Part 3Gas supply industry

Part 3—Gas supply industry Division A1—Declaration as regulated industry 18B—Declaration as regulated industry The gas supply industry is declared to be a regulated industry for the purposes of the Essential Services Commission Act 2002. Division A2—Application of provisions 18C—Application of provisions Divisions 1, 3, 3B and 6 do not apply to a NERL retailer. Division 1—Licensing of gas entities 19—Requirement for licence A person must not carry on— (a) the operation of a distribution system; or (b) the retailing of gas; or (c) any other operation for which a licence is required by the regulations, unless the person holds a licence under this Part authorising the relevant operation. 20—Application for licence (1) An application for the issue of a licence must— (a) be made to the Commission in a form approved by the Commission; and (b) contain the information specified in the form. (2) The applicant must pay to the Commission an application fee fixed by the Minister of an amount that the Minister considers appropriate to meet the reasonable costs of determining the application. (3) The Commission may, as the Commission considers appropriate, accept a single application from an applicant in respect of different operations of the applicant or operations of the applicant at different locations or may require separate applications. (4) The applicant must give the Commission further relevant information requested by the Commission. 21—Consideration of application (1) The Commission must consider an application for the issue of a licence and may, subject to this Division, issue or refuse to issue the licence. (2) The Commission must have regard to the general factors specified in Part 2 of the Essential Services Commission Act 2002 and, subject to this section, may only issue a licence if satisfied that— (a) the applicant is a suitable person to hold the licence; and (b) in the case of a licence authorising the operation of a distribution system—the system has (or the proposed system will have) the necessary capacity for distributing gas safely; and (c) in the case of a licence authorising retailing of gas—the applicant will be able to meet reasonably foreseeable obligations under contracts for the sale of gas; and (d) in the case of a licence authorising other operations for which a licence is required under the regulations—the applicant meets any special requirements imposed by the regulations for the holding of the licence; and (e) in the case of a licence of any class—the grant of the licence would be consistent with criteria (if any) prescribed by regulation for a licence of the relevant class. (3) In deciding whether an applicant is a suitable person to hold a licence, the Commission may consider— (a) the applicant's previous commercial and other dealings and the standard of honesty and integrity shown in those dealings; and (b) the financial, technical and human resources available to the applicant; and (c) the officers and, if applicable, major shareholders of the applicant and their previous commercial and other dealings and the standard of honesty and integrity shown in those dealings (including breaches of statutory and other legal obligations); and (d) other matters prescribed by regulation. (4) If— (a) a person carries on or proposes to carry on operations for which a licence is required as agent of another person; and (b) the agent makes application for the issue of such a licence on the agent's own behalf and on behalf of the principal; and (c) the Commission is satisfied that the criteria for the issue of the licence are met in relation to the agent, the Commission may, at the Commission's discretion, dispense with the requirement that the Commission be satisfied that the criteria are met in relation to the principal and issue the licence to the agent and the principal to be held by them jointly. 21A—Licences may be held jointly (1) A licence may be held jointly by two or more persons. (2) If a licence is held jointly by two or more persons, those persons are jointly and severally liable to meet requirements imposed under this Act or the Essential Services Commission Act 2002. 22—Authority conferred by licence (1) A licence authorises the person named in the licence to carry on operations in accordance with the terms and conditions of the licence. (2) The operations authorised by a licence need not be all of the same character or at the same location but may consist of a combination of different operations or operations at different locations. 23—Term of licence A licence may be issued for an indefinite period or for a term specified in the licence. 24—Licence fees and returns (1) A person is not entitled to the issue of a licence unless the person first pays to the Commission the relevant annual licence fee, or the first instalment of the relevant annual licence fee, as the case may require. (2) The holder of a licence issued for a term of two years or more must— (a) in each year lodge with the Commission, before the date prescribed for that purpose, an annual return containing the information required by the Commission by condition of the licence or by written notice; and (b) in each year (other than a year in which the licence is due to expire) pay to the Commission, before the date prescribed for that purpose, the relevant annual licence fee, or the first instalment of the relevant annual licence fee, as the case may require. (3) The annual licence fee for a licence is the fee fixed, from time to time, by the Minister in respect of that licence as an amount that the Minister considers to be a reasonable contribution towards administrative costs. (4) The annual licence fee may, if the Commission so determines, be paid in equal instalments at intervals fixed by the Commission. (7) If the holder of a licence fails to lodge the annual return or pay the annual licence fee (or an instalment of the annual licence fee) in accordance with this section, the Commission may, by written notice, require the holder to make good the default and, in addition, to pay to the Commission the amount prescribed as a penalty for default. (8) An annual licence fee (including any instalment of an annual licence fee or any penalty for default) payable under this section is recoverable as a debt due to the Crown. (9) In this section— administrative costs means— (a) the costs of administration of this Act; and (b) any costs of administration of the Essential Services Commission Act 2002 relating to the gas supply industry; and (c) the costs of administration of the Gas Pipelines Access (South Australia) Act 1997; and (d) other costs prescribed by regulation; holder of a licence includes the holder of a licence that has been suspended. 25—Licence conditions (1) The Commission must make a licence subject to conditions determined by the Commission— (a) requiring compliance with applicable codes or rules made under the Essential Services Commission Act 2002 as in force from time to time; and (b) requiring compliance with specified technical or safety requirements or standards; and (c) relating to the gas entity's financial or other capacity to continue operations under the licence; and (d) requiring the gas entity to have all or part of the operations authorised by the licence audited and to report the results of the audit to the Commission; and (e) requiring the gas entity to notify the Commission about changes to officers and, if applicable, major shareholders of the entity; and (f) requiring the gas entity to provide, in the manner and form determined by the Commission, such other information as the Commission may from time to time require; and (g) requiring the gas entity to comply with the requirements of any scheme approved and funded by the Minister for the provision by the State of customer concessions or the performance of community service obligations by gas entities. (2) The Commission must make a licence subject to further conditions that the Commission is required by regulation to impose on the issue of such a licence. (3) The Commission may make a licence subject to further conditions considered appropriate by the Commission. (4) The Commission must provide to the Minister any information that the Minister requires for the purposes of the administration of a scheme for the provision by the State of customer concessions, or the performance of community service obligations, relating to the sale or supply of gas. 26—Licences authorising operation of distribution system (1) The Commission must make a licence authorising the operation of a distribution system subject to conditions determined by the Commission— (a) requiring compliance with the relevant parts of the National Gas Procedures (South Australia); and (b) requiring the gas entity— (i) to prepare, maintain and periodically revise a safety, reliability, maintenance and technical management plan dealing with matters prescribed by regulation; and (ii) to obtain the approval of the Technical Regulator— (A) to the plan (prior to the commencement of the operation of the distribution system to which the plan relates); and (B) to any revision of the plan; and (iii) to comply with the plan as approved from time to time; and (iv) to audit from time to time the entity's compliance with the plans and report the results of those audits to the Technical Regulator; and (c) requiring the gas entity to maintain specified accounting records and to prepare accounts according to specified principles; and (d) requiring the gas entity to participate in an ombudsman scheme— (i) that applies to the gas supply industry and to other regulated industries (within the meaning of the Essential Services Commission Act 2002) prescribed by regulation; and (ii) the terms and conditions of which are approved by the Commission; and (e) requiring the gas entity to monitor and report as required by the Commission on indicators of service performance determined by the Commission; and (f) requiring the gas entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) limiting the grounds on which the supply of gas to customers may be disconnected and prescribing the process to be followed before the supply of gas is disconnected; and (g) requiring a specified process to be followed to resolve disputes between the gas entity and customers as to the supply of gas. (2) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising the operation of a distribution system. 26A—Licences authorising retailing (2) The Commission must make a licence authorising the retailing of gas subject to conditions determined by the Commission— (a) requiring compliance with the relevant parts of the National Gas Procedures (South Australia); and (b) if the gas entity sells gas to customers of a prescribed class, requiring the entity to maintain specified accounting records and to prepare accounts according to specified principles; and (c) requiring the gas entity to establish customer consultation processes of a specified kind; and (d) requiring the gas entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002 on or before the prescribed date) relating to the provision of pricing information to enable small customers to compare competing offers in the retailing of gas; and (da) requiring the gas entity to include (in a print size and form prescribed by regulation) in each account for gas charges sent to a small customer information prescribed by regulation, including information relating to— (i) the customer's gas consumption during the preceding 12 months; and (ii) the entity's daily charges for gas during the period to which the account relates; and (iii) obtaining advice through the Commission about reducing gas consumption and about gas consumer choices; and (iv) greenhouse gas emissions associated with the customer's gas consumption; and (e) requiring the gas entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) relating to standard contractual terms and conditions to apply to the sale or supply of gas to small customers or customers of a prescribed class; and (f) requiring the gas entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) imposing minimum standards of service for customers that take into account relevant national benchmarks developed from time to time, and requiring the entity to monitor and report on levels of compliance with those minimum standards; and (g) requiring the gas entity to comply with code provisions as in force from time to time (which the Commission must make under the Essential Services Commission Act 2002) limiting the grounds on which the supply of gas to customers may be discontinued or disconnected and prescribing the process to be followed before the supply of gas is discontinued or disconnected; and (h) requiring a specified process to be followed to resolve disputes between the gas entity and customers as to the sale or supply of gas; and (i) if the gas entity sells gas to customers with an annual gas consumption level of less than the level prescribed, requiring the entity to participate in an ombudsman scheme— (i) that applies to the gas supply industry and to other regulated industries (within the meaning of the Essential Services Commission Act 2002) prescribed by regulation; and (ii) the terms and conditions of which are approved by the Commission. (3) This section does not limit the matters that may be dealt with by terms or conditions of a licence authorising the retailing of gas. 26B—Licence conditions and national energy laws Despite the preceding provisions of this Part, the Commission is not to impose a condition on a licence if the Commission is satisfied that the condition would duplicate, or be inconsistent with, regulatory requirements under the National Gas (South Australia) Act 2008, National Gas Rules, National Energy Retail Law (South Australia) or National Energy Retail Rules. 27—Offence to contravene licence conditions (1) A gas entity must not contravene a condition of its licence. (2) An offence against subsection (1) may be prosecuted as an indictable offence or a summary offence at the discretion of the prosecutor but, if prosecuted as a summary offence, the maximum penalty that may be imposed is a fine not exceeding $20 000. 29—Variation of licence (1) The Commission may vary the terms or conditions of a gas entity's licence by written notice to the entity. (2) A variation may only be made— (a) on application by the gas entity or with the gas entity's agreement; or (b) after giving the gas entity reasonable notice of the proposed variation and allowing the entity a reasonable opportunity to make representations about the proposed variation. 30—Transfer of licence (1) A licence may be transferred with the Commission's agreement. (2) The Commission may impose conditions on the transfer of a licence, or vary the terms and conditions of the licence on its transfer. (3) The Commission must not agree to the transfer of a licence if the transferee would not be entitled to the issue of the licence. (4) An application for agreement to the transfer of a licence must— (a) be made by the transferor with the consent of the transferee to the Commission in a form approved by the Commission; and (b) contain the information specified in the form. (5) The applicant must pay to the Commission an application fee fixed by the Minister of an amount that the Minister considers appropriate to meet the reasonable costs of determining the application. (6) The applicant must give the Commission further relevant information requested by the Commission. 30A—Consultation with consumer bodies The Commission may, before issuing a licence, agreeing to the transfer of a licence or determining or varying conditions of a licence, consult with and have regard to the advice of— (a) the Commissioner for Consumer Affairs; and (b) the consumer advisory committee under Part 2. 30B—Notice of licence decisions (1) The Commission must give an applicant for a licence, or for agreement to the transfer of a licence, written notice of the Commission's decision on the application. (2) The Commission must give the holder of a licence written notice of any decision by the Commission affecting the terms or conditions of the licence. 31—Surrender of licence (1) A gas entity may, by written notice given to the Commission, surrender its licence. (2) The notice must be given to the Commission at least six months before the surrender is to take effect or, if the licence requires a longer period of notice, as required by the licence. (3) The Commission may, by agreement with the gas entity, shorten the required period of notice. 32—Register of licences (1) The Commission must keep a register of the licences currently held by gas entities under this Act. (2) The register must include— (a) the terms and conditions of each licence; and (b) other information required under the regulations. (3) A person may, without payment of a fee, inspect the Register. 32A—Licence is not personal property for the purposes of Commonwealth Act A licence under this Part is not personal property for the purposes of the Personal Property Securities Act 2009 of the Commonwealth. Division 2—Price regulation 33—Price regulation by determination of Commission (1) The Commission may make a determination under the Essential Services Commission Act 2002 regulating prices, conditions relating to prices and price-fixing factors for— (a) the sale and supply of gas to small customers or customers of a prescribed class; (d) the sale and supply of gas by a gas entity to customers of another gas entity in accordance with a condition of the entity's licence imposed under Division 3B; (e) other goods and services in the gas supply industry specified by the Minister by notice in the Gazette. (2) Despite section 7 of the Essential Services Commission Act 2002, the Minister may, by notice published in the Gazette, direct the Commission about— (a) factors to be taken into account by the Commission in making a determination in addition to those that the Commission is required by the Essential Services Commission Act 2002 to take into account; and (b) the distributive effect as between classes of customers that a determination of a kind referred to in subsection (1)(a) may have; and (c) the period over which a determination of a kind referred to in subsection (1)(a) will allow cost recovery for costs incurred by gas entities in preparing for full competition in the gas supply industry. (3) The Minister may, by further notice in the Gazette, vary or revoke a notice published by the Minister under this section. (4) Despite the provisions of the Essential Services Commission Act 2002, the operation of a determination of a kind referred to in subsection (1)(a) is not to be stayed pending the determination of an application for review under Part 6 of that Act. (5) The Governor may, by proclamation, fix a day on which subsection (2) expires.