The Commonwealth Parliament is the first jurisdiction to enact legislation that will validate work undertaken by the Australian Energy Regulator ahead of the commencement of the National Energy Customer Framework (insofar as it is performed under Commonwealth law).

Equivalent provisions will be required to be included in the bills to be introduced by the remaining participating jurisdictions, expected in due course. 

Background

The National Energy Customer Framework (NECF) requires the Australian Energy Regulator (AER) to publish guidelines, procedures and statements of approach relating to the performance of its functions and the exercise of its powers within that framework.  Over the past 18 months, the AER has worked with stakeholders to develop these documents prior to commencement of the NECF.

However, the legislative provisions that empower the AER to undertake these activities are not yet in force.  Accordingly, appropriate transitional provisions are required in each participating jurisdiction to ensure the instruments and decisions are valid under the National Energy Retail Law and take effect when the Law commences.

The Commonwealth Parliament is the first jurisdiction to introduce the necessary transitional provisions, with the Australian Energy Market Amendment (National Energy Retail Law) Act 2011 (Act) receiving the Royal Assent on 14 October 2011.  By amending the Australian Energy Market 2005 (Cth), the Act will validate and give effect to instruments or decisions made by the AER for the purpose of the NECF once the NECF applies as a law of the Commonwealth. 

The Act also deems the AER to have complied with any requirement to take a preparatory step that would have existed had the NECF applied as a law of the Commonwealth (e.g. public consultation), if that step was undertaken at a prior time.  Equivalent provisions also apply in relation to instruments or decisions made, and preparatory steps taken, under the NECF-related amendments to the National Electricity Law and National Gas Law.

The Act makes other amendments necessary to support the NECF's commencement.  It:

  • applies the National Energy Retail Law (and associated Rules and Regulations) in Australia's offshore area , therefore acting as the Commonwealth's NECF "application Act";
  • provides for functions and powers to be conferred on the AER, the Australian Energy Market Commission, Australian Competition Tribunal (Tribunal) and Commonwealth Minister under Commonwealth law, including through amendments to the Competition and Consumer Act 2010 (Cth) (CCA);
  • amends the Administrative Decisions (Judicial Review) Act 1977 (Cth) to ensure that decisions by Commonwealth bodies (e.g. the AER and Tribunal) under the National Energy Retail Law as it applies in States and Territories, are subject to judicial review.  

The Act delays the commencement of the amendments until such time as the National Energy Retail Law commences in a participating State or Territory.  The target date for uniform commencement of the NECF remains 1 July 2012.