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Review of Queensland Energy Legislation Part 2: Options Paper a Consultation Paper Containing Detailed Regulatory Impact Statements October 2019

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Review of Queensland Energy Legislation Part 2: Options Paper a Consultation Paper Containing Detailed Regulatory Impact Statements October 2019 Review of Queensland Energy Legislation Part 2: Options paper A consultation paper containing detailed regulatory impact statements October 2019 This publication has been compiled by the Department of Natural Resources, Mines and Energy © State of Queensland, 2019 The Queensland Government supports and encourages the dissemination and exchange of its information. The copyright in this publication is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) licence. Under this licence you are free, without having to seek our permission, to use this publication in accordance with the licence terms. You must keep intact the copyright notice and attribute the State of Queensland as the source of the publication. Note: Some content in this publication may have different licence terms as indicated. For more information on this licence, visit https://creativecommons.org/licenses/by/4.0/. The information contained herein is subject to change without notice. The Queensland Government shall not be liable for technical or other errors or omissions contained herein. The reader/user accepts all risks and responsibility for losses, damages, costs and other consequences resulting directly or indirectly from using this information. Interpreter statement: The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding this document, you can contact us within Australia on 13QGOV (13 74 68) and we will arrange an interpreter to effectively communicate the report to you. Contents Introduction ............................................................................................................................................. 4 Section 1: Contextual information........................................................................................................... 5 Section 1.1 Background information on Queensland’s state laws ................................................. 5 Section 1.2 Summary of core issues ............................................................................................... 8 Section 1.3 Related state and national projects ........................................................................... 11 Section 1.4 Other issues .................................................................................................................... 14 Section 2: Detailed regulatory impact statements ................................................................................ 15 Section 2.1 Purpose of state energy laws (i.e. the Objectives of the Acts) .................................. 16 Section 2.2 Energy efficiency and demand management ............................................................ 25 Section 2.3 Interaction with applied national laws ...................................................................... 34 Section 2.4 Licensing .................................................................................................................... 57 Section 2.5 Powers of entry and resumption ............................................................................... 84 Section 2.6 Technical requirements ........................................................................................... 109 Section 2.7 Price control ............................................................................................................ 130 Section 2.8.1 Dispute resolution - Energy and Water Ombudsman fee options for complaints by embedded network customers ....................................................................................................... 148 Section 2.8.2 Dispute resolution - Energy and Water Ombudsman .......................................... 174 Section 2.8.3 Dispute resolution - Regulator ............................................................................. 196 Section 2.9 Customer protections .............................................................................................. 203 Section 2.10 Emergency powers .................................................................................................. 217 Section 2.11 Offences and enforcement ...................................................................................... 229 Section 3: Navigation tools .................................................................................................................. 251 Section 3.1 Summary of stakeholder consultation responses to Stage 1 Issues Paper .............. 251 Section 3.2 Acronyms and glossary ............................................................................................ 260 3 Introduction Introduction This document is Part 2 of the Energy Legislation Review Options Paper. It contains additional contextual information, detailed regulatory impact statements and navigation tools to help readers better understand the summarised options and recommendations put forward in Part 1. Section 1: Contextual information • Background information on Queensland’s state energy laws: Electricity Act 1994 (Electricity Act), Gas Supply Act 2003 (Gas Supply Act), Energy and Water Ombudsman Act 2006 (Energy and Water Ombudsman Act) and Liquid Fuel Supply Act 1984 (Liquid Fuel Supply Act). • A summary of the core issues identified in relation to Queensland’s state energy laws. • An explanation of how this Review relates to other state and national work programs. Section 2: Detailed Regulatory Impact Statements • 11 x detailed regulatory impact statements for consultation. These are technical documents that breakdown the relevant issue, explain in detail the options considered and the merits and impacts of each, and provide the comparative assessment performed to arrive at the recommended option. Section 3: Navigation tools • Summary of stakeholder consultation responses to the Stage 1: Issues Paper. • Acronyms and glossary list. 4 Section 1.1: Background information on Queensland’s state laws Section 1: Contextual information Section 1.1 Background information on Queensland’s state laws Electricity Act 1994 Twenty-five years ago, Queensland’s energy sector was run and regulated by the Queensland Electricity Commission. It was created solely for Queensland consumers and Queensland coal met 97 per cent of our energy demand. It was also predominantly regulated under state laws. The original structure of the Electricity Act reflected the then vision for the sector: • encouraging competition • responsive to growing environmental concerns • committed to retaining high safety, reliability and equity standards for an essential service. A significant element of the original Electricity Act was its licensing framework which for the first time formally divided the supply chain into four distinct parts: generation, distribution, transmission and retail.1 This was done to: • create fit-for-purpose regulation for each part, based on their individual characteristics. For example to recognise the natural monopoly characteristics of a transmission business required different regulation to a generation business that could operate in a competitive market • allow competition to grow in those parts where it was possible • align the structure of Queensland’s supply chain with other jurisdictions in the national electricity market. Beyond licences, the Electricity Act also included: • reserve powers for the Minister to set prices for electricity charged by electricity entities each year • powers for Governor in Council and the Minister to restrict, ration and take over operations to ensure electricity supply in emergency and other special situations • investigation powers and dispute resolution arrangements • safety provisions related to electrical accidents and articles • requirements for energy labelling and minimum energy performance standards. Gas Supply Act 2003 Before the Gas Supply Act, all aspects of the gas industry from production, storage, supply and safe handling of gases had been regulated by Queensland’s Gas Act 1965. 1 The licensing framework also created two further categories for all else that did not fall into the four main categories. These were ‘exemptions’ and ‘special approvals’. Exemptions did not require a licence (or authority), and a special approval was reserved for a unique or rare occurrence that required bespoke regulation. 5 Section 1.1: Background information on Queensland’s state laws In 2003, Queensland’s gas industry was preparing to enter a newly created national market and its supply chain needed to be defined in a way that aligned with the new national framework just as the electricity industry had done before it. 2 An overhaul was therefore undertaken of the gas legislation in place at that time. This resulted in two new Acts: the Gas Supply Act and the Petroleum and Gas (Production and Safety) Act 2004, with the latter retaining most of the powers.3 The Gas Supply Act was designed to mirror, where possible, the structure and effect of the Electricity Act. However, while the Electricity Act and the Gas Supply Act shared similar supply chain terminology and licensing frameworks, the reach of the Gas Supply Act was much smaller in that it focussed on a very discrete part of Queensland’s gas industry—LPG and natural processed gas distribution pipelines. As enacted, the Gas Supply Act was responsible for: • distribution and retail authorities4 • works and access rights and responsibilities for distribution pipelines • sufficiency of supply provisions for natural gas industry participants,
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