Electricity Supply Industry (Price Control) Regulations 1998

Electricity Supply Industry (Price Control) Regulations 1998

I, the Lieutenant-Governor in and over the State of Tasmania and its Dependencies in the Commonwealth of Australia, acting with the advice of the Executive Council, make the following regulations under the Electricity Supply Industry Act 1995 .

30 June 1998

W. J. E. COX

Lieutenant-Governor

By His Excellency's Command,

T. JOHN CLEARY

Minister for Energy

PART 1 - Preliminary

1.   Short title

These regulations may be cited as the Electricity Supply Industry (Price Control) Regulations 1998 .

2.   Commencement

These regulations take effect on 1 July 1998.

3.   Interpretation

In these regulations –

Act means the Electricity Supply Industry Act 1995 ;

amend means –

(a) omit any matter; or

(b) insert or add any matter; or

(c) omit any matter and substitute any other matter;

Associate Regulator means a person appointed as an Associate Regulator under regulation 24 ;

Cabinet record means a record which –

(a) is referred to in section 24(1) of the Freedom of Information Act 1991 ; and

(b) contains exempt information, within the meaning of that Act, to which that section applies;

contract includes agreement and arrangement;

contravene includes fail to comply with;

declaration of electrical service means a declaration made under regulation 5 ;

dividend includes a dividend within the meaning of the Government Business Enterprises Act 1995 ;

electrical service means –

(a) the provision of electricity; and

(b) the provision of any other good or service declared under regulation 5 to be an electrical service;

function includes duty;

Government Business Enterprise has the same meaning as in the Government Business Enterprises Act 1995 ;

ministerial charter has the same meaning as in the Government Business Enterprises Act 1995 ;

notice of pricing investigation means the notice given under regulation 11 ;

price includes charge and tariff;

price determination means a determination made under regulation 20(1) ;

pricing investigation means an investigation conducted under regulation 10(1) or (6) ;

pricing policies includes policies relating to the level or structure of prices for services;

provide includes the supply of electricity, where appropriate;

Tasmanian newspaper means a newspaper published and circulating generally in Tasmania.

4.   Maximum prices and price control mechanisms defined

Maximum prices and price control mechanisms may be expressed in one or more of the following terms:

(a) maximum prices or the maximum rate of increase or the minimum rate of decrease in maximum prices;

(b) average prices or average rates of increase or decrease in average prices;

(c) pricing policies or principles;

(d) by reference to a general price index, the cost of production, revenue, a rate of return on assets or any other factor;

(e) by reference to quantity, location or period of provision of the electrical service;

(f) by reference to an annual aggregate revenue requirement;

(g) any other terms the Regulator considers appropriate.

5.   Declaration of electrical service

(1)  The Regulator, by notice published in the Gazette, may declare a good or service provided by an electricity entity to be an electrical service if the Regulator is of the opinion that –

(a) the electricity entity has substantial market power in respect of that good or service; and

(b) the promotion of competition, efficiency or the public interest requires the making of the declaration.

(2)  Before making a declaration under subregulation (1) , the Regulator must –

(a) give written notice of his or her intention to make the declaration, and the reasons for making the declaration, to each electricity entity providing the good or service; and

(b) publish that notice in such daily Tasmanian newspapers as the Regulator considers appropriate; and

(c) allow the electricity entity and any other person to make written submissions to the Regulator with respect to the matter within such reasonable time as is specified in that notice.

6.   Amendment of declaration of electrical service

(1)  The Regulator, by notice published in the Gazette, may amend a declaration of electrical service.

(2)  Regulation 5(2) applies in respect of an amendment to a declaration of electrical service as if the amendment were such a declaration.

(3)  If a declaration of electrical service is amended, the amendment does not invalidate an investigation in respect of the good or service to which the declaration relates that is being conducted at the time of the amendment.

7.   Revocation of declaration of electrical service

(1)  The Regulator, by notice published in the Gazette, may revoke a declaration of electrical service at any time if the Regulator is of the opinion –

(a) that no electricity entity providing the electrical service has substantial market power in respect of the electrical service; or

(b) that the declaration is no longer required for the promotion of competition, efficiency or the public interest.

(2)  Regulation 5(2) applies in respect of a revocation of a declaration of electrical service as if the revocation were such a declaration.

(3)  The revocation of a declaration of electrical service takes effect –

(a) on the expiry of a price determination which –

(i) is made in respect of the electrical service which is the subject of that declaration; and

(ii) is in force at the time the Regulator revokes that declaration; or

(b) if no such pricing order is in force at the time the Regulator revokes that declaration, on the day specified in the notice revoking that declaration.

8.   Regulations bind Crown

These regulations bind the Crown in right of Tasmania and, so far as the legislative power of Parliament permits, in all its other capacities.

PART 2 - Investigations

9.   Power to investigate

The Regulator may conduct an investigation into the pricing policies of an electricity entity in respect of an electrical service.

10.   Requirement to investigate

(1)  Within a reasonable time after a declaration of electrical service is made in respect of a good or service provided by an electricity entity, the Regulator must conduct an investigation into the pricing policies of the electricity entity in respect of that electrical service.

(2)  Not later than 6 months before a price determination relating to an electrical service expires, the Regulator must invite submissions within the reasonable period specified in the invitation –

(a) on whether the declaration of that electrical service should be revoked; and

(b) stating the reasons for the revocation or non-revocation.

(3)  The invitation referred to in subregulation (2) is to be –

(a) in writing; and

(b) provided to the Minister; and

(c) provided to each electricity entity providing the electrical service; and

(d) published in such daily Tasmanian newspapers as the Regulator considers appropriate.

(4)  On the expiry of the period within which submissions may be made under the invitation referred to in subregulation (2) , the Regulator must determine whether to revoke or retain the declaration of electrical service.

(5)  If the Regulator determines to revoke the declaration of electrical service –

(a) he or she must do so; and

(b) regulation 7(2) does not apply in respect of the revocation.

(6)  If the Regulator determines to retain the declaration of electrical service, he or she must conduct, within a reasonable time, an investigation into the pricing policies of the electricity entity providing that electrical service.

11.   Notice of pricing investigation

(1)  Before conducting a pricing investigation, the Regulator must give notice of the investigation –

(a) in writing provided to the Minister and each electricity entity providing the electrical service which is the subject of the investigation; and

(b) in such daily Tasmanian newspapers as the Regulator considers appropriate.

(2)  A notice of pricing investigation must specify –

(a) the purpose of the pricing investigation and the electrical service to be investigated; and

(b) the day by which the Regulator must complete the pricing investigation; and

(c) the period within which, and the form in which, submissions may be made to the Regulator; and

(d) the matters that the Regulator would like submissions to address.

(3)  If the Regulator changes any of the matters referred to in subregulation (2) , the Regulator must give notice of that change –

(a) in writing provided to the Minister and each electricity entity providing the electrical service which is the subject of the investigation; and

(b) in such daily Tasmanian newspapers as the Regulator considers appropriate.

12.   Conduct of pricing investigation

(1)  The Regulator must conduct a pricing investigation in accordance with a notice of pricing investigation.

(2)  For the purposes of conducting a pricing investigation but subject to these regulations, the Regulator may do anything he or she considers necessary or convenient.

(3)  In conducting a pricing investigation, the Regulator must –

(a) hold hearings; and

(b) receive submissions in the form specified in the notice of pricing investigation.

(4)  Subject to these regulations, the Regulator may conduct a pricing investigation in the manner he or she considers appropriate and, in particular, may –

(a) consult with any person; and

(b) hold seminars; and

(c) conduct workshops; and

(d) determine whether any person wishing to appear before the Regulator may be represented by another person.

(5)  In conducting a pricing investigation, the Regulator is not bound by rules of evidence but may inform himself or herself of any matter in any manner he or she considers appropriate.

13.   Hearings

(1)  Before holding a hearing in respect of a pricing investigation, the Regulator must give reasonable notice of the hearing in such daily Tasmanian newspapers as the Regulator considers appropriate.

(2)  The notice of a hearing must specify –

(a) the purpose of the hearing; and

(b) the time and place at which the hearing is to be held.

(3)  A hearing is to be held in public.

(4)  Despite subregulation (3) , if the Regulator is satisfied that it would be in the public interest to do so or that evidence to be presented is, or is likely to be, of a confidential or commercially sensitive nature, the Regulator must –

(a) direct that a hearing or part of a hearing is to take place in private and give directions as to the persons who may be present; and

(b) give directions prohibiting or restricting the publication of evidence given or documents produced at the hearing.

(5)  A person must not contravene a direction given under subregulation (4) .

Penalty:  Fine not exceeding 100 penalty units.

(6)  The Freedom of Information Act 1991 does not apply in respect of –

(a) evidence and documents in respect of which a direction under subregulation (4)(b) has been made; and

(b) records of the giving or production of such evidence and documents.

14.   Requiring person to give evidence or provide document

(1)  For the purposes of a pricing investigation, the Regulator may require a person, by written notice provided to the person, to do any one or more of the following:

(a) attend before the Regulator and answer questions which, in the opinion of the Regulator, are relevant to the investigation;

(b) provide to the Regulator, in the manner specified in the notice, any document specified in the notice which is in the person's possession or control and which, in the opinion of the Regulator, is relevant to the investigation;

(c) provide to the Regulator, in the manner specified in the notice, a document prepared as specified in the notice that contains information which is specified in the notice and which, in the opinion of the Regulator, is relevant to the investigation;

(d) provide to the Regulator, in the manner specified in the notice, any other information specified in the notice which, in the opinion of the Regulator, is relevant to the investigation.

(2)  A person who attends before the Regulator under a requirement referred to in subregulation (1)(a) may, at the Regulator's discretion, be paid by the Regulator reasonable allowances and expenses as determined by the Regulator.

(3)  Despite subregulation (1) , the Regulator may not require a person –

(a) to answer a question, or provide a document or information, if to do so would require the person to divulge information contained in or relating to a Cabinet record; or

(b) to provide to the Regulator a Cabinet record.

15.   Use of documents and other information

(1)  The Regulator –

(a) may examine, take possession of, make copies of and take extracts from any document provided under a requirement referred to in regulation 14(1)(b) or (c) ; and

(b) may retain that document for so long as is necessary for the purposes of the pricing investigation; and

(c) must allow a person who would be entitled to inspect the document if it were not in the possession of the Regulator to inspect it, make a copy of it or take an extract from it at any reasonable time.

(2)  The Regulator may give directions prohibiting or restricting –

(a) the publication of any answer, document or other information provided to it under a requirement referred to in regulation 14(1) ; and

(b) a part of any such answer, document or other information; and

(c) a copy of, or extract from, any such answer, document, other information or part.

(3)  A person must not contravene a direction given under subregulation (2) .

Penalty:  Fine not exceeding 100 penalty units.

(4)  The Freedom of Information Act 1991 does not apply in respect of –

(a) any answer, document, other information or part of any answer, document or other information in respect of which a direction under subregulation (2) has been given; and

(b) records relating to the production of any such answer, document, other information or part.

(5)  The Regulator may publish to any person as the Regulator considers appropriate any answer, document or other information provided under a requirement referred to in regulation 14(1) , or part of any such answer, document or other information, except where –

(a) a direction in respect of the answer, document, other information or part has been given under subregulation (2) and its provision to that person would contravene the direction; or

(b) the answer, document, other information or part contains information which is exempt information under the Freedom of Information Act 1991 ; or

(c) the answer, document, other information or part is or contains information which could cause damage to the commercial interests of an electricity entity and the Regulator determines that such damage or the possibility of such damage outweighs the public benefit that would arise from its publication.

16.   Matters to be considered

In a pricing investigation, the Regulator must consider the following matters:

(a) the cost of providing the electrical service;

(b) any interstate or international benchmarks for prices, costs, revenues and return on assets in bodies providing a service similar to the electrical service;

(c) the need to protect consumers from the adverse effects of the exercise of substantial market power by an electricity entity in relation to prices, pricing control mechanisms, pricing policies and standards of service in respect of the provision of the electrical service;

(d) the degree of competition in the electricity supply industry that is relevant to the provision of the electrical service;

(e) the need for a reasonable return (including the payment of dividends) on the assets of an electricity entity;

(f) the need for efficiency in the provision of the electrical service for the purpose of benefiting the public interest through a reduction in the cost of providing the electrical service;

(g) the effects of inflation;

(h) the need for the electricity entity to be financially viable;

(i) the impact on pricing policies of any borrowing, capital, dividend and taxation or tax equivalent obligations of the electricity entity, including obligations to renew or increase assets;

(j) any ministerial charter that applies to the electricity entity;

(k) the quality of the provision of the electrical service;

(l) the Code;

(m) any costs (including capital expenditure) incurred by the electricity entity at the direction of the Regulator;

(n) the public interest;

(o) any other matter the Regulator considers relevant.

17.   Costs of investigations

(1)  An electricity entity that provides an electrical service which is the subject of a pricing investigation is liable to recompense the Regulator for the whole or part of the reasonable expenses incurred by the Regulator arising from the conduct and reporting of that investigation (including expenses incurred in making the draft and final report available to the public) as determined by the Regulator by written notice provided to the electricity entity.

(2)  In making a determination under subregulation (1) of the amount of the recompense an electricity entity is liable to pay to the Regulator in respect of the reasonable expenses incurred by the Regulator arising from the conduct and reporting of an investigation relating to an electrical service, the Regulator must fairly apportion the total of those reasonable expenses between all electricity entities involved with providing that electrical service.

(3)  The Regulator may recover in a court of competent jurisdiction as a debt due and owing an amount an electricity entity is liable to pay under subregulation (1) .

PART 3 - Action following investigation

18.   Draft report

(1)  At an appropriate time during a pricing investigation, the Regulator must prepare a draft report in respect of the investigation and must –

(a) provide a copy of the draft report to –

(i) the Minister; and

(ii) each electricity entity providing the electrical service which is the subject of the investigation; and

(b) make copies of the draft report, in both electronic and printed form, available to members of the public on payment of the reasonable fee, if any, determined by the Regulator.

(2)  The Regulator must –

(a) allow persons to make submissions to him or her in respect of the report; and

(b) consider any such submissions before making a final report.

19.   Final report

(1)  In accordance with the notice of pricing investigation, the Regulator must –

(a) prepare a final report in respect of the pricing investigation; and

(b) provide a copy of the final report to –

(i) the Minister; and

(ii) each electricity entity providing the electrical service which is the subject of the investigation; and

(c) publish in such daily Tasmanian newspapers as the Regulator considers appropriate notice that the report is available for purchase.

(2)  The final report must –

(a) be consistent with this Act; and

(b) report in relation to the appropriate maximum prices chargeable by, and the appropriate price control mechanisms to be imposed on, an electricity entity in respect of the electrical service which is the subject of the pricing investigation during the period specified in the report, being a period of not less than 3 years and not more than 5 years after the completion of the report.

(3)  As soon as practicable after the final report is completed, the Regulator must ensure that copies of it, in both electronic and printed form, are available to members of the public on payment of the reasonable fee, if any, determined by the Regulator.

20.   Price determination

(1)  After completing the final report, the Regulator must make a determination specifying the maximum prices which may be charged by, and the pricing control mechanisms imposed on, an electricity entity in respect of the electrical service during the period specified in the determination, being a period of not less than 3 years and not more than 5 years after the determination takes effect.

(2)  A price determination relating to an electrical service takes effect –

(a) if at the time the determination is made another price determination relating to that electrical service is not in force, on the day specified in the determination; or

(b) if at the time the determination is made another price determination relating to that electrical service is in force having not yet reached its expiry date, on the expiry or revocation of that other price determination; or

(c) if at the time the determination is made another price determination relating to that electrical service is in force by reason of subregulation (7) , on the day specified in that determination.

(3)  A price determination must specify the day on which it expires.

(4)  A price determination is not a statutory rule within the meaning of the Rules Publication Act 1953 .

(5)  A price determination ceases to have effect –

(a) if each declaration of electrical service in respect of all electrical services to which the determination applies has been revoked, on the day on which the last of those revocations takes effect; or

(b) if the determination is revoked, on the day that revocation takes effect; or

(c) if that determination is continued after the day it would normally expire by reason of subregulation (2) , on the day on which another price determination in respect of the electrical service to which that determination applies takes effect; or

(d) in any other case, on the day specified in the determination as the day on which it expires.

(6)  If a price determination relates to more than one electrical service and a declaration of electrical service in respect of any one of those electrical services is revoked, the price determination ceases to have effect in relation to the good or service in respect of which that declaration of electrical service was made.

(7)  If on the day on which a price determination is due to expire a pricing investigation is being conducted in respect of an electrical service to which that determination relates –

(a) the price determination continues to have effect in respect of that electrical service; but

(b) ceases to have effect in respect of any other electrical service to which it relates.

21.   Revocation or amendment of price determination

(1)  The Regulator may by determination revoke or amend a price determination if he or she has determined –

(a) that the determination was made on the basis of information that was false or misleading in a material particular; or

(b) that there is a material error in the determination; or

(c) that –

(i) an electricity entity to which the determination applies is materially adversely affected by the determination as a result of an event which is beyond the electricity entity's control and was not taken into account in the terms of the determination; and

(ii) the benefits of revoking or amending the determination would outweigh any detriment to the Tasmanian electricity supply industry that might result from the revocation or amendment of the determination.

(2)  Before revoking or amending a price determination, the Regulator must –

(a) invite submissions with respect to the matter within the reasonable period specified in the invitation; and

(b) consider any such submissions made to him or her.

(3)  The invitation referred to in subregulation (2) is to be –

(a) in writing; and

(b) provided to the Minister; and

(c) provided to each electricity entity providing the electrical service to which the price determination relates; and

(d) published in such daily Tasmanian newspapers as the Regulator considers appropriate.

(4)  Subject to these regulations, the Regulator may do anything he or she considers necessary or convenient for the purpose of determining whether to revoke or amend a price determination and, in this regard, regulation 12(3) and (4) and regulations 13 , 14 and 15 apply as if the Regulator were conducting a pricing investigation.

(5)  A determination revoking or amending a price determination –

(a) takes effect on the day specified in it; and

(b) is not a statutory rule within the meaning of the Rules Publication Act 1953 .

PART 4 - Miscellaneous

22.   Offences

(1)  A person must not –

(a) fail to comply with a requirement made under regulation 14(1) ; or

(b) provide to the Regulator oral or written information or a document that the person knows or believes to be false or misleading in a material particular without informing the Regulator of that knowledge or belief; or

(c) hinder, obstruct or interfere with the Regulator, an Associate Regulator or any other person in the performance and exercise of his or her functions and powers under these regulations; or

(d) take, or threaten to take, any action that detrimentally affects the employment of another person because that person has assisted, is assisting or intends to assist the Regulator in an investigation.

Penalty:  Fine not exceeding 100 penalty units.

(2)  Despite subregulation (1) , a natural person is not required to comply with a requirement made under regulation 14(1) if to do so would tend to incriminate him or her.

23.   Guidelines

The Regulator may publish guidelines relating to the performance and exercise of his or her functions and powers under these regulations.

24.   Associate Regulators

(1)  The Minister may appoint suitable persons as Associate Regulators to assist the Regulator in the performance and exercise of the Regulator's functions and powers under these regulations.

(2)  An Associate Regulator may, but need not, be an employee within the meaning of the Tasmanian State Service Act 1984 .

(3)  In the performance and exercise of his or her functions and powers, an Associate Regulator is subject to the direction and control of the Regulator.

(4)  An Associate Regulator may be appointed for a stated term or for an indefinite term that continues while the person holds a stated office or position.

(5)  An Associate Regulator holds office on the conditions stated in the instrument of appointment.

(6)  An Associate Regulator may resign by written notice given to the Regulator.

(7)  An Associate Regulator may be removed from office by the Minister.

25.   Service of documents

A document is effectively provided, served or given to a person under these regulations if –

(a) in the case of an individual, it is –

(i) given to the person; or

(ii) left at, or sent by post to, the person's postal, residential or business address or place of employment; or

(iii) sent by way of facsimile transmission to the facsimile number of the person; and

(b) in the case of a person that is not an individual, it is –

(i) left at, or sent by post to, the person's principal or registered office or principal place of business; or

(ii) sent by way of facsimile transmission to the facsimile number of the person.

26.   Transitional provisions

The transitional and savings provisions in Schedule 1 have effect.

SCHEDULE 1 - Transitional provisions

Regulation 26

1.   Interpretation

In this Schedule –

Commission means the Government Prices Oversight Commission;

Commissioner has the same meaning as in the Government Prices Oversight Act 1995 ;

Commission's investigation means the investigation commenced by the Commission into the pricing policies of the Hydro-Electric Corporation pursuant to the requirement to investigate;

requirement to investigate means the requirement to investigate the pricing of electricity in Tasmania dated 9 April 1998 provided to the Commission under the Government Prices Oversight Act 1995 ;

transferred notice of pricing investigation means the notice of pricing investigation referred to in clause 3(1) ;

transferred pricing investigation means the investigation commenced as the Commission's investigation and taken to be a pricing investigation because of clause 2 .

2.   Commission's investigation

(1) The Commission's investigation is taken to be a pricing investigation validly commenced under these regulations.

(2) All things done or omitted by, or in relation to, the Commission in respect of the Commission's investigation are taken to have been done or omitted by, or in relation to, the Regulator.

3.   Requirement to investigate

(1) The requirement to investigate is taken to be a notice of pricing investigation duly provided as required by regulation 11 to the Minister and each electricity entity providing the electrical service which is the subject of the Commission's investigation and published in daily Tasmanian newspapers.

(2) If an amendment is made before 1 July 1998 to the requirement to investigate –

(a) that amendment is taken to be a change to the transferred notice of pricing investigation; and

(b) where the Commission has complied with section 26(3) of the Government Prices Oversight Act 1995 in respect of that amendment, regulation 11(3) is taken to have been complied with in respect of that change to the transferred notice of pricing investigation; and

(c) where the Commission has not complied with that section in respect of that amendment, the Regulator must comply with regulation 11(3) .

(3) The Minister may change the transferred notice of pricing investigation but, despite regulation 11 , the Regulator may not change it.

4.   Declaration of service

(1) A good or service which is the subject of the Commission's investigation, other than the provision of electricity, is taken to have been declared under regulation 5 to be an electrical service.

(2) For the purposes of the transferred pricing investigation –

(a) the Minister, by notice published in the Gazette, may declare a good or service provided by an electricity entity to be an electrical service and that declaration is taken to have been made under regulation 5 ; and

(b) the Minister, by notice published in the Gazette, may amend a declaration of electrical service and that amendment is taken to have been made under regulation 6 .

5.   Contracts

A contract or agreement entered into by the Commission for the purposes of the Commission's investigation and not completed continues and is taken to have been entered into by the Regulator.

6.   Requirement to give evidence or provide document

A requirement made under section 29 of the Government Prices Oversight Act 1995 is taken to be a requirement made under regulation 14 .

7.   References to Commission, &c.

A reference in any document relating to the Commission's investigation to the Commission, the Commissioner or any person involved in conducting the investigation, however described, is taken to be a reference to the Regulator.

8.   Accounts and costs of investigation

(1) As soon as practicable, the Commission must prepare a full account of the expenses incurred in respect of the Commission's investigation.

(2) As soon as practicable, the Minister for Finance and the Minister for Energy must, in accordance with section 23 of the Government Prices Oversight Act 1995  –

(a) jointly determine by written notice the amount of the expenses referred to in subclause (1) for which the Hydro-Electric Corporation is liable to recompense the Commission; and

(b) provide that notice to the Commission and the Hydro-Electric Corporation.

(3) On receipt of the notice referred to in subclause (2) , the Commission must provide a copy of that notice to the Regulator.

(4) Section 23 of the Government Prices Oversight Act 1995 continues to apply in respect of the reasonable expenses incurred by the Commission arising from the conduct of the Commission's investigation, but the Regulator –

(a) is to recover on behalf of the Commission the amount for which the Hydro-Electric Corporation is liable to recompense the Commission; and

(b) after recovering that amount, pay it into the Consolidated Fund on behalf of the Commission.

9.   Order under Schedule 2 to the Electricity Companies Act 1997

An order made under clause 5 of Schedule 2 to the Electricity Companies Act 1997 specifying the maximum prices that may be charged in respect of, or in connection with, the supply of electricity is taken to be a price determination, and each good or service for which such a maximum price is specified in the order is taken, while that order has effect, to be an electrical service.

Displayed and numbered in accordance with the Rules Publication Act 1953.

Notified in the Gazette on 1 July 1998

These regulations are administered in the Office of Energy Planning and Conservation.

EXPLANATORY NOTE

(This note is not part of the regulation)

These regulations provide for –

(a) the investigation by the Regulator into the pricing policies of electricity entities in respect of electrical services; and

(b) the making by the Regulator of determinations setting the maximum prices chargeable by electricity entities in respect of electrical services; and

(c) related matters.