Electricity Companies Act 1997

The Act directly governs the companies formed under it and their subsidiaries. The members , the Minister and the Treasurer , exercise significant control through shareholding (s 8, s 9), statements of expectations (s 11A), and directions (s 11B). The board of directors of each company and the boards of subsidiaries are subject to duties including managing the business (Schedule 1, clause 2), preparing statements of corporate intent (s 11F), reporting on progress (s 18A), notifying members of adverse circumstances (s 18B), and establishing a sponsorship framework (s 18C). Employees of the Hydro-Electric Corporation can be transferred to a company by notice from the Director of Public Sector Management, and such transferred employees retain existing and accrued rights but are not entitled to compensation for the change of employer (Schedule 2, clause 3). Parties to contracts transferred under s 10 are affected because the transfer operates automatically and they cannot terminate or claim breach by reason only of the transfer (s 10(7)). The Hydro-Electric Corporation itself is a key subject: its operations, property, rights and liabilities can be transferred to the Crown or a company (s 10). The Crown is affected because it is not liable for company obligations unless it gives a guarantee (s 11(2)). The Tasmanian Public Finance Corporation is the approved lender unless a special resolution approves borrowing elsewhere (Schedule 1, clause 3). The Parliament is involved through approval of company formation (s 5(2)-(4)), tabling of directions that are objected to (s 11C(3)), and tabling of director appointments for third or subsequent terms (Schedule 1, clauses 2B-2C). The Electricity Supply Industry Act 1995 interacts by providing licensing that companies are deemed to hold for six months after incorporation (Schedule 2, clause 4).

The Act imposes numerous duties and confers rights on different actors. The board of directors must prepare a statement of corporate intent before each financial year, consistent with the statement of expectations, member directions, and Treasurer’s Instructions (s 11F(4)). The board must give a draft to members by 31 March (or later if approved) and the statement must be published on a company website (s 11F(6)). The board must prepare a six-monthly report on performance by 28 February each year and give it to members, then publish it within seven days (s 18A(1)-(3)). The board may omit parts of the report if publication would disadvantage the company or enable an unreasonable advantage (s 18A(4)). The board must notify members in writing of any development that may prevent achievement of objectives, significantly affect financial viability, or prevent compliance with a direction , and must do so as soon as possible after becoming aware (s 18B). The board must prepare a sponsorship framework in accordance with Treasurer’s Instructions (s 18C). The board may object to a direction within 21 days (s 11C). Members (the Minister and Treasurer) have the right to issue a statement of expectations after consulting the board (s 11A). They may give directions to a company or wholly-owned subsidiary, even if contrary to the memorandum, articles, statement of expectations, statement of corporate intent, or Treasurer’s Instructions, but not contrary to the Act or another Act (s 11B(3)). Before giving a direction, members must notify the company or subsidiary and allow it to provide information (s 11B(2)). Members must ensure directions are signed and dated, and given to the board (s 11B(5)). The company or subsidiary must comply with a direction, and it is a defence to an offence if the act or omission resulted from complying with a direction (s 11B(7)-(8)). Members must not vote to sell shares or to allow the company to offer shares to others (s 20(1)-(2)). Members must not vote to allow the sale of a transmission system or distribution network situated in Tasmania or any part that would significantly reduce capacity (s 20(3)). Shareholders (i.e. the members) have a right to request business plans, financial information and reports from the company (Schedule 1, clause 6). Special resolutions are required for borrowings outside the Tasmanian Public Finance Corporation, for forming or disposing of subsidiaries, and for approving subsidiary articles that do not contain equivalent borrowing restrictions (Schedule 1, clauses 3-5).

The Act itself does not create specific criminal offences for breach of most duties. However, regulations made under s 24 may create offences, with a maximum fine of 10 penalty units for each offence and, for a continuing offence, a further fine not exceeding 5 penalty units for each day the offence continues (s 24(4)). The Act provides a defence for a person charged with an offence under any Act if the defendant establishes that the act or omission was a result of complying with a direction given under s 11B (s 11B(8)). Failure to comply with a direction is not itself an offence under the Act, but the company or subsidiary must comply (s 11B(7)). The consequences of non-compliance with other obligations , such as failing to prepare a statement of corporate intent, failing to publish a report, or failing to notify members of adverse circumstances , are not specified in the Act. However, the members have control through their power to give directions and through their shareholding. The articles of association require a special resolution for certain matters, and if such a resolution is not obtained, the company cannot validly borrow from non-Tascorp sources or dispose of subsidiaries (Schedule 1, clauses 3-5). The Act does not provide for any penalty for a member voting in contravention of s 20, but s 20(4) provides that an Act purporting to repeal or amend s 20 is of no effect unless approved by a majority of electors in a referendum. Section 20A further requires a two-thirds majority in each House before such a referendum can be held for an amendment or repeal of s 20(1). These are enforcement mechanisms of a constitutional kind rather than penal sanctions.

The Act expressly interacts with several other Tasmanian and Commonwealth laws. The Corporations Act applies to companies formed under this Act , they are incorporated under it (s 5(1)), and definitions of “incorporation”, “subsidiary” and “wholly-owned subsidiary” come from the Corporations Act (s 3). Section 21B declares that to the extent a provision of this Act is incapable of concurrent operation with the Corporations Act, it is a Corporations legislation displacement provision for the purposes of s 5G of the Corporations Act. The Government Business Enterprises Act 1995 is heavily cross-referenced: guarantee fees (s 13), tax equivalents (s 14), and Treasurer’s Instructions (s 21A) all apply to companies and their subsidiaries as if they were government business enterprises specified in Schedules to that Act. The Electricity Supply Industry Act 1995 provides definitions for transmission, distribution, generation, retailing, transmission system and distribution network (s 3). Schedule 2, clause 4 deems a company to hold a licence under that Act for six months after incorporation. The Public Sector Superannuation Reform Act 2016 applies to employees of a company, and superannuation contributions are capped at the rate in s 21(3) of that Act (s 18). The Long Service Leave (State Employees) Act 1994 continues to apply to transferred employees unless they elect otherwise (Schedule 2, clause 3(8)). The Financial Agreement Act 1994 allows the Treasurer to require a company to do or refrain from doing anything to implement the Agreement, and the company must comply (s 17). The Stamp Duties Act 1931 and the Land and Income Taxation Act 1910 apply to companies and subsidiaries as if they were government business enterprises (s 22). The Government Prices Oversight Act 1995 is referenced in transitional pricing orders (Schedule 2, clause 5). The Land Titles Act 1980 is mentioned in the regulation-making power for correction of registers (s 24(2)(f)). The Acts Interpretation Act 1931 is referenced for extension of director terms (Schedule 1, clause 2A(4)). The Referendum Procedures Act 2004 governs referendums required under s 20(4).

The Act has been amended multiple times since its enactment in 1997. Key amendments include: No. 18 of 2001 (substituted s 8? Actually s 8 was substituted by No. 18/2025; in 2001 s 3 was amended re incorporation definition, and s 4 repealed). No. 42 of 2001 (various amendments to align with Corporations Act, including changes to ss 3, 4, 5, 7, Schedule 1). No. 115 of 2001 (inserted s 20(4)-(5) requiring referendum for repeal or amendment of s 20). No. 78 of 2005 (amended definition of “dispose of” in s 3; amended s 20(3) re disposal of transmission system; amended Schedule 1 clause 4). No. 1 of 2009 (substituted s 13 on guarantee fees). No. 50 of 2008 (repealed s 15). No. 9 of 2018 (inserted s 11A statement of expectations, s 21A Treasurer’s Instructions, s 21B application of Corporations Act; repealed s 16). No. 22 of 2023 (amended s 11(2) re Crown liability; amended s 12 re guarantee/indemnity). No. 18 of 2025 (major amendments: substituted s 8 members; inserted s 11B-11F directions, statement of corporate intent; inserted s 18A-18C reports, adverse circumstances, sponsorship framework; inserted Schedule 1 clauses 2A-2C director term limits). No. 20 of 2025 (inserted s 20A requiring two-thirds parliamentary approval before referendum for amendment of s 20(1); amended s 20(4) reference). No. 54 of 2016 (amended s 18 superannuation references). The Act also has transitional provisions in Schedule 2 that have now largely spent their force.

The Act itself does not reference any specific litigation or court decisions. The transfer provisions in s 10 provide for the Treasurer to determine disputes about whether any operation, property, right or liability is transferred business, or whether a contract relates to transferred business (s 10(11)). That determination must be notified in writing to the Hydro-Electric Corporation and any transfer recipient. The transfer notice is not a statutory rule (s 10(12)). The evidentiary provisions in s 23 state that publication of a notice purporting to be a transfer notice is evidence that it is validly made, and a determination under s 10(10) (now s 10(11)?) is evidence of the matters in it. No case law is cited in the Act. Given the commercial nature of the entities and the potential for disputes over asset transfers, contracts, and director duties, there may be cases interpreting the Act, but none are mentioned. The Act also provides that the memorandum and articles of a company cannot be amended unless approved by both Houses of Parliament (Schedule 1, Part 1, clause 1), which may have been tested in parliamentary practice but not in court. The requirement in s 20(4) for a referendum to repeal or amend s 20 has not been triggered to date (as of the Act’s current text). The Act’s interaction with the Corporations Act under s 21B may generate questions of displacement, but no specific litigation is noted.

Several provisions contain traps for the unwary. The most significant is s 20(4): any Act that purports to repeal or amend s 20 is of no effect unless the proposal has been approved by a majority of electors in a referendum. This entrenches the restrictions on members (being the Minister and Treasurer) from selling their shares or voting to allow share issues to others, and from voting to allow disposal of transmission or distribution networks that would significantly reduce capacity. Further, s 20A requires a two-thirds majority in each House of Parliament before a referendum can even be held for an amendment or repeal of s 20(1). A member who votes in contravention of s 20(2) or (3) may be acting invalidly, but the Act does not state a penalty. Shares are held in trust for the Crown (s 9(2)) and a member must not acquire shares for his or her own benefit (s 9(3)). Any shares acquired in breach are deemed held in trust for the Crown, but the Crown is not liable to pay for them (s 9(4)). The Crown is not liable for a company’s obligations unless the Treasurer gives a guarantee or indemnity under s 12 or a guarantee under the Tasmanian Public Finance Corporation Act 1985 (s 11(2)). Directors may be lulled into thinking they can ignore member directions because the direction can override the memorandum, articles, statement of expectations, statement of corporate intent, and Treasurer’s Instructions (s 11B(3)(a)). However, the direction cannot be contrary to the Act or another Act of Tasmania or the Commonwealth. Also, a board may object within 21 days, and if the objection is not resolved and the Minister fails to table it, the direction becomes void (s 11C(3)(c)(ii)). The articles of association contain restrictions: the company must not borrow from anyone other than the Tasmanian Public Finance Corporation unless approved by special resolution (Schedule 1, clause 3). Similarly, the company must not form or acquire a subsidiary, dispose of shares in a subsidiary, or enter a transaction that would cause a subsidiary to cease being a subsidiary unless approved by special resolution (Schedule 1, clause 4). A special resolution also requires parliamentary approval (Schedule 1, Part 1, clause 1) , so a two-stage process is needed. The company’s ability to amend its own memorandum or articles is effectively frozen until both Houses approve. The superannuation cap in s 18(2) is a compliance trap for HR. Transferred employees retain long service leave entitlements under the Long Service Leave (State Employees) Act 1994 unless they elect otherwise or an award provides otherwise (Schedule 2, clause 3(8)). The six-month deemed licence under Schedule 2, clause 4 may expire before a formal licence is obtained, creating a gap. The board must also be aware that the Minister may make pricing orders under transitional provisions (Schedule 2, clause 5) that expired on 31 December 1999 , these are historical but the power might be overlooked.

Practical compliance under this Act requires ongoing attention to governance, reporting and approvals. The board of directors must, before each financial year, prepare a statement of corporate intent consistent with the statement of expectations, any member directions, and Treasurer’s Instructions; provide a draft to members by 31 March (or later if approved); and after approval, publish it on a company website (s 11F). A six-monthly report on performance must be prepared and given to members before 28 February each year, then published within seven days (s 18A). The board must monitor for any development that may prevent achievement of objectives, affect financial viability, or affect compliance with a direction, and notify members in writing as soon as possible (s 18B). A sponsorship framework must be prepared in accordance with Treasurer’s Instructions and published (s 18C). The board must ensure that any direction received from members is complied with (s 11B(7)). If the board objects to a direction, it must object in writing within 21 days, specifying grounds (s 11C). The board must also ensure that the articles of association are amended as required by s 7(2A) to include clauses 2A, 2B and 2C (director term limits). For any borrowing outside the Tasmanian Public Finance Corporation, the company must obtain a special resolution of shareholders (Schedule 1, clause 3). For forming or acquiring subsidiaries, disposing of shares in a subsidiary, or entering a transaction that ends subsidiary status, a special resolution is needed (Schedule 1, clause 4). Any special resolution altering the memorandum or articles requires approval of both Houses of Parliament before it takes effect (Schedule 1, clause 1). The company must also comply with all Treasurer’s Instructions issued under s 21A (s 21A(4)). Members must not vote to sell their shares or to allow share issues to non-members, and must not vote to allow disposal of a transmission system or distribution network situated in Tasmania that would significantly reduce capacity (s 20). Members must also ensure that before giving a direction, they notify the company and allow it to provide information (s 11B(2)), and that the direction is in writing, signed, dated and given to the board (s 11B(5)). The Minister must table directions (or statements about them) in Parliament (s 11D). The company should maintain a register of all directions and their compliance status, and include a list in the annual report (s 11D(5)). Finally, the company must ensure its memorandum includes the principal objectives and the parliamentary approval clause (Schedule 1, Part 1), and its articles include the standard provisions on director powers, borrowing restrictions, subsidiary matters, and information requests (Schedule 1, Part 2).