Mark Arbib (NSW, Australian Labor Party, Parliamentary Secretary for Government Service Delivery) Share this | Link to this | Hansard source

I table a replacement explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

AUSTRALIAN ENERGY MARKET AMENDMENT (AEMO AND OTHER MEASURES) BILL 2009

In recent years, a number of significant reforms have been made to energy markets in Australia. Under the guidance of the Ministerial Council on Energy, Australia has moved towards greater national consistency of governance and regulation. The reforms have aimed to ensure efficient infrastructure investment, promote competitive energy markets and provide lower energy prices for consumers.

The bill I am introducing today, although only making minor amendments to Commonwealth legislation, reflects another significant reform of the energy sector overseen by the Ministerial Council - the proposed commencement of a single national energy market operator for both the electricity and gas sectors. This operator, to be known as the Australian Energy Market Operator, or AEMO, is anticipated to commence operations on 1 July this year. Its commencement will strengthen the national character of energy market governance.

Upon its establishment, AEMO will assume the responsibilities and functions of existing gas and electricity market operators, including the National Electricity Market Management Company, NEMMCO. AEMO will also adopt a number of new functions such as the proposed National Transmission Planner function for electricity.

The bill provides for minor amendments to be made to Commonwealth legislation, namely the Renewable Energy (Electricity) Act 2000 and the Trade Practices Act 1974, as a consequence of AEMO’s assumption of NEMMCO’s functions.

The broader functions, powers and duties of AEMO will be primarily set out in legislation to be introduced into the South Australian Parliament, as lead legislator for the national energy market. These will be amendments to the National Electricity Law, a Schedule to the National Electricity (South Australia) Act 1998, and the National Gas Law, a Schedule to the National Gas (South Australia) Act 2008. These amendments are expected to be put to the South Australian Parliament in the first half of this year to facilitate the commencement of AEMO’s operations by 1 July. Other jurisdictions apart from Western Australia and the Northern Territory will also amend their legislation to effect the change.

The bill I am introducing today also corrects references in Commonwealth legislation to the title of Western Australian gas legislation. In 2008 a Bill to apply the National Gas Access Law, that is, key elements of the National Gas Law, was introduced into the Western Australian Parliament. However, the Parliament was prorogued before the bill was passed. It is now anticipated that the legislation applying the National Gas Access Law will commence in the first half of 2009. As a consequence of the delay the title of the Western Australian application legislation has also changed, requiring correction to references in the Australian Energy Market Act and other Commonwealth legislation. While the corrections are minor, they are important in facilitating the move by Western Australia to become a participating jurisdiction in the national framework for regulating access to gas pipeline services.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Before commencing some remarks on the Australian Energy Market Amendment (AEMO and Other Measures) Bill 2009, can I congratulate Senator Arbib on his appointment. I note that he is in the ministerial chair, taking through legislation on behalf of the government. It is a great honour to serve on the frontbench, especially in government. I simply congratulate him and wish him well in the new role—but, of course, not too much so. But, whilst he is there, may he enjoy it and be of great service to the Australian people.

The coalition supports the Australian Energy Market Amendment (AEMO and Other Measures) Bill 2009 and believes the changes being implemented by it are non-controversial. These minor changes to Commonwealth legislation, to both the Renewable Energy (Electricity) Act 2000 and the Trade Practices Act 1974, will allow for the establishment of a single national market operator for electricity and gas—the Australian Energy Market Operator. The bill also amends legislation to reflect a name change in Western Australian gas legislation. Whilst these may be minor changes to the legislation, they are an important reform for the energy sector. AEMO will assume the responsibilities and functions of existing gas and electricity market operators, including the National Electricity Market Management Co., NEMMCO. Mr Acting Deputy President, don’t you just love all these acronyms!

The Australian Energy Market Operator, or AEMO, is anticipated to commence operation on 1 July 2009, and the coalition’s support for this legislation, we trust, will facilitate this commencement. These reforms will ensure more efficient investment in energy infrastructure. They will continue the process of promoting competitive energy markets and enable the commencement of a single national energy market operator for both the electricity and gas sectors.

The development of this bill has been overseen by the Ministerial Council on Energy, which was created in 2001, and stems from the reforms to the energy sector made by the Howard government. AEMO will assume the responsibilities and functions of existing gas and electricity market operators, including NEMMCO.

Having indicated our support for the bill, I put on record the opposition’s concerns more generally as they have been stated by our coalition shadow minister, the Hon. Ian Macfarlane. AEMO is taking on the transmission planning functions of the energy market. If AEMO identifies a need that is not commercially viable for the private sector to invest in, how do we prevent the public sector—that is, the Rudd Labor government—taking ownership or investment in energy infrastructure?

First, it is not appropriate for the Commonwealth, or any government for that matter, to own energy infrastructure; and, second, will the Rudd government rule out using the Building Australia Fund for energy infrastructure? To the casual observer these concerns about the Rudd government taking public ownership of energy infrastructure may sound spurious, but the reality is that the Prime Minister and the Treasurer—now known as ‘Doom and Gloom’—have been throwing money around of late, with no regard for the quality of spend or the future risks. We do not want this to be repeated in the area of energy infrastructure and will be relying on the Minister for Resources and Energy to hold the Rudd cabinet to account on this—as the minister knows what is right and what is wrong, as we saw with him blowing the cover off Fuelwatch. In short, despite our broader concerns about the policies of the Rudd government, we do support this bill. On behalf of the coalition, I commend it to the Senate.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The Minister for Resources and Energy brought this bill to parliament with the support of colleagues from the Ministerial Council on Energy to continue our progress toward the creation of an efficient and effective national energy market. By passing the Australian Energy Market Amendment (AEMO and Other Measures) Bill 2009 the Senate will play an important role in facilitating the ministerial council’s cooperative approach to national energy reform. Lead legislation to be enacted in South Australia will see essential functions conferred on the Australian Energy Market Operator. The lead legislation will amend the national electricity law and the national gas law and will then be applied by all remaining jurisdictions, excluding the Northern Territory and Western Australia, through legislation known as the application acts.

AEMO will assume the functions carried out by the Gas Market Company in New South Wales, the National Electricity Market Management Company, the Victorian Energy Networks Corporation, the Gas Retail Market Operator in Queensland and the Retail Energy Market Company in South Australia. The AEMO legislation itself is currently the subject of a rigorous consultation process engaging all relevant stakeholders. The ministerial council’s AEMO Implementation Steering Committee has sought stakeholder comment and will be finalising the legislation in the near future, taking into account this input. The bill that the Senate is considering amends the Renewable Energy (Electricity) Act 2000 and the Trade Practices Act 1974 to replace references to the National Electricity Market Management Company Ltd with the Australian Energy Market Operator Ltd, AEMO. The bill also makes minor amendments to the Australian Energy Market Act 2004, the Administrative Decisions (Judicial Review) Act 1977 and the Trade Practices Act 1974 to ensure that those acts correctly reference Western Australian legislation which will apply to the Commonwealth’s offshore area, with Western Australia adopting elements of the national gas law.

In summary, passage of this bill, which makes minor technical amendments to Commonwealth legislation, will allow the smooth implementation of the cooperative energy reform agenda. This bill has the full support of our state and territory colleagues on the Ministerial Council on Energy and I commend it to the chamber.

Question agreed to.

Bill read a second time.