The Regulation relies on several defined terms and distinct legal categories.

Protected contract: A contract listed in clause 6(1) which is immune from the liability regime change that otherwise applies. The four protected contracts are: the Capral Aluminium Smelter Contract (Delta Electricity with Capral Aluminium), the BHP Port Kembla Slab and Plate Products Contract (Delta Electricity with BHP Steel), the BHP Newcastle Rod and Bar Products Contract (Delta Electricity with BHP), and the Tomago Aluminium Smelter Contract (Macquarie Generation with Tomago Aluminium Company). Each contract is identified by the original agreements dating back to the 1950s through 1990s, plus variations agreed before the appointed day, plus post-appointed-day variations that are the subject of a Treasurer’s certificate. The definition is narrow and exhaustive: no other contract qualifies. A protected contract ceases to be protected if it is varied without the requisite Treasurer’s certificate, with the cessation date depending on the type of variation (extension, specified effective date, or date of agreement).

Treasurer’s certificate: Under clause 7, the Treasurer may issue a certificate for any proposed variation to a protected contract. However, the Treasurer must not issue a certificate if of the opinion that the variation extends the contract period or substantially affects the operation of, or rights and liabilities under, the contract. This gives the Treasurer discretionary veto power over major changes to these contracts, effectively freezing their core terms as at the appointed day unless the Treasurer agrees. The certificate mechanism is the sole device for preserving protected status post-transition.

1995 Act and 1997 Act: The Regulation sits between these two New South Wales statutes. The 1995 Act (Electricity Supply Act 1995) governed the state wholesale market. The 1997 Act (National Electricity (New South Wales) Act 1997) applied the National Electricity Law and amendments that replaced the state market. Schedule 2 to the 1997 Act contains general savings and transitional provisions, which this Regulation overrides in specific respects.

Appointed day: 13 December 1998. Until 1:00am NSW summer time on that day, the 1995 Act continues as if the 1997 Act had not been enacted, and the National Electricity Law and amendments have no effect (clause 12). This creates a staggered commencement: the national market begins at the specified time, but the old law runs up to that moment.

Rules, procedures and conditions of wholesale market operation: These were in force under section 78 of the 1995 Act. Clause 9 preserves their previous operation, rights, and obligations even after repeal or expiry. Clause 8 continues the powers of the Market and System Operator to impose management fees under the old section 79. Clause 8(3) extends the scope of those fees to include functions exercised under clause 2A of Schedule 2 to the 1997 Act (winding up of funds) and under the continued rules.

IPART determinations: Clause 13 lists specific determinations that continue to have effect beyond the transition date, overriding any contrary provision in the determinations themselves. The end dates are 31 January 2000 for most, and 30 June 2000 for determination No 10 of 1996 (as modified). The IPART can shorten that period by Gazette notice for the latter group.

The Regulation directly affects five categories of parties.

Electricity generators: Specifically Pacific Power and the corporations that succeeded it under the Energy Services Corporations Act 1995 (such as Delta Electricity and Macquarie Generation). For any contract for the supply of electricity entered into before 13 December 1998 that is not a protected contract, the liability limitation regime changes: section 78 of the National Electricity (NSW) Law applies, and section 83 of the Electricity (Pacific Power) Act 1950 does not apply (clause 5(2)). This potentially exposes generators to higher liability caps or different legal standards for contracts they wrote under the old regime. For protected contracts, the old clause 2 of Schedule 2 to the 1997 Act (which would have applied the national market provisions) does not apply, so their contractual liability limitations are preserved.

Large industrial electricity customers: Capral Aluminium, BHP Steel (AIS) Pty Ltd, The Broken Hill Proprietary Company Limited, and Tomago Aluminium Company Pty Ltd. These entities are counterparties to the four named protected contracts. They benefit from the preservation of the original liability terms in those contracts. However, they face the risk that any post-appointed-day variation without a Treasurer’s certificate will cause the contract to lose protected status, potentially triggering a liability regime change. The Treasurer’s certificate condition gives the government indirect control over the evolution of these long-term supply arrangements.

Market and System Operator: The person who was the Market and System Operator under the 1995 Act continues in that role for winding up purposes (clause 8(2)(b)). They can continue charging management fees under the old section 79, including for winding up functions under the 1997 Act and for continued market rules. They can recover those fees under section 103 of the 1995 Act as if they were a monetary penalty.

NEMMCO and TransGrid: The modified IPART determination substitutes NEMMCO for the old market operator in the formula for regulating TransGrid’s gross margins (clause 11). TransGrid’s fees for market operations and ancillary services are thus governed by a different regulatory reference post-appointed day.

IPART: The Tribunal’s determinations are given extended force by clause 13, but it retains the power to cease determinations by Gazette notice for the group expiring 30 June 2000.

Treasurer: Clause 7 confers a discretionary power to issue certificates for variations to protected contracts. This administrative role imposes on the Treasurer an obligation not to issue certificates if the variation extends the term or substantially affects rights.

Electricity supply authorities: Clause 14 prescribes 31 January 2000 in place of 30 June 1999 for the purposes of clause 1(2) and (3) of Schedule 2 to the 1997 Act, affecting the transition of certain liabilities.

Consumers and market participants generally: While not named directly, the continuation of IPART determinations affects prices for monopoly services and network charges. The winding up provisions affect settlement and fund management.

The Regulation creates specific duties and rights that would not otherwise exist under the general savings provisions of the 1997 Act.

Rights of generators under non-protected contracts: Clause 5(2) gives the right to have section 78 of the National Electricity (NSW) Law apply to those contracts, and the right not to have section 83 of the Electricity (Pacific Power) Act 1950 apply. This is a liability framework change. The corollary duty is that section 83 no longer provides its former limitation. The generator cannot rely on the old cap.

Rights of parties to protected contracts: The Regulation preserves the old liability regime for these four contracts. The parties have the right to have the contract governed by the pre-transition legal framework, unless a variation triggers loss of protected status. The duty falls on the parties to obtain a Treasurer’s certificate for any post-appointed-day variation if they wish to maintain protection. This is a significant compliance burden: the variation must be assessed against the Treasurer’s opinion test.

Treasurer’s duty: Under clause 7(2), the Treasurer must not issue a certificate if of the opinion that the variation extends the term or substantially affects the operation or rights/liabilities. This is a negative duty; the Treasurer has no duty to issue certificates at all. The exercise of discretion is not guided by criteria other than those two prohibitions. There is no appeal mechanism from a refusal (unlike the appeal rights preserved under clause 8(2)(f) for certain Ministerial decisions under the 1995 Act).

Market and System Operator’s rights: The Operator continues to have the powers under section 79 of the 1995 Act to impose management fees, and can recover them under section 103 as if they were a monetary penalty (clause 10). This provides a strong enforcement mechanism: the penalty recovery procedure may include interest, court orders, or other enforcement devices that would not be available for a simple debt.

Rights of the Minister: The Minister continues to exercise powers under Schedule 1 to the 1995 Act for contraventions of the Act, regulations, or authorisation conditions (clause 8(2)(e)). The right of appeal against such decisions under section 95 of the 1995 Act also continues (clause 8(2)(f)).

Rights of persons under repealed rules: Clause 9 preserves any right, privilege, obligation or liability acquired, accrued or incurred under the rules, procedures and conditions of wholesale market operation, even after their repeal or expiry. This ensures that past transactions are not upset.

Rights of IPART determination beneficiaries: Parties subject to the listed IPART determinations have the right to rely on their continued effect until the end dates in clause 13, but also the duty to comply with their terms. The IPART has the right to cease determinations by notice for the second group.

The Regulation does not create new penalties but extends existing enforcement mechanisms from the 1995 Act into the transitional period.

Recovery of management fees: Clause 10 is the most explicit enforcement provision. It applies section 103 of the 1995 Act to the recovery of management fees imposed under section 79 of that Act, whether before or after 13 December 1998. Section 103 allows recovery by the Minister of a monetary penalty under that Act. By using this provision, the Market and System Operator (or a person acting for it) can use the same enforcement machinery as a statutory monetary penalty, which likely includes summary court proceedings, interest, and costs. This is a stronger position than simply suing for debt under contract, because the penalty recovery may have a lower evidentiary burden or different limitation periods.

Ministerial enforcement powers: Under clause 8(2)(e), the Minister continues to exercise powers under Schedule 1 to the 1995 Act in connection with contraventions of that Act, the regulations under it, or conditions of authorisations still in force. Schedule 1 likely includes powers to issue directions, suspend authorities, or impose penalties for non-compliance. The exact nature of those powers is not detailed in this Regulation, but they are preserved by reference. The right of appeal against such decisions continues under clause 8(2)(f), so there is a check on Ministerial action.

Authorisations remain in force: Clause 8(2)(a) provides that any authorisation under the 1995 Act remains in force subject to the same conditions, and despite any condition that purports to terminate it as a consequence of the national market commencement. This prevents parties from escaping regulatory conditions through automatic sunset clauses triggered by the transition. Non-compliance with those conditions continues to expose the authorisation holder to the Minister’s enforcement powers under Schedule 1.

Loss of protected status as penalty: Clause 6(2) operates as a de facto penalty for varying a protected contract without a Treasurer’s certificate. The contract ceases to be protected on a specified date, meaning the liability limitation preservation under clause 5 no longer applies. For the generator, this could mean exposure to higher liability claims. The loss is automatic; no Ministerial or court decision is needed. This creates a strong incentive to obtain a certificate for any variation, even if the variation is minor, because the consequence is total loss of protected status.

No criminal penalties: The Regulation contains no offence provisions. It is a savings and transitional instrument, not a penal code. Enforcement is administrative and civil, leveraging existing statutory mechanisms.

The Regulation functions as an overlay on the National Electricity (New South Wales) Act 1997, modifying that Act’s general savings and transitional provisions for specific purposes.

Schedule 2 to the 1997 Act: This is the primary interaction. Clause 5(2) of the Regulation expressly “despite clause 2 of Schedule 2 to the 1997 Act” applies section 78 of the National Electricity (NSW) Law instead of section 83 of the Electricity (Pacific Power) Act 1950 for non-protected contracts. Clause 8(1) continues the unamended 1995 Act provisions that were amended or repealed by the 1997 Act, but only for winding up matters. Clause 8(3) extends management fee powers to functions under clause 2A of Schedule 2 (winding up funds). Clause 14 prescribes a different date (31 Jan 2000) for clause 1(2) and (3) of Schedule 2, overriding the original 30 June 1999 reference. The Regulation thus partially displaces the 1997 Act’s own transitional provisions.

Electricity Supply Act 1995: The Regulation keeps parts of this Act alive after its amendment/repeal. Section 78 (market rules), section 79 (management fees), section 103 (recovery), provisions relating to authorisations, and appeals under section 95 all continue for limited purposes. The 1995 Act’s regime remains operative for winding up, but only as specifically preserved.

Electricity (Pacific Power) Act 1950: Clause 5(2)(b) disapplies section 83 of this Act for non-protected generator contracts. Section 83 presumably provided a limitation of liability for Pacific Power or its successors. The removal of this limitation for those contracts changes the legal risk allocation.

Energy Services Corporations Act 1995: The definition of “electricity generator” in clause 5 references that Act, incorporating its definitions for who is affected by the liability transition. The interaction is cross-referential.

National Electricity (NSW) Law: Section 78 of that Law is applied to non-protected contracts by clause 5(2)(a). This is the liability provision from the national market legal framework. Clause 12 delays the Law’s application until 1:00am on the appointed day.

National Electricity Code: Referenced in clause 11 as the document NEMMCO regulates under, replacing the old market operator in the IPART formula.

IPART Act and Determinations: The Regulation directly modifies one determination (No 5.3 of 1997 via clause 11) and preserves others for fixed periods (clause 13). This overrides any sunset or expiry in the determinations themselves. The IPART retains power to cease the second group of determinations early, but only by Gazette notice.

Other Acts amended by the 1997 Act: Clause 12(b) provides that the amendments made by the 1997 Act do not have effect until 1:00am on the appointed day, so all affected Acts continue as before until that time.

The Regulation as provided includes two amendment events noted in the enacted text. Clause 13 was inserted on 30 June 1999, approximately six months after the Regulation’s commencement. The same amendment also added clause 14 on the same date. Clause 13 was further amended on 28 January 2000. The text shows that clause 13(1)(b) was repealed at some point, but the record does not specify when. The version provided appears to be current as at the date of the user’s request, as it includes the 28 January 2000 amendment. No other amendments are evident from the text. The Regulation itself has no sunset date in its body, but clause 8(5) provides an internal termination mechanism: Part 3 ceases to have effect when the Minister Gazette notices that the three funds have been wound up. Parts 2 and 4 are not explicitly sunset. The IPART determination continuation in clause 13 expired by its own terms on 31 January 2000 and 30 June 2000 respectively, though some provisions may have been extended further by later instruments not shown. The amendment history indicates the Regulation was a living instrument during the early years of the national market, requiring adjustments as the winding up progressed.

The source text does not cite any court cases. However, a Regulation of this type is likely to have been considered in litigation concerning the transition from the NSW wholesale market to the national market, particularly in disputes over liability caps, management fee recovery, or the status of protected contracts. The absence of case references in the Regulation itself is not surprising: it is a statutory instrument, not a judgment. Practitioners should be aware that the interpretation of clauses 5 and 6 (protected contracts and liability preservation) may have been litigated in proceedings involving generators Delta Electricity or Macquarie Generation, or counterparties BHP and Tomago. The Treasurer’s certificate mechanism could have been the subject of judicial review if a certificate was refused or if a party challenged the Treasurer’s opinion. Any such litigation would appear in the case law for the National Electricity (NSW) Act 1997 or related energy law. The Regulation’s provisions on the continuation of IPART determinations may have been tested in pricing disputes before the Australian Competition Tribunal or courts. Because the Regulation is now over 25 years old and its operative provisions are spent or time expired, contemporary litigation is unlikely. However, historical disputes about liability arising from pre-1998 contracts could still surface if limitation periods were extended or if claims were preserved by the savings provisions.

Several provisions in this Regulation create traps for the unwary.

First, the loss of protected contract status under clause 6(2) is automatic and can occur without a court order. If a party agrees to a variation that the Treasurer later declines to certificate, the contract ceases to be protected from a date that may be earlier than the refusal. For variations that extend the term, the cessation occurs when the original term would have ended, potentially years after the variation. The party may have been operating under a false assumption of continued protection for a long period. There is no grace period or cure mechanism.

Second, the Treasurer’s certificate power under clause 7 is entirely discretionary except for two negative conditions (no certificate if extension or substantial effect). The Treasurer could refuse a certificate for any other reason. There is no right of hearing or appeal. This gives the government indirect control over the commercial evolution of four long-term contracts.

Third, clause 8(2)(a)(ii) provides that authorisations remain in force despite any condition that purports to terminate them as a consequence of the national market commencement. This overrides party autonomy: contractual or authorisation conditions that were intended to provide an exit on market transition are voided. A generator that negotiated a termination right tied to the market change may find itself still bound.

Fourth, the management fee recovery power under clause 10 uses the penalty recovery mechanism of section 103 of the 1995 Act. A person disputing a management fee could find themselves treated as a penalty defaulter, possibly with additional costs or different limitation periods, if they simply refused to pay. The line between fee and penalty is blurred.

Fifth, the interaction between clause 5 and clause 6 is critical: clause 5(2) overrides clause 2 of Schedule 2 to the 1997 Act for non-protected contracts, but clause 5(3) preserves that clause for protected contracts. The effect is that protected contracts remain governed by the 1997 Act’s general transitional provisions, while non-protected contracts get a different liability regime under the National Electricity (NSW) Law. This is the opposite of what one might assume: protection means retaining the old 1997 Act provision, not adopting the National Electricity Law.

Sixth, clause 13(3) allows IPART to cease the determinations listed in subclause (2) (which run to 30 June 2000) by Gazette notice at any time. Entities relying on those determinations for revenue or cost forecasts faced regulatory uncertainty. There is no minimum notice period.

Seventh, the appointed day definition and clause 12 create a precise time window: until 1:00am summer time on 13 December 1998, the old law applies. Transactions or events after that second but on the same calendar day are under the new regime. The distinction between before and after that specific minute could be crucial for liability or contract formation.

Eighth, the Regulation’s cessation mechanism in clause 8(5) is triggered by a Ministerial Gazette notice. There is no automatic end date for Part 3. Practitioners must monitor the Gazette for notice of winding up of the three funds.

Compliance obligations under this Regulation are largely historical and time limited, but for legacy contract management the following steps are relevant.

Identify whether your contract is a protected contract under clause 6(1). Only the four named contracts qualify by specific dates and counterparties. If you are a party to one of these contracts, verify that you hold copies of the original agreements, pre-appointed-day variations (including the 1998 supplementary agreement for the BHP contracts), and any Treasurer’s certificates for post-appointed-day variations. Maintain a register of variations and certificate status.

For any proposed variation to a protected contract, assess whether the variation extends the term or substantially affects operation or rights/liabilities. If it does, a Treasurer’s certificate cannot be issued (clause 7(2)). If the variation does not fall into those categories, apply to the Treasurer for a certificate before agreeing to the variation. The application should be made in writing and should include a clear statement that the variation does not extend the term or substantially affect rights. If no certificate is obtained, the contract loses protected status on one of the dates specified in clause 6(2), depending on the type of variation. Even if the variation is minor, the risk of loss of protection is absolute, so legal advice should be obtained before proceeding.

If you are a generator with a pre-1998 supply contract that is not one of the four named, clause 5(2) changes the applicable liability regime. Section 78 of the National Electricity (NSW) Law applies, and section 83 of the Electricity (Pacific Power) Act 1950 does not. You should review your contract for liability caps and ensure they conform to the new regime. The old limitation may no longer be effective as a defence.

For parties dealing with the Market and System Operator for management fees, note that the recovery mechanism under clause 10 is stronger than ordinary debt recovery. Pay disputed fees under protest and seek review or appeal if available.

If you are subject to an IPART determination listed in clause 13, note the extended end dates. For determinations in subclause (1), they run to 31 January 2000; for subclause (2), to 30 June 2000. Monitor the Gazette for possible early cessation by IPART under subclause (3).

For historical compliance, no ongoing action is required for most entities now, as the operative provisions are spent. However, if a dispute arises from the transition period, consult the Regulation and the corresponding provisions of the 1995 Act and 1997 Act as they were in force on the relevant dates. Retain all certificates, variations, and correspondence with the Treasurer.