This Act creates and defines State‑owned electricity generation, transmission and distribution corporations, sets their commercial objectives and core functions, and applies bespoke governance rules (including permitting a single joint board for distributors). It authorises ancillary activities (eg telecommunications, carbon rights), restricts share sales to eligible Ministers, and gives Ministers and the Governor powers to create, rename, dissolve or transfer staff/assets/liabilities (with automatic vesting). It modifies how the general State Owned Corporations Act applies and includes transitional provisions.
The Energy Services Corporations Act 1995 constitutes statutory State owned corporations to carry out the core activities of electricity generation, transmission and distribution while subjecting them to a modified version of the governance regime contained in the State Owned Corporations Act 1989.
Part 2 constitutes electricity generators on the commencement day by reference to the corporate names listed in Part 1 of Schedule 1 (s 4). Part 2A, inserted in 1998, constitutes energy transmission operators by reference to Part 1A of Schedule 1 (s 6A). Part 3 constitutes energy distributors by reference to Part 2 of Schedule 1 (s 7). Each class is collectively termed an “energy services corporation” (s 3(1)).
The principal objectives of each class are stated in detail and declared to be of equal importance (s 5(2), s 6B(2), s 8(2)). For generators these include commercial success, environmental protection by reference to the principles of ecologically sustainable development in s 6(2) of the Protection of the Environment Administration Act 1991, regional development responsibilities, operation of safe and reliable generating facilities, efficient supply, and successful participation in the wholesale electricity market (s 5(1)). Transmission operators have a parallel set of objectives with an additional emphasis on promoting effective access to transmission facilities and a special objective to minimise the environmental impact on land of easement activities while remaining bound by native vegetation, soil conservation and easement management laws (s 6B(3)). Distributors’ objectives extend to retail market participation and the provision of services relating to energy use and conservation (s 8(1)(e)–(f)).
The principal functions mirror the objectives. Generators may establish, maintain and operate generating facilities and supply electricity and other energy (s 6(2)). Transmission operators may establish and operate transmission facilities and provide transmission services in accordance with the relevant regulatory regime; they are also expressly permitted to use those facilities for telecommunications services, including attaching cables, operating the infrastructure for telecom purposes and exercising easement powers for that function (s 6C(2)–(2D)). Distributors may establish distribution facilities, supply energy and conservation services, and must, when procuring energy, consider renewable sources and environmental impacts (s 9(4)). All three classes may undertake ancillary activities and any other business that furthers their objectives (ss 6(3), 6C(3), 9(3)). They may also acquire, hold, sell or trade carbon sequestration rights within the meaning of s 87A of the Conveyancing Act 1919 (ss 6(3A), 9(3A)).
Current sections
Direct links to the current provisions in Energy Services Corporations Act 1995.
This Act commences on a day or days to be appointed by proclamation.
3
Interpretation
3 Interpretation
3 Interpretation
(1) In this Act:
electricity generator means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 1 of Schedule 1.
energy distributor means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 2 of Schedule 1.
energy services corporation means an electricity generator, an energy transmission operator or an energy distributor.
energy transmission operator means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 1A of Schedule 1.
Note—
The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act.
(2) Words and expressions used in this Act and also in the State Owned Corporations Act 1989 have the same meanings in this Act as they have in that Act.
(3) Notes included in this Act do not form part of this Act.
s 3: Am 1998 No 68, Sch 1 [2] [3]; 2000 No 88, Sch 1 [1].
Part 2
Electricity generators
Part 2 Electricity generators
Part 2 Electricity generators
4
Establishment of statutory State owned corporations
4 Establishment of statutory State owned corporations
4 Establishment of statutory State owned corporations
On the day on which this section commences:
(a) corporations are constituted by this Act under each of the corporate names listed in Part 1 of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, each of the corporate names listed in Part 1 of Schedule 1.
5
Principal objectives of electricity generators
5 Principal objectives of electricity generators
5 Principal objectives of electricity generators
(1) The principal objectives of an electricity generator are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the generation of electricity,
(e) to be an efficient and responsible supplier of electricity,
(f) to be a successful participant in the wholesale market for electricity.
(2) Each of the principal objectives of an electricity generator is of equal importance.
(1) An electricity generator has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an electricity generator are:
(a) to establish, maintain and operate facilities for the generation of electricity and other forms of energy, and
(b) to supply electricity and other forms of energy to other persons and bodies.
(3) An electricity generator:
(a) may also provide facilities or services that are ancillary or incidental to its principal functions, and
(b) may also conduct any business (whether or not related to its principal functions) that it considers will further its objectives.
(3A) An electricity generator may acquire, hold, sell or otherwise deal with or trade in carbon sequestration rights within the meaning of section 87A of the Conveyancing Act 1919.
(4) This section does not limit the functions of an electricity generator apart from this section, but is subject to the provisions of this Act, the State Owned Corporations Act 1989 and any other Act or law.
s 6: Am 1998 No 124, Sch 3 [1].
Part 2A
Energy transmission operators
Part 2A Energy transmission operators
Part 2A Energy transmission operators
pt 2A: Ins 1998 No 68, Sch 1 [4].
6A
Establishment of statutory State owned corporations
6A Establishment of statutory State owned corporations
6A Establishment of statutory State owned corporations
On the day on which this section commences:
(a) a corporation is constituted by this Act under the corporate name listed in Part 1A of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, the corporate name listed in Part 1A of Schedule 1.
s 6A: Ins 1998 No 68, Sch 1 [4].
6B
Principal objectives of energy transmission operators
6B Principal objectives of energy transmission operators
6B Principal objectives of energy transmission operators
(1) The principal objectives of an energy transmission operator are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the transmission of electricity and other forms of energy,
(e) to promote effective access to those transmission facilities.
(2) Each of the principal objectives of an energy transmission operator is of equal importance.
(3) Without limiting subsection (1) (b), in implementing the principal objectives set out in subsection (1), an energy transmission operator has the special objective of minimising the environmental impact on land of activities authorised by easements for transmission facilities created in favour of the energy transmission authority. In implementing this special objective, the transmission operator is bound by all relevant laws (such as those concerning native vegetation, soil conservation and easement management) applying at the time.
(1) An energy transmission operator has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an energy transmission operator are:
(a) to establish, maintain and operate facilities for the transmission of electricity and other forms of energy, and
(b) to provide services for the transmission of electricity and other forms of energy in accordance with the relevant regulatory regime.
(2A) An energy transmission operator may also utilise and develop its facilities for the transmission of electricity to carry out telecommunications services (the telecommunications function).
(2B) Without limiting subsection (2A), in exercising the telecommunications function, an energy transmission operator may do any of the following:
(a) install a telecommunications cable or equipment by attaching it to, or incorporating it in, any of its facilities for the transmission of electricity,
(b) remove any telecommunications cables or equipment so installed,
(c) operate and carry out work relating to telecommunications cables so installed,
(d) operate those facilities for the transmission of electricity for the purposes of telecommunications.
(2C) Any power or right that an energy transmission operator has under an affected easement with respect to the exercise of its principal functions is taken to extend to the exercise of the telecommunications function.
(2D) Divisions 2 and 3 of Part 5 of the Electricity Supply Act 1995 apply to and in respect of the exercise by an energy transmission operator of the telecommunications function as if the references in those Divisions to electricity works included references to telecommunications works.
Note—
An energy transmission operator, may, for example, for the purposes of exercising its telecommunications function, exercise powers of entry under, and in accordance with, Division 3 of Part 5 of the Electricity Supply Act 1995.
(3) An energy transmission operator:
(a) may also provide facilities and services that are ancillary or incidental to its principal or telecommunications functions, and
(b) may also conduct any business (whether or not related to its principal or telecommunications functions) that it considers will further its objectives.
(4) This section does not limit the functions of an energy transmission operator apart from this section, but is subject to the provisions of this Act, the State Owned Corporations Act 1989 and any other Act or law.
(5) In this section:
affected easement means any easement (whether created statutorily or otherwise):
(a) acquired (whether by agreement or compulsorily) before the commencement of this paragraph, or
(b) acquired compulsorily after the commencement of this paragraph.
s 6C: Ins 1998 No 68, Sch 1 [4]. Am 2000 No 88, Sch 1 [2]–[5].
s 6C, note: Ins 2000 No 88, Sch 1 [2].
Part 3
Energy distributors
Part 3 Energy distributors
Part 3 Energy distributors
7
Establishment of statutory State owned corporations
7 Establishment of statutory State owned corporations
7 Establishment of statutory State owned corporations
On the day on which this section commences:
(a) corporations are constituted by this Act under each of the corporate names listed in Part 2 of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, each of the corporate names listed in Part 2 of Schedule 1.
8
Principal objectives of energy distributors
8 Principal objectives of energy distributors
8 Principal objectives of energy distributors
(1) The principal objectives of an energy distributor are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the distribution of electricity and other forms of energy,
(e) to be an efficient and responsible supplier of electricity and other forms of energy and of services relating to the use and conservation of electricity and other forms of energy,
(f) to be a successful participant in the wholesale and retail markets for electricity and other forms of energy and for services relating to the use and conservation of electricity and other forms of energy.
(2) Each of the principal objectives of an energy distributor is of equal importance.
(1) An energy distributor has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an energy distributor are:
(a) to establish, maintain and operate facilities for the distribution of electricity and other forms of energy, and
(b) to supply electricity and other forms of energy, and services relating to the use and conservation of electricity and other forms of energy, to other persons and bodies.
(3) An energy distributor:
(a) may also provide facilities or services that are ancillary or incidental to its principal functions, and
(b) may also conduct any business (whether or not related to its principal functions) that it considers will further its objectives.
(3A) An energy distributor may acquire, hold, sell or otherwise deal with or trade in carbon sequestration rights within the meaning of section 87A of the Conveyancing Act 1919.
(4) In seeking to obtain electricity and other forms of energy, an energy distributor should consider:
(a) all sources of energy, with particular regard to energy that has been produced from renewable energy reserves, and
(b) the likely impact on the environment of the means by which energy from each such source is produced.
(5) An energy distributor should encourage users of electricity and other forms of energy:
(a) to use energy safely, efficiently and in a manner that minimises the adverse effects on the environment of their activities in their use of energy, and
(b) in particular, to observe safe procedures in the operation of electrical installations and electrical articles.
(6) An energy distributor should promote public awareness of the dangers that can arise from damaging or coming into contact with works used in connection with the distribution of electricity and other forms of energy.
(7) This section does not limit the functions of an energy distributor apart from this section, but is subject to the provisions of this Act, the State Owned Corporations Act 1989 and any other Act or law.
s 9: Am 1998 No 124, Sch 3 [2].
9A
Joint board of energy distributors
9A Joint board of energy distributors
9A Joint board of energy distributors
(1) Each of the energy distributors is to have the same board of directors and for that purpose there is to be a single board (referred to in this Act as the joint board of the energy distributors) that is to constitute the board of directors of each of the energy distributors.
(2) The joint board is to act in the best interests of energy distributors as a combined operation (as if their individual businesses were being operated as parts of a single enterprise) even if acting in that way is not in the best interests of one or more individual energy distributors.
(3) A reference in this Act, the State Owned Corporations Act 1989 or the constitution of an energy distributor to the voting shareholders is, in connection with the joint board of the energy distributors, a reference to the voting shareholders of all the energy distributors.
s 9A: Ins 2013 No 33, Sch 1 [1].
9B
Directions affecting commercial interests of energy distributors
9B Directions affecting commercial interests of energy distributors
9B Directions affecting commercial interests of energy distributors
(1) An energy distributor is not entitled to be reimbursed under section 20N of the State Owned Corporations Act 1989 in connection with compliance with a direction under that section that is not in the commercial interests of the energy distributor if the direction is in the combined commercial interests of energy distributors.
(2) If the direction is not in the combined commercial interests of energy distributors, any amount that the energy distributor is entitled to be reimbursed in connection with compliance with the direction is to be reduced by the amount of the net benefit accruing to any other energy distributor as a result of compliance with the direction.
(3) A direction is considered to be in the combined commercial interests of energy distributors if the joint board of the energy distributors considers that compliance with the direction would be in the commercial interests of a single enterprise that comprised the individual businesses of the energy distributors being operated as part of that single enterprise.
s 9B: Ins 2013 No 33, Sch 1 [1].
Part 4
Miscellaneous
Part 4 Miscellaneous
Part 4 Miscellaneous
10
Constitution and procedure of energy services corporations
10 Constitution and procedure of energy services corporations
10 Constitution and procedure of energy services corporations
(1) Schedule 2 has effect with respect to the constitution and procedure of an energy services corporation.
(2) The provisions of Schedule 2 are in addition to and (except to the extent to which that Schedule provides) do not derogate from the provisions of the State Owned Corporations Act 1989.
11
Prohibition on privatisation of energy services corporations
11 Prohibition on privatisation of energy services corporations
11 Prohibition on privatisation of energy services corporations
(1) Shares in an energy services corporation may not be sold or otherwise disposed of except to eligible Ministers.
(2) The following Ministers may not be nominated as eligible Ministers for an energy services corporation:
Variation of names of energy services corporations
12 Variation of names of energy services corporations
12 Variation of names of energy services corporations
The Governor may, by regulation, amend Part 1, 1A or 2 of Schedule 1 so as to vary the name of an energy services corporation.
s 12: Am 1998 No 68, Sch 1 [5].
13
Creation of additional energy services corporations
13 Creation of additional energy services corporations
13 Creation of additional energy services corporations
(1) The Governor may, by regulation, amend Part 1, 1A or 2 of Schedule 1 so as to add the corporate names of one or more additional corporations to be constituted by this Act.
(2) A regulation under this section takes effect on the day following the last day on which it is capable of being disallowed under section 41 of the Interpretation Act 1987 (as modified by subsection (3)) or on such later day as may be specified in the regulation.
(3) Despite section 41 of the Interpretation Act 1987, a resolution by a House of Parliament to disallow a regulation under this section does not have effect unless the resolution is passed within 15 sitting days of the House after written notice of the making of the regulation is laid before that House under section 40 of that Act.
(4) On the day on which a regulation under this section takes effect:
(a) corporations are constituted by this Act under each of the corporate names given to them by the regulation, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, each of the corporate names given to the corporations by the regulation.
s 13: Am 1998 No 68, Sch 1 [6].
14
Dissolution of existing energy services corporations
14 Dissolution of existing energy services corporations
14 Dissolution of existing energy services corporations
(1) The Governor may, by regulation, amend Part 1, 1A or 2 of Schedule 1 by omitting the corporate names of one or more energy services corporations to be dissolved by this Act.
(2) A regulation under this section takes effect on the day following the last day on which it is capable of being disallowed under section 41 of the Interpretation Act 1987 (as modified by subsection (3)) or on such later day as may be specified in the regulation.
(3) Despite section 41 of the Interpretation Act 1987, a resolution by a House of Parliament to disallow a regulation under this section does not have effect unless the resolution is passed within 15 sitting days of the House after written notice of the making of the regulation is laid before that House under section 40 of that Act.
(4) On the day on which a regulation under this section takes effect:
(a) the energy services corporations whose corporate names are omitted by the regulation are dissolved, and
(5) The regulations may contain provisions of a savings or transitional nature consequent on the dissolution of an energy services corporation under this section.
(6) Any such provision may, if the regulations so provide, take effect from the day on which the energy services corporation is dissolved or a later day.
(7) To the extent to which any such provision takes effect from a date that is earlier than the date of its publication in the Gazette, the provision does not operate so as:
(a) to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its publication, or
(b) to impose liabilities on any person (other than the State or an authority of the State) in respect of anything done or omitted to be done before the date of its publication.
s 14: Am 1998 No 68, Sch 1 [7].
15
Transfer of staff, assets, rights and liabilities of dissolved energy services corporations
15 Transfer of staff, assets, rights and liabilities of dissolved energy services corporations
15 Transfer of staff, assets, rights and liabilities of dissolved energy services corporations
(1) The Minister may direct, by order in writing, that any specified staff, assets, rights or liabilities of an energy services corporation that has been dissolved by this Act be transferred to such other energy services corporation, or to such other person or body acting on behalf of the Crown, as is specified in the order.
(2) Such an order may be made on such terms and conditions as are specified in the order.
(3) Schedule 3 applies to the transfer of staff, assets, rights or liabilities under this section.
16
Service of documents on energy services corporations
16 Service of documents on energy services corporations
16 Service of documents on energy services corporations
(1) A document may be served on an energy services corporation by leaving it at, or by sending it by post to:
(a) the office of the energy services corporation, or
(b) if it has more than one office, any one of its offices.
(2) Nothing in this section affects the operation of any other Act or law, or of any rules of court, that authorise a document to be served on an energy services corporation in any other manner.
17
Regulations
17 Regulations
17 Regulations
The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(1) The Minister is to review this Act to determine whether the policy objectives of the Act remain valid and whether the terms of the Act remain appropriate for securing those objectives.
(2) The review is to be undertaken as soon as possible after the period of 5 years from the date of assent to this Act.
(3) A report on the outcome of the review is to be tabled in each House of Parliament within 12 months after the end of the period of 5 years.
Schedule 1
Energy services corporations
Schedule 1 Energy services corporations
Schedule 1 Energy services corporations
(Sections 4, 7, 12, 13, 14)
sch 1: Am GG No 26 of 1.3.1996, p 833; GG No 63 of 24.5.1996, p 2634; GG No 89 of 26.7.1996, p 4362; GG No 91 of 2.8.1996, p 4456; 1998 No 68, Sch 1 [8]; GG No 59 of 19.5.2000, p 4110; 2000 No 102, Sch 2 [1]; GG No 89 of 25.5.2001, pp 2878, 2880; 2005 (129), cl 4; 2011 (105), cl 3 (1)–(3); 2015 (83), cl 3; 2015 No 5, Sch 8.11; 2016 (691), cl 3; 2017 No 22, Sch 1.6 [1] [2]; 2017 No 63, Sch 1.8.
Part 1A
Energy transmission operators
Part 1A Energy transmission operators
Part 1A Energy transmission operators
Schedule 2
Supplementary provisions concerning constitution and procedure
Schedule 2 Supplementary provisions concerning constitution and procedure
Schedule 2 Supplementary provisions concerning constitution and procedure
(Section 10)
sch 2: Am 1996 No 30, Sch 1.17 [1]–[3]; 2000 No 102, Sch 2 [2]; 2002 No 53, Sch 1.6; 2005 No 64, Sch 2.12 [1] [2]; 2013 No 33, Sch 1 [2]–[4]; 2013 No 36, Sch 2.1 [1]–[5]; 2015 No 15, Sch 3.24.
3A
Ministerial directions in the public interest
3A Ministerial directions in the public interest
3A Ministerial directions in the public interest
(1) This clause applies to Australian Inland Energy Water Infrastructure in relation only to the exercise of its functions under the Water Supply Authorities Act 1987.
(2) A direction may be given to Australian Inland Energy Water Infrastructure under section 20P of the State Owned Corporations Act 1989 without compliance with subsection (3) of that section if the portfolio Minister decides that this action is warranted on grounds involving urgency, public health or public safety.
(3) The notice referred to in section 20P of the State Owned Corporations Act 1989 is to include a statement of the reasons for that decision.
(4) The portfolio Minister is to publish in the Gazette (and is to make available on the Internet) any direction under section 20P of the State Owned Corporations Act 1989, and any notification under section 20O of that Act, given to the board of Australian Inland Energy Water Infrastructure as soon as practicable after it is given.
Schedule 2A
Transferred provisions—dissolution of energy services corporations
Schedule 2A Transferred provisions—dissolution of energy services corporations
Schedule 2A Transferred provisions—dissolution of energy services corporations
sch 2A: Ins 2015 No 15, Sch 5.2 [1]. Am 2015 No 15, Sch 5.2 [2]–[10]; 2016 No 60, Sch 4.2 [1]–[9].
Schedule 3
Transfer of staff, assets, rights and liabilities
Schedule 3 Transfer of staff, assets, rights and liabilities
Schedule 3 Transfer of staff, assets, rights and liabilities
(Section 15, clauses 7, 12, 13A, 13D, 13F, 16 and 22 of Schedule 5)
sch 3: Am 1998 No 68, Sch 1 [9]; 2003 No 17, Sch 3.5 [1]; 2003 No 82, Sch 2.10; 2014 No 88, Sch 1.9 [1] [2].
Schedule 4
Schedule 4
Schedule 4 (Repealed)
sch 4: Am 1996 No 30, Sch 1.17 [4] [5]; 1997 No 55, Sch 5; 1998 No 68, Sch 1 [10]. Rep 1999 No 85, Sch 4.
Schedule 5
Savings, transitional and other provisions
Schedule 5 Savings, transitional and other provisions
Schedule 5 Savings, transitional and other provisions
(Section 20)
sch 5: Am 1996 No 121, Sch 1.4; 1998 No 68, Sch 1 [11]–[13]; 2000 No 88, Sch 1 [6] [7]; 2003 No 17, Sch 3.5 [2] [3]; 2004 No 55, Sch 3; 2013 No 33, Sch 1 [5] [6]; 2014 No 88, Sch 1.9 [3].
Division 1
Division 1
Division 1
2–5 (Repealed)
Division 2
Provisions relating to former distributors
Division 2 Provisions relating to former distributors
Division 2 Provisions relating to former distributors
Division 2A
Provisions consequent on enactment of the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998
Division 2A Provisions consequent on enactment of the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998
Transfer of assets, rights and liabilities of former Authority
13A Transfer of assets, rights and liabilities of former Authority
13A Transfer of assets, rights and liabilities of former Authority
(1) The Minister may direct, by order in writing:
(a) that all assets, rights and liabilities of the former Authority, or
(b) that any specified assets, rights and liabilities of the former Authority, or
(c) that all assets, rights and liabilities of the former Authority other than those specified,
be transferred to TransGrid.
(2) The Minister may also direct, by order in writing, that any specified assets, rights and liabilities of the former Authority be transferred to any other person or body acting on behalf of the Crown as is specified in the order.
(3) An order under this clause may be made on such terms and conditions as are specified in the order.
(4) Schedule 3 applies to a transfer of assets, rights and liabilities under this clause.
(5) Section 20C of the State Owned Corporations Act 1989 does not apply to the assets, rights or liabilities of the former Authority.
13B
Part-time directors and Chairperson of Board of former Authority
13B Part-time directors and Chairperson of Board of former Authority
13B Part-time directors and Chairperson of Board of former Authority
(1) The part-time directors of the Board of the former Authority become, on the dissolution of the former Authority, directors of the Board of TransGrid.
(2) Those directors are taken to have been appointed to the Board of TransGrid for a term of one year from that dissolution.
(3) The part-time director referred to in section 16 (2) (c) of the former Act is taken to have been appointed as the director referred to in clause 1 (2) (b) of Schedule 2 to this Act.
(4) The part-time director who was, on the dissolution of the former Authority, the Chairperson of the Board of the former Authority is taken to have been appointed as the chairperson of the Board of TransGrid.
13C
Chief Executive of former Authority
13C Chief Executive of former Authority
13C Chief Executive of former Authority
(1) The Chief Executive of the former Authority (if any) becomes, on the dissolution of the former Authority, the chief executive officer of TransGrid for the residue of his or her term of office as, and subject to the same conditions (including conditions as to remuneration) as those of his or her appointment as, Chief Executive of the former Authority.
(2) The other provisions of clause 2 of Schedule 2 apply to a chief executive officer taken to be appointed in accordance with this clause.
13D
Transfer of staff
13D Transfer of staff
13D Transfer of staff
(1) All former staff are transferred to TransGrid on the dissolution of the former Authority.
(2) Schedule 3 applies to a transfer of staff under this clause.
13E
Special provision relating to former public sector executive officers
13E Special provision relating to former public sector executive officers
13E Special provision relating to former public sector executive officers
(1) This clause applies to a person to whom clause 13C or 13D applies who held an executive position under Part 2A of the Public Sector Management Act 1988 immediately before the dissolution of the former Authority.
(2) Any such person is not entitled to exercise a right of return to the public sector under section 42R, or to seek compensation under section 42S, of the Public Sector Management Act 1988:
(a) on ceasing to hold the executive position on the dissolution of the former Authority, or
(b) on ceasing to be employed by TransGrid.
(3) This clause applies despite anything to the contrary in this Act.
13F
Dissolution of Electricity Transmission Authority
13F Dissolution of Electricity Transmission Authority
13F Dissolution of Electricity Transmission Authority
(1) The former Authority is dissolved.
(2) The assets, rights and liabilities (if any) of the former Authority immediately before its dissolution are by this clause transferred to the Ministerial Holding Corporation established under section 37B of the State Owned Corporations Act 1989, if any such assets, rights or liabilities remain after the operation of any order under clause 13A that takes effect on or before its dissolution.
(3) On and from the dissolution of the former Authority, TransGrid is taken for all purposes, including the rules of private international law, to be a continuation of, and the same legal entity as, the former Authority.
13G
Variation of timetable for first statement of corporate intent
13G Variation of timetable for first statement of corporate intent
13G Variation of timetable for first statement of corporate intent
(1) A period within which any matter is required to be done under section 21 of the State Owned Corporations Act 1989 in connection with the first statement of corporate intent of TransGrid may be extended by the voting shareholders of TransGrid.
(2) The voting shareholders of TransGrid may also dispense with the need for the first statement of corporate intent to cover a specified period after the commencement of this clause or may direct that any such period be added to the period covered by the first statement of corporate intent.
13H
Special provisions applying if this Act commences before commencement of national market in electricity
13H Special provisions applying if this Act commences before commencement of national market in electricity
13H Special provisions applying if this Act commences before commencement of national market in electricity
(1) This clause applies if the former Act is repealed before the commencement of the National Electricity (NSW) Law and applies until such time as that Law commences.
(2) In this clause, a reference to the alternative Market and System Operator is a reference to the eligible person appointed (instead of TransGrid) as the Market and System Operator for the purposes of the Electricity Supply Act 1995 under section 77 (2) of that Act.
(3) The Minister may, by order, transfer to the alternative Market and System Operator specified employees of TransGrid. The transferred employees remain employees of TransGrid and are merely seconded to the alternative Market and System Operator.
(4) The Minister may, after consultation with the Treasurer, give the Board of TransGrid a written direction with respect to the provision of facilities, services or information by TransGrid to the alternative Market and System Operator to enable the exercise of that Operator’s functions under the Electricity Supply Act 1995. The Board must ensure that any such direction is carried out.
(5) Sections 9 (1A), 11 and 38 (1) of the former Act continue to have effect, as if references to the former Authority were references to:
(a) TransGrid, and
(b) the alternative Market and System Operator.
(6) Section 98U (1) (o) of the Stamp Duties Act 1920 and paragraph (a) (viic) of the definition of excluded debit in section 3 (1) of the Debits Tax Act 1990 have effect as if a reference in those provisions to the former Authority were a reference to:
(a) TransGrid, and
(b) the alternative Market and System Operator.
Division 3
General
Division 3 General
Division 3 General
Part 5
Provisions consequent on repeal of Pacific Power (Dissolution) Act 2003 by Statute Law (Miscellaneous Provisions) Act (No 2) 2014
Part 5 Provisions consequent on repeal of Pacific Power (Dissolution) Act 2003 by Statute Law (Miscellaneous Provisions) Act (No 2) 2014
Dissolution of Residual Business Management Corporation
22 Dissolution of Residual Business Management Corporation
22 Dissolution of Residual Business Management Corporation
(1) The former authority is dissolved.
(2) The assets, rights and liabilities of the former authority immediately before its dissolution are transferred to the Crown by this clause.
(3) Despite clause 4 of Schedule 3, the transfer of assets, rights and liabilities under this clause takes effect on 8 January 2015.
(4) The SAS Trustee Corporation may, at the request of the Treasurer, debit all or part of the funds from an employer reserve of the former authority in an account established under section 81 of the Superannuation Administration Act 1996 and credit that amount to an employer reserve of the Crown established under that section.
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
Part 1 Preliminary
1 Name of Act
1 Name of Act
1 Name of Act
This Act is the Energy Services Corporations Act 1995.
2 Commencement
2 Commencement
2 Commencement
This Act commences on a day or days to be appointed by proclamation.
3 Interpretation
3 Interpretation
3 Interpretation
(1) In this Act:
electricity generator means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 1 of Schedule 1.
energy distributor means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 2 of Schedule 1.
energy services corporation means an electricity generator, an energy transmission operator or an energy distributor.
energy transmission operator means a corporation constituted by this Act, being a corporation whose corporate name is listed in Part 1A of Schedule 1.
Note—
The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act.
(2) Words and expressions used in this Act and also in the State Owned Corporations Act 1989 have the same meanings in this Act as they have in that Act.
(3) Notes included in this Act do not form part of this Act.
s 3: Am 1998 No 68, Sch 1 [2] [3]; 2000 No 88, Sch 1 [1].
Part 2 Electricity generators
Part 2 Electricity generators
Part 2 Electricity generators
4 Establishment of statutory State owned corporations
4 Establishment of statutory State owned corporations
4 Establishment of statutory State owned corporations
On the day on which this section commences:
(a) corporations are constituted by this Act under each of the corporate names listed in Part 1 of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, each of the corporate names listed in Part 1 of Schedule 1.
Governance is supplemented by Schedule 2, which provides for boards, chief executive officers and dividend schemes while disapplying several provisions of the State Owned Corporations Act 1989 (cll 1(8)–(9), 2(6), 4(3), 5). Since 2013 the three distributors have been required to share a single joint board that must act in the best interests of the distributors as a combined operation even where that is not in the interests of an individual distributor (s 9A). Directions given under s 20N of the State Owned Corporations Act 1989 that affect commercial interests are handled on a net combined basis rather than individually (s 9B).
Privatisation is prohibited: shares may be held only by eligible Ministers, and three specific Ministers (administering the Electricity Supply Act 1995, the Environmental Planning and Assessment Act 1979 and the Protection of the Environment Administration Act 1991) are barred from being nominated (s 11).
The Governor may vary corporate names or create or dissolve corporations by regulation (ss 12–14). Dissolution triggers transfer of staff, assets, rights and liabilities under Ministerial order to which Schedule 3 applies (ss 14–15). Schedule 3 contains standard vesting, continuity and stamp-duty exemption provisions that operate notwithstanding any contractual restrictions (cl 3).
Extensive savings and transitional provisions in Schedule 5 deal with the transfer of former electricity distributors and the Electricity Transmission Authority, the continuation of environmental impact statement processes, and the treatment of Pacific Power’s residual corporation. The Act therefore does not merely establish entities; it provides a standing statutory framework for ongoing structural change in the NSW publicly owned energy sector.
Who it affects
The legislation directly constitutes and binds the corporations whose names appear in Schedule 1. As at the latest amendments these are TransGrid (the sole energy transmission operator listed in Part 1A), the electricity generators (if any remain listed in Part 1), and the three major distributors—Ausgrid, Endeavour Energy and Essential Energy—listed in Part 2. Each is a statutory State owned corporation and therefore also subject to the State Owned Corporations Act 1989 except to the extent expressly modified.
The joint board of the energy distributors (s 9A) affects the three distributors collectively. Individual boards ceased to exist on the commencement of the 2013 amendments; the former Ausgrid board members became the first joint board (Sch 5 cl 19). The chief executive officers of each distributor sit on that joint board (Sch 2 cl 1(2A)).
Voting shareholders (the portfolio Minister and the Treasurer) exercise the powers that would ordinarily be exercised by shareholders of a company, including appointment and removal of directors (Sch 2 cl 1(6)), determination of the dividend scheme (Sch 2 cl 4(1)) and giving directions under the State Owned Corporations Act 1989. Three Ministers are excluded from being eligible Ministers for shareholding purposes (s 11(2)).
Staff transferred from former electricity distributors or the Electricity Transmission Authority are affected by the continuity of employment provisions in Schedule 3 cl 2 and the preservation of awards and agreements. Former public sector executive officers who became employees of TransGrid were barred from exercising return-to-service or compensation rights under the former Public Sector Management Act 1988 (Sch 5 cl 13E).
Customers, generators, retailers and other participants in the national electricity market are indirectly affected because the Act requires transmission operators to promote effective access (s 6B(1)(e)) and distributors to act as efficient and responsible suppliers in both wholesale and retail markets (s 8(1)(f)). Landowners whose land is subject to transmission or distribution easements are affected by the special environmental objective in s 6B(3) and the extension of easement powers to telecommunications works (s 6C(2C)–(2D)).
The Minister administering the Act may make orders transferring assets on dissolution (s 15) and is required to review the legislation every five years (s 21), although that review obligation is now historical. The Governor’s regulation-making powers to create, dissolve or rename corporations (ss 12–14) with a modified 15-sitting-day disallowance period affect the structure of the sector itself.
Key duties and rights
The principal objectives in ss 5, 6B and 8 are framed as duties of equal weight. The commercial success objective (operate at least as efficiently as comparable businesses, maximise the State’s net worth, exhibit social responsibility) sits alongside environmental, regional development and operational reliability objectives. Section 6B(3) adds a special, binding objective for transmission operators to minimise environmental impact on land while remaining subject to all relevant native vegetation, soil conservation and easement management laws. The legislation does not rank these objectives; breach of any could therefore ground judicial review or shareholder intervention.
Functions are both rights and duties. The principal functions in ss 6(2), 6C(2) and 9(2) are expressed as powers that must be exercised consistently with the objectives and the State Owned Corporations Act 1989 (ss 6(4), 6C(4), 9(7)). Ancillary powers are broadly worded: an energy services corporation “may also conduct any business (whether or not related to its principal functions) that it considers will further its objectives” (ss 6(3)(b), 6C(3)(b), 9(3)(b)). The explicit right to trade in carbon sequestration rights (ss 6(3A), 9(3A)) was added to enable participation in emerging environmental markets.
The joint board duty in s 9A(2) is striking: the board “is to act in the best interests of energy distributors as a combined operation (as if their individual businesses were being operated as parts of a single enterprise) even if acting in that way is not in the best interests of one or more individual energy distributors.” This overrides the ordinary fiduciary duty to the individual corporation and is reinforced by the reimbursement rules in s 9B that deny or reduce compensation under s 20N of the State Owned Corporations Act 1989 according to combined rather than individual commercial impact.
Rights of entry and other easement powers for telecommunications functions are deemed to be the same as for principal transmission functions and attract the operation of Divisions 2 and 3 of Part 5 of the Electricity Supply Act 1995 (s 6C(2D) and note). Distributors are under positive obligations to encourage safe and efficient energy use, promote public awareness of dangers from works, and consider renewable sources when procuring energy (s 9(4)–(6)).
Share-transfer rights are restricted: shares may not be sold or disposed of except to eligible Ministers (s 11(1)). Directors and chief executive officers may be removed by voting shareholders at any time for any or no reason (Sch 2 cll 1(6), 2(2)), a right that excludes ordinary company-law protections.
Penalties and enforcement
The Act itself contains no offence provisions or direct monetary penalties. Enforcement occurs through the governance and accountability mechanisms of the State Owned Corporations Act 1989 as modified.
The voting shareholders may remove directors or the chairperson without notice (Sch 2 cl 1(6)). The board may remove the chief executive officer after consultation with voting shareholders (Sch 2 cl 2(2)). Ministerial directions in the public interest under s 20P of the State Owned Corporations Act 1989 can be given to Australian Inland Energy Water Infrastructure (now part of Essential Energy) on an urgent basis without the usual consultation if public health or safety is involved (Sch 2 cl 3A).
Failure to pursue the principal objectives of equal importance (ss 5(2), 6B(2), 8(2)) could be relevant to whether the board has complied with its duty to act in accordance with the statement of corporate intent or with the statutory objectives. Non-compliance with the combined-interest rule in s 9A(2) would expose the joint board to shareholder intervention or, potentially, judicial review.
The prohibition on privatisation in s 11 is enforced by the statutory invalidity of any purported transfer of shares to non-eligible Ministers. Any attempt to sell shares otherwise would be of no legal effect.
Transfers of staff, assets, rights and liabilities on dissolution are effected by Ministerial order to which Schedule 3 applies. Clause 3(6) of Schedule 3 provides that no compensation is payable except to the extent the order itself provides, limiting litigation risk for the Crown. Stamp duty is expressly not chargeable on any such transfer or anything done in consequence (Sch 3 cl 6).
The Act’s enforcement therefore relies on Ministerial and shareholder oversight, board accountability under Part 4 of the State Owned Corporations Act 1989, and the statutory vesting and continuity rules rather than traditional regulatory penalties.
How it interacts with other laws
The Act is expressly parasitic on the State Owned Corporations Act 1989. Section 3(2) provides that words and expressions used in both Acts have the same meaning. Almost every substantive provision cross-references that Act and then carves out specific sections: s 20E (non-commercial activities) does not apply to any energy services corporation (ss 5(3), 6B(4), 8(3)); s 20N reimbursement is modified by s 9B; ss 20J, 20K and parts of Schedules 8 and 9 are disapplied for boards and chief executive officers (Sch 2 cll 1(8), 2(6)).
The Protection of the Environment Administration Act 1991 is incorporated by reference in the ecologically sustainable development objective (ss 5(1)(b), 6B(1)(b), 8(1)(b)) and in the special land-impact objective for transmission operators (s 6B(3)).
The Electricity Supply Act 1995 is engaged in two ways. Transmission operators must provide services “in accordance with the relevant regulatory regime” (s 6C(2)(b)), which includes the national electricity rules and the Electricity Supply Act. Divisions 2 and 3 of Part 5 of that Act (powers of entry and related matters) are applied to telecommunications works as if they were electricity works (s 6C(2D)).
The Conveyancing Act 1919 s 87A supplies the definition of carbon sequestration rights that may be traded (ss 6(3A), 9(3A)). The Interpretation Act 1987 applies to the interpretation of the Act (s 3(1) note) and supplies the modified disallowance regime for regulations made under ss 13 and 14 (15 sitting days instead of the usual period).
Schedule 5 contains extensive interaction with repealed legislation: the Electricity Act 1945 (former distributors), the Electricity Transmission Authority Act 1994 (TransGrid’s predecessor), and the Pacific Power (Dissolution) Act 2003. Former distributors and the former Authority are deemed to continue as the new corporations for the purposes of private international law and pending proceedings (Sch 5 cll 12(3), 13F(3)).
The Environmental Planning and Assessment Act 1979 continues to apply to pending environmental impact statements as if the former distributor still existed (Sch 5 cl 11). Easement management laws are preserved and bind transmission operators when pursuing the special objective in s 6B(3).
The Government Sector Employment Act 2013 does not apply to chief executive officers (Sch 2 cl 2(4)). Superannuation continuity for transferred staff is preserved through specific debit and credit provisions to employer reserves (Sch 5 cl 22(4)).
Recent changes and why
The most significant recent structural change was the insertion of ss 9A and 9B by the Energy Services Corporations Amendment (Distributor Efficiency) Act 2013. The explanatory context within the Act itself is the desire to treat the three distributors as a single enterprise for governance purposes. The joint board must prefer combined commercial interests (s 9A(2)), and reimbursement for non-commercial directions is calculated on a net combined basis (s 9B). Transitional provisions ensured continuity of board actions and deemed the former Ausgrid board to be the first joint board (Sch 5 cll 19–20). This change was designed to drive efficiency savings in a maturing national electricity market where distribution networks faced pressure on costs and returns.
The addition of telecommunications functions to energy transmission operators occurred in 2000 (amending s 6C). The amendments validated prior acts and clarified that easement powers extend to telecom cables and equipment (s 6C(2A)–(2D)). The change reflected the convergence of electricity and communications infrastructure and the desire to monetise existing easements without new compulsory acquisitions.
Carbon sequestration rights were added in 1998 (ss 6(3A), 9(3A)) to give generators and distributors explicit authority to participate in emerging carbon markets. The special environmental objective for transmission operators (s 6B(3)) was also inserted in 1998 to address community concern about the visual and ecological impact of high-voltage lines on rural land while preserving existing legal obligations.
Schedule 2A, containing transferred dissolution provisions from repealed regulations, was inserted and amended between 2015 and 2016 to deal with the final wind-up of Australian Inland Energy Water Infrastructure and earlier distributor amalgamations. These provisions give Essential Energy universal successor status and the right to use former corporate seals and names in foreign jurisdictions (Sch 2A cll 1–2). They illustrate the Act’s continuing role as a standing vehicle for structural clean-up long after the initial 1995 corporatisation.
The regulation-making powers in ss 12–14 have been used on numerous occasions (see historical notes to Schedule 1) to rename entities, add new corporations or dissolve them. The modified 15-sitting-day disallowance period protects these structural changes from rapid parliamentary reversal.
Court challenges and controversies
The legislation itself does not record specific court decisions. However, several provisions are framed in ways that have obvious justiciable content. The requirement that all principal objectives are “of equal importance” (s 5(2), s 6B(2), s 8(2)) invites argument about whether a board that prioritises commercial returns over environmental or regional objectives has acted lawfully. No statutory hierarchy is provided, and the exclusion of s 20E of the State Owned Corporations Act 1989 removes the usual mechanism for ministerial direction on non-commercial matters, leaving the objectives to be policed through shareholder accountability or judicial review.
The joint board rule in s 9A(2) raises classic fiduciary tension. A director of the joint board who consciously disadvantages one distributor to benefit the group as a whole is statutorily required to do so. This overrides the common-law duty to act in the interests of the individual company of which the director is a board member. While the Act authorises the conduct, it does not expressly confer immunity from suit by minority shareholders or creditors of the disadvantaged distributor. The reimbursement adjustment in s 9B(2) (reduction by the net benefit to another distributor) is likely to generate accounting and valuation disputes.
The special objective in s 6B(3) binds transmission operators to minimise environmental impact on land “while remaining bound by all relevant laws”. The interaction between the statutory objective and existing easement covenants or native vegetation legislation has the potential to generate disputes about whether a particular route or maintenance practice satisfies both the objective and the underlying law.
Schedule 3 cl 3(2) provides that a transfer is not to be regarded as a breach of contract or confidence or as giving rise to any remedy for termination. This “no adverse consequence” clause has been used in successive restructures and is intended to prevent counterparties from claiming event-of-default or frustration. Its breadth has not been tested in reported decisions on this Act, but similar clauses in other NSW corporatisation statutes have generally been upheld.
The prohibition on privatisation (s 11) is absolute on its face. Any attempt to transfer shares otherwise than to eligible Ministers would be void. The exclusion of three environment and planning Ministers from eligibility reflects a deliberate policy to prevent capture by portfolios with strong green or planning agendas. This has not generated litigation but remains a live structural constraint on any future privatisation debate.
Transitional provisions deeming former authorities to continue as the same legal entity for private international law purposes (Sch 5 cll 12(3), 13F(3)) were designed to avoid complex choice-of-law problems in overseas contracts. Their practical operation has not been the subject of reported NSW case law.
Gotchas
Most practitioners assume that because these are State owned corporations the ordinary directors’ duties under the Corporations Act 2001 (Cth) apply. In fact the entities are constituted by statute and their governance is a hybrid of the State Owned Corporations Act 1989 and the specific modifications in Schedule 2. The disapplication of s 20E removes the usual ministerial power to direct non-commercial activities, yet the equal-importance objectives create a statutory overlay that is not present in ordinary corporate law.
The joint board obligation in s 9A(2) is one of the most radical provisions. Directors are statutorily required to prefer the interests of a notional single enterprise over the interests of the particular distributor that appointed them or on whose board they nominally sit. This is the opposite of the ring-fencing philosophy that applies to many other regulated businesses. Boards that continue to operate separate balance sheets and separate stakeholder engagement programs risk breaching the statutory duty.
Section 6C(2C) deems any power or right under an “affected easement” to extend to the telecommunications function. The definition of affected easement is broad (any easement acquired before or compulsorily after the commencement paragraph). Landowners and councils sometimes discover years later that fibre-optic cables have been strung on transmission towers pursuant to an easement granted decades earlier for electricity only. The Act provides no compensation mechanism for this expanded use.
Carbon sequestration rights can be traded by both generators and distributors (ss 6(3A), 9(3A)). Many compliance officers assume this is limited to offsets created on company-owned land. The statutory language is not so limited; rights can be acquired from third parties and traded, opening a secondary market that must still be consistent with the environmental objective.
The modified disallowance period in ss 13(3) and 14(3) means that a regulation creating or dissolving a corporation can take effect before Parliament has had a full opportunity to disallow it. The 15-sitting-day rule, combined with the back-dating protection in Sch 5 cl 1, gives the Executive unusually swift structural control.
Schedule 3 cl 3(2)(b) prevents any party from terminating a contract because beneficial ownership of an asset or liability has changed. Counterparties who negotiate change-of-control or assignment clauses in supply contracts with these corporations may find the clause is rendered ineffective by statute.
Finally, the review obligation in s 21, although now spent, required a report within 12 months after the five-year anniversary of assent. That report is not required to be updated; later amendments have therefore occurred without any fresh statutory policy review, creating a patchwork of objects and functions that no longer perfectly align with the national electricity market design.
How to comply
A practising lawyer or compliance professional advising an energy services corporation should maintain a compliance matrix that treats the principal objectives as non-hierarchical. Board papers should expressly address each objective in ss 5, 6B or 8 before major decisions. Minutes should record the equal weight given to environmental, social and regional considerations.
The joint board of distributors must adopt a single statement of corporate intent that reflects combined enterprise thinking. Separate board packs for individual distributors should be avoided; all decisions must be framed by reference to s 9A(2). When a Ministerial direction under s 20N of the State Owned Corporations Act 1989 is received, the joint board must assess combined commercial impact before claiming reimbursement. Internal transfer pricing or cost allocation models must be capable of demonstrating net benefit calculations required by s 9B(2).
Transmission operators exercising the telecommunications function must document that they are using only “affected easements” (s 6C(5)) and must comply with Divisions 2 and 3 of Part 5 of the Electricity Supply Act 1995 as if the works were electricity works. Notices to landowners should cite both the Energy Services Corporations Act and the Electricity Supply Act to avoid trespass claims.
When procuring energy, distributors must be able to demonstrate that they have considered all sources with particular regard to renewable energy reserves and have evaluated the environmental impact of production methods (s 9(4)). Procurement policies should require bidders to provide life-cycle carbon and ecological data.
Any proposal to trade carbon sequestration rights must be linked back to the environmental objective. Legal sign-off should confirm that the trade itself does not undermine the obligation to conduct operations in compliance with ecologically sustainable development principles.
Share registers must show that all shares are held only by eligible Ministers; any transfer to an excluded Minister is void. Company secretaries should maintain a standing register of permitted Ministers.
On dissolution or transfer, Schedule 3 must be followed meticulously. Vesting occurs automatically on the date specified in the Ministerial order (Sch 3 cl 4). No stamp duty is payable, but the Minister may specify a notional consideration and asset values (Sch 3 cl 5). Foreign counsel in jurisdictions that require formal conveyance should be instructed that Essential Energy (or the relevant successor) may act in the name of the dissolved predecessor and use its seal (Sch 2A).
Annual statements of corporate intent, board performance evaluations and dividend declarations must comply with the modified provisions of the State Owned Corporations Act 1989 set out in Schedule 2. The chief executive officer’s employment contract must be approved by the board after consultation with voting shareholders and must exclude the disapplied provisions of Schedule 9.
Finally, because the Act is regularly used as a vehicle for further structural change, compliance programs should include a watching brief on amendments to Schedule 1 and on regulations made under ss 12–14. The modified disallowance procedure means structural changes can occur with little notice.
Section 4Establishment of statutory State owned corporations
(1) The principal objectives of an electricity generator are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the generation of electricity,
(e) to be an efficient and responsible supplier of electricity,
(f) to be a successful participant in the wholesale market for electricity.
(2) Each of the principal objectives of an electricity generator is of equal importance.
(3) The provisions of section 20E of the State Owned Corporations Act 1989 do not apply to an electricity generator.
6 Functions of electricity generators
6 Functions of electricity generators
6 Functions of electricity generators
(1) An electricity generator has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an electricity generator are:
(a) to establish, maintain and operate facilities for the generation of electricity and other forms of energy, and
(b) to supply electricity and other forms of energy to other persons and bodies.
(3) An electricity generator:
(a) may also provide facilities or services that are ancillary or incidental to its principal functions, and
(b) may also conduct any business (whether or not related to its principal functions) that it considers will further its objectives.
(3A) An electricity generator may acquire, hold, sell or otherwise deal with or trade in carbon sequestration rights within the meaning of section 87A of the Conveyancing Act 1919.
(4) This section does not limit the functions of an electricity generator apart from this section, but is subject to the provisions of this Act, the State Owned Corporations Act 1989 and any other Act or law.
s 6: Am 1998 No 124, Sch 3 [1].
Part 2A Energy transmission operators
Part 2A Energy transmission operators
Part 2A Energy transmission operators
pt 2A: Ins 1998 No 68, Sch 1 [4].
6A Establishment of statutory State owned corporations
6A Establishment of statutory State owned corporations
6A Establishment of statutory State owned corporations
On the day on which this section commences:
(a) a corporation is constituted by this Act under the corporate name listed in Part 1A of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, the corporate name listed in Part 1A of Schedule 1.
s 6A: Ins 1998 No 68, Sch 1 [4].
6B Principal objectives of energy transmission operators
6B Principal objectives of energy transmission operators
6B Principal objectives of energy transmission operators
(1) The principal objectives of an energy transmission operator are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the transmission of electricity and other forms of energy,
(e) to promote effective access to those transmission facilities.
(2) Each of the principal objectives of an energy transmission operator is of equal importance.
(3) Without limiting subsection (1) (b), in implementing the principal objectives set out in subsection (1), an energy transmission operator has the special objective of minimising the environmental impact on land of activities authorised by easements for transmission facilities created in favour of the energy transmission authority. In implementing this special objective, the transmission operator is bound by all relevant laws (such as those concerning native vegetation, soil conservation and easement management) applying at the time.
(4) The provisions of section 20E of the State Owned Corporations Act 1989 do not apply to an energy transmission operator.
s 6B: Ins 1998 No 68, Sch 1 [4].
6C Functions of energy transmission operators
6C Functions of energy transmission operators
6C Functions of energy transmission operators
(1) An energy transmission operator has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an energy transmission operator are:
(a) to establish, maintain and operate facilities for the transmission of electricity and other forms of energy, and
(b) to provide services for the transmission of electricity and other forms of energy in accordance with the relevant regulatory regime.
(2A) An energy transmission operator may also utilise and develop its facilities for the transmission of electricity to carry out telecommunications services (the telecommunications function).
(2B) Without limiting subsection (2A), in exercising the telecommunications function, an energy transmission operator may do any of the following:
(a) install a telecommunications cable or equipment by attaching it to, or incorporating it in, any of its facilities for the transmission of electricity,
(b) remove any telecommunications cables or equipment so installed,
(c) operate and carry out work relating to telecommunications cables so installed,
(d) operate those facilities for the transmission of electricity for the purposes of telecommunications.
(2C) Any power or right that an energy transmission operator has under an affected easement with respect to the exercise of its principal functions is taken to extend to the exercise of the telecommunications function.
(2D) Divisions 2 and 3 of Part 5 of the Electricity Supply Act 1995 apply to and in respect of the exercise by an energy transmission operator of the telecommunications function as if the references in those Divisions to electricity works included references to telecommunications works.
Note—
An energy transmission operator, may, for example, for the purposes of exercising its telecommunications function, exercise powers of entry under, and in accordance with, Division 3 of Part 5 of the Electricity Supply Act 1995.
(3) An energy transmission operator:
(a) may also provide facilities and services that are ancillary or incidental to its principal or telecommunications functions, and
(b) may also conduct any business (whether or not related to its principal or telecommunications functions) that it considers will further its objectives.
(4) This section does not limit the functions of an energy transmission operator apart from this section, but is subject to the provisions of this Act, the State Owned Corporations Act 1989 and any other Act or law.
(5) In this section:
affected easement means any easement (whether created statutorily or otherwise):
(a) acquired (whether by agreement or compulsorily) before the commencement of this paragraph, or
(b) acquired compulsorily after the commencement of this paragraph.
s 6C: Ins 1998 No 68, Sch 1 [4]. Am 2000 No 88, Sch 1 [2]–[5].
s 6C, note: Ins 2000 No 88, Sch 1 [2].
Part 3 Energy distributors
Part 3 Energy distributors
Part 3 Energy distributors
7 Establishment of statutory State owned corporations
7 Establishment of statutory State owned corporations
7 Establishment of statutory State owned corporations
On the day on which this section commences:
(a) corporations are constituted by this Act under each of the corporate names listed in Part 2 of Schedule 1, and
(b) the State Owned Corporations Act 1989 is amended by inserting in Schedule 5, in alphabetical order, each of the corporate names listed in Part 2 of Schedule 1.
8 Principal objectives of energy distributors
8 Principal objectives of energy distributors
8 Principal objectives of energy distributors
(1) The principal objectives of an energy distributor are as follows:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses,
(ii) to maximise the net worth of the State’s investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the distribution of electricity and other forms of energy,
(e) to be an efficient and responsible supplier of electricity and other forms of energy and of services relating to the use and conservation of electricity and other forms of energy,
(f) to be a successful participant in the wholesale and retail markets for electricity and other forms of energy and for services relating to the use and conservation of electricity and other forms of energy.
(2) Each of the principal objectives of an energy distributor is of equal importance.
(3) The provisions of section 20E of the State Owned Corporations Act 1989 do not apply to an energy distributor.
9 Functions of energy distributors
9 Functions of energy distributors
9 Functions of energy distributors
(1) An energy distributor has the functions conferred or imposed on it by or under this or any other Act or law.
(2) The principal functions of an energy distributor are:
(a) to establish, maintain and operate facilities for the distribution of electricity and other forms of energy, and
(b) to supply electricity and other forms of energy, and services relating to the use and conservation of electricity and other forms of energy, to other persons and bodies.
(3) An energy distributor:
(a) may also provide facilities or services that are ancillary or incidental to its principal functions, and
(b) may also conduct any business (whether or not related to its principal functions) that it considers will further its objectives.
(3A) An energy distributor may acquire, hold, sell or otherwise deal with or trade in carbon sequestration rights within the meaning of section 87A of the Conveyancing Act 1919.
(4) In seeking to obtain electricity and other forms of energy, an energy distributor should consider:
(a) all sources of energy, with particular regard to energy that has been produced from renewable energy reserves, and
(b) the likely impact on the environment of the means by which energy from each such source is produced.
(5) An energy distributor should encourage users of electricity and other forms of energy:
(a) to use energy safely, efficiently and in a manner that minimises the adverse effects on the environment of their activities in their use of energy, and
(b) in particular, to observe safe procedures in the operation of electrical installations and electrical articles.
(6) An energy distributor should promote public awareness of the dangers that can arise from damaging or coming into contact with works used in connection with the distribution of electricity and other forms of energy.
(7) This section does not limit the functions of an energy distributor apart from this section, but is su
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