Electricity Industry (Independent Market Operator) Repeal Regulations 2018

The central concept is the IMO, the Independent Market Operator, which under the now‑repealed regulations operated the wholesale electricity market in Western Australia and performed functions under the Gas Services Information Act 2012. The regulations abolish that office but keep it artificially alive for winding‑up purposes only (reg 6). Next is AEMO, the Australian Energy Market Operator Limited, which is given a statutory function: to assist the reporting officer in performing his or her functions under these regulations (reg 8(3)). This suggests that operational and technical knowledge of the markets is being transferred to the national market operator rather than retained in a Western Australian‑specific body. The reporting officer is the key administrator: an employee of the relevant department designated by the Minister (reg 8(1)-(2)). That person becomes the governing body of the IMO for transitional purposes and performs board‑level functions (reg 6(3)). Residual assets and liabilities are defined very broadly. “Asset” includes property of any kind, tangible or intangible, real or personal, and extends to choses in action, goodwill, rights, interests and claims - whether liquidated or unliquidated, actual, contingent or prospective (reg 3(1)). “Liability” is similarly broad, covering any duty or obligation that is actual, contingent or prospective and owed alone or jointly (reg 3(1)). “Right” also encompasses power, privilege and immunity, again including contingent or prospective rights (reg 3(1)). This breadth ensures that nothing falls through the cracks when the Minister decides how to deal with the IMO’s affairs. Market participant covers both electricity participants under the Electricity Industry Act 2004 and gas market participants under the Gas Services Information Act 2012 (reg 3(1)). These are the entities that may receive a surplus distribution or be called upon to fund a deficit. Final reporting involves the preparation of a report covering a period from 1 July 2017 to immediately before repeal day (reg 9(1)). That report includes not only the standard annual report matters (via the continued operation of repealed regulations 35, 37 and 51 of the IMO Regulations) but also a description of the transfer of the IMO’s functions to other persons and a summary of winding‑up activities (reg 9(2)-(3)). Final reconciliation requires a separate determination for each of two cost‑recovery streams: one under the wholesale electricity market regulations and one under the gas services information regulations (reg 10(1)). The equity of the State is excluded from that determination (reg 10(3)). Disposal of the IMO’s bank accounts and delivery of records to the Minister complete the transitional process (regs 11, 14). The regulations also provide for the registration of documents affecting land or other property with the Registrar of Titles, Registrar of Deeds, and other officials (reg 15). The interaction with existing contracts and instruments is explicitly preserved: nothing done under these regulations constitutes a breach of contract, confidence, or civil wrong, and does not trigger termination clauses or release sureties (reg 16). Finally, the regulations sit alongside the Interpretation Act 1984 rather than displacing it (reg 17).

Three groups are directly affected. Market participants are the most commercially exposed. They are defined to include both electricity market participants (under the Electricity Industry Act 2004 s 121(2)) and gas market participants (under the Gas Services Information Act 2012 s 3(1)). These entities may be required to pay into a deficit or may receive distributions from a surplus as determined by the reporting officer in the final reconciliation (reg 10(4)). The actual amount is not set by these regulations; it will be determined under the WEM rules and GSI rules respectively. Nonetheless, the possibility of a call on market participants to cover a historical cost shortfall is a real contingent liability. Former directors and the former chief executive officer of the IMO lose office automatically upon repeal (reg 5). No compensation is mentioned. They also gain a right of access to records held by the Minister, but only to the extent necessary to deal with a claim made against them (reg 14(2)). That access is not unconditional and does not require indefinite retention of records (reg 14(5)). The reporting officer - an employee in the department assisting the Minister - becomes the temporary governing body of the IMO and must perform various administrative and reporting tasks. AEMO is given a statutory function to assist the reporting officer (reg 8(3)). This is notable because AEMO is a national entity; the regulations effectively impose a duty on it to cooperate with a state‑appointed officer. The Minister has broad discretionary powers: to direct how residual assets and liabilities are dealt with (reg 7(2)-(3)), to designate the reporting officer (reg 8(2)), to fix the dissolution day (reg 12(1)), to fix the repeal day for these regulations themselves (reg 18(1)), and to give copies of directions to interested persons (reg 7(7)). The Treasurer has a concurrence power over liability directions (reg 7(3)), giving the Treasurer a veto over how debts and obligations are discharged. The Coordinator of Energy is mentioned only in the definitions (reg 3(1)) but does not appear to have an active role under these regulations. Any person in possession of IMO accounts or records is required to produce them to the reporting officer on request, subject to a fine of $10,000 for non‑compliance (reg 13(3)). This spans former staff, contractors, and possibly financial institutions. Successor entities (the State or another entity) that receive assets or liabilities under a ministerial direction become substituted for the IMO in proceedings and instruments (reg 7(5)). That means a private company or a government agency could find itself a party to a contract or litigation that originally involved the IMO. Finally, the public is affected indirectly: the dissolution of the IMO reduces the number of state‑specific market bodies, centralising functions in AEMO, but without any statutory guarantee of cost savings or service levels. The regulations do not impose any consultation requirements on market participants before the Minister directs asset or liability transfers.

The reporting officer’s duties are central. The officer must prepare a final report for the IMO covering the period from 1 July 2017 to immediately before repeal day (reg 9(1)). That report must include a description of the transfer of the IMO’s functions to other persons and a summary of winding‑up activities (reg 9(3)(b)-(c)). The officer must also determine whether the IMO had a surplus or deficit in two separate cost‑recovery streams (reg 10(1)), and must do so in accordance with the WEM rules and the GSI rules (reg 10(2)). Once satisfied that a bank account is no longer needed, the officer must close it (reg 11). The officer has a right of access at all reasonable times to any accounts, information, documents and records considered necessary for winding‑up purposes (reg 13(1)). That right extends to making copies or extracts (reg 13(2)). Any person in possession of such records must produce them on request; failure carries a $10,000 fine (reg 13(3)). The IMO itself (through the reporting officer) must deliver all accounts, documents and records to the Minister as soon as practicable after repeal day (reg 14(1)). The Minister then has duties to ensure certain persons have access to those records: former directors and officers to the extent necessary to deal with claims against them (reg 14(2)-(3)), and AEMO to the extent necessary for its functions under a written law (reg 14(4)). These access rights are limited by the State Records Act 2000 retention requirements (reg 14(5)). The Minister may direct how residual assets and liabilities are dealt with, and for liabilities the Treasurer must concur (reg 7(2)-(3)). The Minister must give written directions and, to the extent practicable, give a copy to each person who has a direct interest (reg 7(7)). The Minister also has the power to fix the IMO’s dissolution day and later the repeal day for these regulations (regs 12, 18). The regulations confer broad immunities on the operation of the regulations themselves: no act or omission under them is to be regarded as a breach of contract, confidence, or civil wrong; it does not breach a contractual provision restricting transfer or disclosure; it does not give a remedy for change of ownership; it does not make a contract void or unenforceable; and it does not release a surety (reg 16). This means that a counterparty to an IMO contract cannot argue that the transfer of assets or liabilities triggered a default or termination right. The successor entity receives the benefit of that statutory protection. AEMO has a duty to assist the reporting officer, but the scope of “assist” is not defined; it could range from providing data to seconding staff. The regulations do not create a right for market participants to challenge the Minister’s directions or the reporting officer’s determinations beyond whatever general administrative law remedies might exist. The reporting officer’s final report is not subject to any statutory approval or veto by the Minister; it is simply given to the Minister (reg 9(1)). The market participant’s right is limited to whatever the WEM rules and GSI rules provide for surplus distribution or deficit recovery (reg 10(4)). Those rules are not set out in this instrument.

Only one penalty provision appears in the regulations. Under reg 13(3), a person who has possession of accounts, information, documents or records that the reporting officer considers necessary for winding‑up purposes must produce them at any reasonable time on request. The penalty for non‑compliance is a fine of $10,000. This is a criminal penalty, not a civil one. The recipient of the demand cannot refuse on the grounds of privacy, confidentiality, or commercial sensitivity - the regulations do not carve out any exceptions. The fine is not indexed, so its real value will erode over time. Enforcement of the penalty would presumably occur through prosecution in a magistrates court. Beyond that, there are no specific penalty provisions for the Minister, the reporting officer, or AEMO if they fail to perform their duties. The reporting officer’s duties (preparing the final report, determining surplus/deficit, closing bank accounts) are not backed by any express sanction for delay or omission. The Minister’s powers are largely discretionary; a failure to act (for example, not issuing a dissolution notice) would simply keep the IMO in existence indefinitely, but no penalty applies. The regulations do not impose any liability on the reporting officer or the Minister for loss caused by the exercise of powers. The wide immunity in reg 16 protects the operation of the regulations from being treated as a civil wrong, but it does not shield individuals from criminal liability or from personal liability for acts done in bad faith. The regulations do not create any offence for the IMO’s former directors or CEO if they fail to cooperate, but the reporting officer’s power to demand documents under reg 13(3) can capture any person, including those former officeholders. The penalty of $10,000 is a modest sum for a large electricity market participant but could be significant for a small gas market participant. Notably, the reporting officer is not required to first obtain a warrant or court order to access information; the right of access is at “all reasonable times” and the production duty arises on request (reg 13(1), (3)). This is a broad administrative power with no judicial oversight built in. The regulations also provide that the registration powers of the Registrar of Titles and similar officials are mandatory: they “are to take notice of these regulations and are empowered to record and register” (reg 15(2)). That language imposes a duty, but no penalty for non‑compliance is stated. If a registrar refused to register, the Minister would presumably need to seek judicial review.

The regulations sit within a web of Western Australian legislation. Most directly, they repeal the Electricity Industry (Independent Market Operator) Regulations 2004 (reg 4). Part 3 then revives certain provisions of those repealed regulations for specific purposes. Regulation 35 of the IMO Regulations (annual reporting) is preserved to the extent necessary for the final report (reg 9(2)). Regulations 37 and 51 and Schedule 3 of the IMO Regulations are also preserved, with modifications (reg 9(5)). This means that the format, content requirements, and audit requirements from the old regulations continue to apply for the final reporting period. The regulations also interact with the Electricity Industry (Wholesale Electricity Market) Regulations 2004 and the Gas Services Information Regulations 2012. The reporting officer’s surplus/deficit determination must be made in accordance with the “WEM rules” and “GSI rules” (reg 10(2)). Those rules may prescribe how surpluses are distributed to market participants or deficits recovered (reg 10(4)). The financial reporting obligations of the IMO under those rules are substituted by the final report (reg 9(4)). The Interpretation Act 1984 applies generally (reg 17). That Act contains default provisions about the effect of repeals, savings and transitional matters, and these regulations are expressly stated to operate in addition to it, not in substitution. The State Records Act 2000 governs how long the IMO’s records must be retained. The Minister’s duty to provide access to records is qualified by the record keeping plan under that Act (reg 14(5)). That means access rights for former directors and AEMO may be limited if records are destroyed under an authorised disposal schedule. The Transfer of Land Act 1893, the Registration of Deeds Act 1856, and the Land Administration Act 1997 are engaged by reg 15, which requires the relevant registrars and the Minister administering land administration to register documents showing the effect of the regulations. This eases the transfer of land or other property from the IMO to the State or other entities without requiring separate instruments. The regulations also interact with general contract and property law through reg 16. By deeming that no breach of contract, confidence, or civil wrong occurs, the regulations override contractual terms that might otherwise restrict assignment, change of control, or disclosure. This is a statutory override of private agreements. The regulation does not, however, override statutory duties such as those under the Corporations Act (if the IMO had corporate status, which it did under its own regulations; that is now superseded). The Public Sector Management Act 1994 is referenced only for the definition of “employee” (reg 8(1)), meaning the reporting officer must be a public service employee. The Energy Coordination Act 1994 is mentioned only in the definition of “Coordinator”. There is no explicit interaction with the Australian Energy Market Operator’s national legislation, but the regulations impose a function on AEMO to assist, which presumably AEMO would comply with under its own constitution or under intergovernmental agreements. No interaction with the Competition and Consumer Act 2010 (Cth) is mentioned, but the transfer of market operation functions from a state body to a national body could raise competition issues; the regulations are silent on that.

This is a compilation of the Electricity Industry (Independent Market Operator) Repeal Regulations 2018 as at 27 April 2018 (the gazettal date). The compilation table lists only the original regulations; there have been no amending regulations. The regulations were gazetted on 27 April 2018 and commenced in two stages: Part 1 commenced on that day, and the remainder on 28 April 2018. No subsequent amendments have been made. Therefore, the amendment history is a blank slate. The regulations are themselves transitional and are designed to be repealed once the winding‑up is complete (reg 18). At the time of writing, it is unclear whether the regulations have been repealed yet. The source does not provide any subsequent amendment information. Because the regulations are self‑contained and not part of a larger amending scheme, there is no history of insertion or deletion of provisions. The regulations are a one‑off response to the abolition of the IMO.

The source text does not mention any litigation history, nor does it name any cases. No cases are cited in the regulations. The regulations operate by conferring broad discretions and immunities, which may reduce the likelihood of successful litigation by market participants or former officeholders. However, the absence of litigation history in the source does not mean no litigation has occurred; it simply means no case law is referenced in the instrument itself. Potential areas for legal challenge include: the Minister’s directions on assets and liabilities (reg 7) if a market participant claims that a direction is ultra vires or procedurally unfair (though the only procedural requirement is to give a copy to interested persons “to the extent practicable”). The reporting officer’s determination of surplus or deficit under reg 10 could be challenged if it is not made in accordance with the WEM rules or GSI rules, but the regulations provide no internal review mechanism. The $10,000 penalty for non‑production of records could be challenged on grounds of unreasonableness or excessive delegation of power, but the courts typically defer to regulatory access powers. The immunity in reg 16 from breach of contract claims could be tested if a counterparty argues that the provision constitutes an acquisition of property without just terms under the WA Constitution or the Commonwealth Constitution. The State might argue that the transfer of assets is a purely mechanical reallocation of assets of a dissolved statutory body, not an acquisition. The regulations do not contain any compensation provision, so if a court found that a right had been adversely affected, there could be a constitutional question. A former director might challenge the loss of office without compensation, but the regulations simply repeal the statute under which they held office; that is generally not compensable. The interaction with the State Records Act could produce disputes about whether records have been retained long enough to allow access for claims. Without specific case law cited, these are hypothetical. The regulations themselves do not create any right of action; they provide a defence to certain actions (reg 16). The regulations are a subordinate instrument, so they cannot override the Australian Constitution if a Commonwealth matter arises. Overall, the litigation risk is low for the administrator, but not zero, particularly if the Minister’s directions affect valuable contractual rights.

Several provisions warrant careful attention. First, the definitions of “asset”, “liability” and “right” are deliberately broad and include contingent, prospective, and unliquidated interests (reg 3(1)). This means that even a potential claim the IMO had not yet brought, or a debt not yet due, can be transferred or discharged by ministerial direction. A market participant with a cross‑claim against the IMO might find that the claim has been transferred to a successor entity with deeper pockets, or that the Minister has directed the liability to be discharged in a particular way. Second, the Minister can deal with residual assets and liabilities unilaterally; only liability directions require the Treasurer’s concurrence (reg 7(3)). There is no requirement to consult market participants or to hold a public process. The Minister’s power extends to specifying that agreements refer to the successor entity, which can change a counterparty’s contractual partner without consent (reg 7(5)(a)). The exclusion of instruments having legislative effect (reg 7(6)) means that any subordinate legislation that referenced the IMO is not automatically amended; that presumably must be done separately. Third, the immunity in reg 16 is very broad. It deems that no act or omission under the regulations amounts to a breach of contract, confidence, or civil wrong, and that it does not allow termination of an instrument. This can override standard change‑of‑control clauses, assignment prohibitions, and confidentiality obligations. A counterparty that thought it had a veto on assignment or a right to terminate upon dissolution of the IMO will find those rights statutorily extinguished. The immunity applies to “any act or omission under these regulations”, which includes the Minister’s directions, the delivery of records, and the closing of bank accounts. Fourth, the reporting officer’s access power under reg 13 is sweeping. Any person with IMO records must produce them on request, and there is no exception for legal professional privilege, confidentiality, or commercial sensitivity. The word “any person” is not limited to market participants or former IMO staff; it could include banks, lawyers, consultants, or even auditors. Failure to produce attracts a $10,000 fine. Fifth, the final reconciliation excludes “the equity of the State” (reg 10(3)). This means that any surplus is calculated without regard to the State’s initial capital contribution or retained earnings. If the IMO had net assets at dissolution, those are treated as a surplus to be dealt with under the WEM and GSI rules, not as State equity to be returned to consolidated revenue. Conversely, if there is a deficit, the State’s equity is ignored, so market participants may bear the full shortfall without any offset from the State’s investment. Sixth, the dissolution of the IMO occurs at the end of a day fixed by the Minister, and the Minister can also fix a day for the repeal of these regulations themselves (reg 18). There is no statutory deadline for either action; the Minister acts when satisfied there is no reason to continue. That could be years later, leaving the reporting officer in office indefinitely. Market participants face uncertainty about when the transitional period will end and whether any residual claims will be finalised promptly. Seventh, the reporting officer is not required to publish the final report or the reconciliation determination. The only obligation is to give it to the Minister (reg 9(1)). Market participants may never see the detailed calculations that lead to a surplus distribution or deficit call. Finally, the survival of the IMO for transitional purposes (reg 6) means that, during the winding‑up period, the IMO technically exists but without any board or CEO. The reporting officer acts as the governing body. It is unclear whether the IMO can be sued during that period, and if so, whether the Minister or the State is the proper defendant. The regulations provide that proceedings may be commenced against the successor entity after transfer (reg 7(5)(b)), but before transfer the position is less clear.

Compliance obligations fall on different persons. For market participants, the key requirement is to respond promptly to any request from the reporting officer for information, documents or records under reg 13(3). A failure to produce can result in a $10,000 fine. Market participants should also monitor the WEM rules and GSI rules for any provisions concerning surplus distribution or deficit recovery that may arise from the final reconciliation (reg 10(4)). They may need to adjust their financial provisions or cash flow if a deficit call is expected. Market participants with existing contracts with the IMO should review reg 16 to understand that their contractual rights to terminate on change of control or assignment are overridden. They should not attempt to litigate against the IMO during the winding‑up period without considering whether the liability has been transferred to a successor entity and whether the Minister’s directions have altered the contractual framework. For any person in possession of IMO records (including former employees, contractors, and financial institutions), the compliance step is straightforward: upon written request from the reporting officer, produce the accounts, documents or records at a reasonable time. There is no exemption for confidentiality or privilege, so compliance cannot be avoided by claiming commercial sensitivity. A practical step would be to notify the reporting officer of the existence of such documents even before a request is made, to avoid any later adverse inference. For former directors and the chief executive officer, compliance is limited: they must vacate office automatically (reg 5) and should ensure they deliver any IMO documents in their personal possession to the reporting officer or the Minister. They are entitled to access records held by the Minister to defend claims against them (reg 14(2)), but they must make a specific request and explain the need. They should retain their own copies of any relevant documents as soon as possible. For AEMO, the function is to assist the reporting officer (reg 8(3)). AEMO should designate a contact person and be prepared to provide data, staff time, or systems access. Failure to assist could be judicially reviewed, but the regulations do not specify a penalty. For the reporting officer, compliance involves a series of steps: (a) prepare and give the final report to the Minister (reg 9); (b) determine surplus/deficit in accordance with the WEM and GSI rules (reg 10); (c) close bank accounts when no longer needed (reg 11); (d) deliver all IMO records to the Minister (reg 14(1)); and (e) exercise access powers under reg 13 as needed. The reporting officer should keep a log of all requests for information and the responses received, and should obtain legal advice if a person resists production. The officer should ensure that any directions from the Minister are in writing and that copies are given to interested persons where practicable (reg 7(7)). Finally, the reporting officer should inform the Minister once all winding‑up activities are complete so that the Minister can fix a dissolution day under reg 12 and later a repeal day under reg 18. For the Minister, compliance involves making the necessary designations and directions in writing, obtaining the Treasurer’s concurrence for liability directions, and ensuring the regulations are published in the Gazette for the dissolution and repeal notices. The Minister should also ensure that access rights under reg 14 are facilitated, and that a copy of the final report is retained.