv) to audit from time to time the entity's compliance with the plan and report the results of those audits to the Technical Regulator; and (d) requiring the electricity entity to provide to AEMO such information as it may reasonably require for the performance of its functions; and (e) requiring the electricity entity— (i) to grant to each electricity entity holding a licence authorising the operation of a transmission or distribution network rights to use or have access to the entity's electricity generating plant that are necessary for the purpose of ensuring the proper integrated operation of the State's power system and the proper carrying on of the operations authorised by the entity's licence; and (ii) in the absence of agreement as to the terms on which such rights are to be granted, to comply with any determination of the Commission as to those terms; and (iii) to comply with any code provisions in force from time to time under the Essential Services Commission Act 2002 establishing a scheme for the resolution of disputes in relation to such rights; and (f) requiring the electricity entity to maintain insurance against any liability for causing a bushfire and to provide the Commission with a certificate of the insurer or the insurance broker by whom the insurance was arranged certifying (in a manner approved by the Commission) that the insurance is adequate and appropriate given the nature of the operations carried on under the entity's licence and the risks entailed in those operations. (1a) In addition, it is a condition of a licence authorising the generation of electricity that the holder of the licence— (2) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising the generation of electricity. 23—Licences authorising operation of transmission or distribution network (1) The Commission must make a licence authorising the operation of a transmission or distribution network subject to conditions determined by the Commission— (a) requiring compliance with directions of the system controller; and (b) requiring the electricity entity not to do anything affecting the compatibility of the entity's transmission or distribution network with any electricity generating plant or transmission or distribution network so as to prejudice public safety or the security of the power system of which the transmission or distribution network forms a part; and (c) requiring the electricity entity— (i) to prepare, maintain and periodically revise a safety, reliability, maintenance and technical management plan dealing with matters prescribed by regulation; and (ii) to obtain the approval of the Technical Regulator— (A) to the plan (prior to the commencement of the operation of the transmission or distribution system to which the plan relates); and (B) to any revision of the plan; and (iii) to comply with the plan as approved from time to time; and (iv) to audit from time to time the entity's compliance with the plan and report the results of those audits to the Technical Regulator; and (d) requiring the electricity entity to provide to AEMO such information as it may reasonably require for the performance of its functions; and (e) requiring the electricity entity to maintain specified accounting records and to prepare accounts according to specified principles; and (f) requiring the electricity entity to inform persons seeking or in receipt of network services of the terms on which the services are provided (including the charges for the services) and of any changes in those terms; and (g) requiring the electricity entity to carry out work to locate powerlines underground in accordance with a program established under Part 5A; and (h) requiring the electricity entity to comply with— (i) specified provisions for or relating to the granting to other electricity entities of rights to use or have access to the entity's transmission or distribution network (on non-discriminatory terms) for the transmission or distribution of electricity by the other entities; and (ii) any scheme that the Commission may establish by a code made under the Essential Services Commission Act 2002 for the resolution of disputes in relation to such rights; and (i) requiring the electricity entity to comply with— (i) specified provisions for or relating to the granting to all electricity entities and customers of a class specified in the condition of rights to use or have access to the entity's transmission or distribution network (on non-discriminatory terms) to obtain electricity from the network; and (ii) any scheme that the Commission may establish by a code made under the Essential Services Commission Act 2002 for the resolution of disputes in relation to such rights; and (j) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) establishing a scheme— (i) for other bodies to use or have access to the entity's transmission or distribution network for telecommunications purposes (subject to requirements as to technical feasibility and preservation of visual amenity); and (ii) for the resolution of disputes in relation to such use or access by a person other than the Commission who is appointed by the Commission; and (k) requiring the electricity entity to participate in an ombudsman scheme— (i) that applies to the electricity supply industry and to other regulated industries (within the meaning of the Essential Services Commission Act 2002) prescribed by regulation; and (ii) the terms and conditions of which are approved by the Commission; and (l) requiring the electricity entity to maintain insurance against any liability for causing a bushfire and to provide the Commission with a certificate of the insurer or the insurance broker by whom the insurance was arranged certifying (in a manner approved by the Commission) that the insurance is adequate and appropriate given the nature of the operations carried out under the entity's licence and the risks entailed in those operations; and (m) in the case of a licence authorising the operation of a transmission network— (i) requiring the business of the operation of the transmission network authorised by the licence to be kept separate from any other business of the electricity entity or any other person in the manner and to the extent specified in the conditions; and (ii) requiring the electricity entity— (A) to grant to each electricity entity holding a licence authorising the generation of electricity or the operation of a distribution network rights to use or have access to the entity's transmission network that are necessary for the purpose of ensuring the proper integrated operation of the State's power system and the proper carrying on of the operations authorised by the entity's licence; and (B) in the absence of agreement as to the terms on which such rights are to be granted, to comply with any determination of the Commission as to those terms; and (C) to comply with any code provisions in force from time to time under the Essential Services Commission Act 2002 establishing a scheme for the resolution of disputes in relation to such rights; and (n) in the case of a licence authorising the operation of a distribution network— (i) requiring the business of the operation of the distribution network authorised by the licence to be kept separate from any other business of the electricity entity or any other person in the manner and to the extent specified in the conditions; and (ii) requiring the electricity entity— (A) to grant to each electricity entity holding a licence authorising the generation of electricity or the operation of a transmission network rights to use or have access to the entity's distribution network that are necessary for the purpose of ensuring the proper integrated operation of the State's power system and the proper carrying on of the operations authorised by the entity's licence; and (B) in the absence of agreement as to the terms on which such rights are to be granted, to comply with any determination of the Commission as to those terms; and (C) to comply with any code provisions in force from time to time under the Essential Services Commission Act 2002 establishing a scheme for the resolution of disputes in relation to such rights; and (iii) requiring the electricity entity to establish customer consultation processes of a specified kind; and (iv) requiring or relating to standard contractual terms and conditions to apply to the supply of electricity to small customers or customers of a prescribed class; and (v) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) imposing minimum standards of service for customers that are at least equivalent to the actual levels of service for such customers prevailing during the year prior to the commencement of this section and take into account relevant national benchmarks developed from time to time, and requiring the entity to monitor and report on levels of compliance with those minimum standards; and (vi) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) limiting the grounds on which the supply of electricity to customers may be disconnected and prescribing the process to be followed before the supply of electricity is disconnected; and (vii) requiring a specified process to be followed to resolve disputes between the electricity entity and customers as to the supply of electricity; and (viii) requiring the electricity entity to enter into and comply with an agreement (on terms approved from time to time by the Commission) with each person holding a licence authorising the retailing of electricity who provides services to the same customers as the entity as to the co-ordination of the provision of services to those customers; and (x) requiring the electricity entity— (A) to investigate, before it makes any significant expansion of the distribution network or the capacity of the distribution network, whether it would be cost effective to avoid or postpone such expansion by implementing measures for the reduction of demand for electricity from the network; and (B) to prepare and publish reports relating to such demand management investigations and measures. (1a) In addition, it is a condition of a licence authorising the operation of a transmission or distribution network that the holder of the licence— (2) A condition of an electricity entity's licence imposed under subsection (1)(h) is not to be taken to require the granting to other electricity entities of rights to use or have access to the entity's transmission or distribution network for the support or use of electricity infrastructure of the other entities. (5a) If an electricity entity fails, within a period of 90 days from a date specified by the Commission by written notice to the entity, to enter into an agreement with another electricity entity specified by the Commission as required by a condition of the entity's licence imposed under subsection (1)(n)(viii), the entities will, if the Commission so determines and notifies the entities in writing, be taken to have entered into such an agreement containing terms specified in the notice. (5b) The Commission may, by written notice to the electricity entities bound by— (a) an agreement entered into as required by conditions of their licences imposed under subsection (1)(n)(viii) and section 24(2)(h); or (b) an agreement imposed under subsection (5a), vary or substitute terms of the agreement. (6) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising the operation of a transmission or distribution network. 24—Licences authorising retailing (2) The Commission must make a licence authorising the retailing of electricity subject to conditions determined by the Commission— (a) requiring, if the holder of the licence is a related body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) in relation to the holder of a licence authorising the operation of a distribution network, the business of the retailing of electricity authorised by the licence to be kept separate from the business of the operation of the distribution network in the manner and to the extent specified in the conditions; and (b) if the electricity entity sells electricity to customers of a prescribed class, requiring the electricity entity to maintain specified accounting records and to prepare accounts according to specified principles; and (c) requiring the electricity entity to establish customer consultation processes of a specified kind; and (d) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002 on or before the prescribed date) relating to the provision of pricing information to enable small customers to compare competing offers in the retailing of electricity; and (da) requiring the electricity entity to include (in a print size and form prescribed by regulation) in each account for electricity charges sent to a small customer information prescribed by regulation, including information relating to— (i) the customer's electricity consumption during the preceding 12 months; and (ii) the entity's daily charges for electricity during the period to which the account relates; and (iii) obtaining advice through the Commission about reducing electricity consumption and about electricity consumer choices; and (iv) greenhouse gas emissions associated with the customer's electricity consumption; and (e) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) relating to standard contractual terms and conditions to apply to the sale of electricity to small customers; and (h) requiring the electricity entity to enter into and comply with an agreement (on terms approved from time to time by the Commission) with each person holding a licence authorising the operation of a distribution network who provides services to the same customers as the entity as to the co-ordination of the provision of services to those customers; and (i) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) imposing minimum standards of service for customers that are at least equivalent to the actual levels of service for such customers prevailing during the year prior to the commencement of this section and take into account relevant national benchmarks developed from time to time, and requiring the entity to monitor and report on levels of compliance with those minimum standards; and (j) requiring the electricity entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) limiting the grounds on which the supply of electricity to customers may be discontinued or disconnected and prescribing the process to be followed before the supply of electricity is discontinued or disconnected; and (k) requiring a specified process to be followed to resolve disputes between the electricity entity and customers as to the sale of electricity; and (l) if the electricity entity sells electricity to customers with an annual electricity consumption level of less than 750MW.h per year, requiring the electricity entity to participate in an ombudsman scheme— (i) that applies to the electricity supply industry and to other regulated industries (within the meaning of the Essential Services Commission Act 2002) prescribed by regulation; and (ii) the terms and conditions of which are approved by the Commission; and (m) requiring the electricity entity— (i) to investigate strategies for achieving a reduction of greenhouse gas emissions to such targets as may be set by the Environment Protection Authority from time to time or such levels as may be binding on the entity from time to time, including strategies for promoting the efficient use of electricity and the sale, as far as is commercially and technically feasible, of electricity produced through cogeneration or from sustainable sources; and (ii) to prepare and publish annual reports on the implementation of such strategies. (4) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising the retailing of electricity. 24A—Licences authorising system control (1) The Commission must make a licence authorising system control over a power system subject to conditions determined by the Commission requiring the business of system control authorised by the licence to be kept separate from any other business of the electricity entity or any other person in the manner and to the extent specified in the conditions. (1a) In addition, it is a condition of a licence authorising system control over a power system that the holder of the licence— (2) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising system control over a power system. 24B—Licence conditions and national energy laws Despite the preceding provisions of this Part, the Commission is not to impose a condition on a licence if the Commission is satisfied that the condition would duplicate, or be inconsistent with, regulatory requirements under the National Electricity (South Australia) Act 1996, National Electricity Rules, National Energy Retail Law (South Australia) or National Energy Retail Rules. 25—Offence to contravene licence conditions (1) An electricity entity must not contravene a condition of its licence. (2) An offence against subsection (1) may be prosecuted as an indictable offence or a summary offence at the discretion of the prosecutor but, if prosecuted as a summary offence, the maximum penalty that may be imposed for the offence is a fine not exceeding $20 000. 27—Variation of licence (1) The Commission may vary the terms or conditions of an electricity entity's licence by written notice to the entity as the Commission considers appropriate (but not so as to remove a condition that the Commission is required by this Act to impose on such a licence). (2) A variation may only be made— (a) on application by the electricity entity or with the electricity entity's agreement; or (b) after giving the electricity entity reasonable notice of the proposed variation and allowing the entity a reasonable opportunity to make representations about the proposed variation. 28—Transfer of licence (1) A licence may only be transferred with the Commission's agreement. (2) The Commission may impose conditions on the transfer of a licence, or vary the terms and conditions of the licence on its transfer. (3) The Commission must not agree to the transfer of a licence if the transferee would not be entitled to the issue of the licence. (4) An application for agreement to the transfer of a licence must— (a) be made by the transferor with the consent of the transferee to the Commission in a form approved by the Commission; and (b) contain the information specified in the form. (5) The applicant must pay to the Commission an application fee fixed by the Minister of an amount that the Minister considers appropriate to meet the reasonable costs of determining the application. (6) The applicant must give the Commission further relevant information requested by the Commission. 28A—Consultation with consumer bodies The Commission may, before issuing a licence, agreeing to the transfer of a licence or determining or varying conditions of a licence, consult with and have regard to the advice of— (a) the Commissioner for Consumer Affairs; and (b) the consumer advisory committee established under Part 2. 28B—Notice of licence decisions (1) The Commission must give an applicant for a licence, or for agreement to the transfer of a licence, written notice of the Commission's decision on the application. (2) The Commission must give the holder of a licence written notice of any decision by the Commission affecting the terms or conditions of the licence. 29—Surrender of licence (1) An electricity entity may, by written notice given to the Commission, surrender its licence. (2) The notice must be given to the Commission at least six months before the surrender is to take effect or, if the licence requires a longer period of notice, as required by the licence. (3) The Commission may, by agreement with the electricity entity, shorten the required period of notice. 30—Register of licences (1) The Commission must keep a register of the licences currently held by electricity entities under this Act. (2) The register must include— (a) the terms and conditions of each licence; and (b) other information required under the regulations. (3) A person may, without payment of a fee, inspect the Register. 30A—Licence is not personal property for the purposes of Commonwealth Act A licence under this Part is not personal property for the purposes of the Personal Property Securities Act 2009 of the Commonwealth.