ELECTRICITY SUPPLY AMENDMENT (EMERGENCY MANAGEMENT) BILL 2017

2nd Reading Speech

14 November 2017


The Hon. ADAM SEARLE ( 15:25 ): I lead for the Opposition on the Electricity Supply Amendment (Emergency Management) Bill 2017. The Opposition does not oppose the legislation but has a query that I will refer to shortly. The legislation streamlines emergency management powers in the event of an electricity supply emergency in the State, in part to take account of the privatisation of the electricity distribution system embarked upon by the Government and the Parliament, but also in part in relation to advice from the Chief Scientist and Engineer and the Government’s Energy Security Taskforce and in part by the need from time to time to modernise the language in important legislation.

In particular, the bill amends part 6 of the Energy and Utilities Administration Act 1987 to remove electricity from that emergency framework without disturbing its operation in relation to gas or fuel emergencies. Instead, the bill creates a new emergency framework specifically for electricity to be located in the electricity supply legislation. Under the scheme provided for by the bill the Premier will be able to declare an electricity supply emergency by an order in writing if satisfied that the supply of electricity to all or any part of the State is significantly disrupted or that there is a real risk that electricity supply may be significantly disrupted. At present this power lies only with the Governor pursuant to section 24 of the Energy and Utilities Administration Act and, of course, the Governor exercises the power only upon the advice of the elected government of the day.

The bill replaces the current process of the Governor making emergency regulations with ministerial electricity supply emergency directions. At the moment under section 25 of the Energy and Utilities Administration Act the Governor has regulatory powers to make regulations controlling, directing, restricting or prohibiting the sale, supply, use or consumption of forms of energy subject to the proclamation. That duplicates the powers in section 27, which provide for ministerial directions presently in existence. This bill, as it were, combines those two streams of authority.

Interestingly, while the Governor’s regulations were, I believe, disallowable instruments able to be superintended by the Parliament or by each House, the ministerial electricity supply emergency directions both in the existing legislation and in the bill before the House will not be subject to any disallowance or parliamentary oversight. That may be a matter that requires further thought in due course, if necessary. While any declaration is in force the Minister will be able to give directions reasonably necessary to respond to the emergency, including restricting electricity use and shutting down plant and equipment.

The Minister’s powers are expressed in the bill in more streamlined, clearly directed and limited terms than the current legislation. Encapsulated in the current bill are examples of the circumstances in which the Minister would make such directions. A new provision in the legislation allows the Minister to require that information be provided in connection with an electricity emergency whether or not there is a declared emergency, including for the purposes of whether the supply of electricity has been or is likely to be disrupted and for preparing and planning responses to any future electricity supply emergency. Members will recall the Springvale mine incident.

Mr Jeremy Buckingham: How could we forget?

The Hon. ADAM SEARLE: I acknowledge that interjection. It involved the issue of the supply of coal to Mount Piper power station. There was controversy as to the amount of coal the power station had at its disposal. This was a matter of controversy in Land and Environment Court proceedings where evidence was to be given about that matter. The passage of legislation rendered those proceedings moot and I expect that evidence will not be given in that forum. During last week’s first hearing of the Select Committee on Electricity Supply, Demand and Prices in New South Wales, established by this House, evidence from the Australian Energy Market Operator raised issues about whether the national regulator had total and proper visibility of what was happening on the ground relating to fuel supply and other important matters relating to energy security. I assume that this part of the bill is directed to those considerations. The Opposition has no objection to that.

The legislation will empower authorised officers appointed by the Minister to enter premises and carry out investigations to determine whether a direction by the Minister has been complied with. This is perfectly reasonable and appropriate in the circumstances. As I indicated, electricity supply emergency directions can only be given while an order of the Premier is in force. The information gathering powers will apply irrespective of a declaration being in place. A direction that applies to the general public or a section of the community is required to be published in the Government Gazette. A direction that applies to a person can be given verbally if circumstances require it, but it must be confirmed in writing as soon as practicable. A copy of the notice must then be published in the Government Gazette.

Some examples of information that may be required include the location and availability of coal, gas, liquid fuel stocks and water storage reserves. An information notice does not depend on a Premier’s declaration being in place. This is to assist the energy Minister, whoever it may be from time to time, to obtain information for electricity emergency planning purposes. The Minister made mention in the second reading speech that the Minister’s power to issue directions cannot be delegated under the legislation. It is appropriate that it be exercised by the Minister, whoever it may be from time to time. The bill includes key offences for failure to comply with an electricity supply direction, failure to provide information required by the Minister and obstruction of an authorised officer. The penalty levels in the bill are set at an equivalent level to existing maximum limits in the Electricity Supply Act 1995.

One of the provisions removed from application to electricity is section 28 of the Energy and Utilities Administration Act 1987, which enables a member of the New South Wales Industrial Relations Commission to be appointed to investigate any industrial matter to do with the extraction, production, provision, supply, transportation or distribution of any form of energy or energy resources in relation to which a declaration has been made. That provision in the Energy and Utilities Administration Act will remain in force in relation to gas and fuel issues but will not apply to electricity and will not be transferred into this legislation. Opposition members believe it is prudent to retain this tool for use by the State in appropriate circumstances and will propose an amendment to this effect. It would be invoked in circumstances where the disruption to electricity supply arose from, had connection to or is in part related to, an industrial dispute of some kind.

I invite members to read two of my adjournment speeches relating to difficulties being occasioned by the protracted bargaining between the Electrical Trades Union and Essential Energy over an expired enterprise agreement. There were 18 months of rolling stoppages in that industry because the parties could not agree on an appropriate new industrial instrument. On two occasions I asked that the shareholder Ministers sensibly involve themselves to bring the matter to a timely and appropriate conclusion. They did not take up that suggestion and ultimately the matter was resolved without that dispute impinging on the distribution and supply of electricity. If it had gone on longer or occurred in different circumstances it may well have done so.

If there is a dispute that touches on or is driven by an industrial matters that tool can be used by the government of the day to diffuse that situation and to carry into effect any recommendations made by the inquirer, if appropriate and necessary, to secure energy supply in the future. This may or may not have been an oversight in the drafting. However, the Opposition believes it should be retained in the legislation and should not be removed without proper debate on that subject. We urge the Government and other members to embrace the sensible and balanced amendment that we will be proposing.

My final point relates to emergency management. Emergencies, by definition, are sudden and hopefully of short duration. There is no time limit in the proclamation or declaration able to be given by the Premier of the day. That is probably a mistake. I do not want the government of the day to be deprived of the tools it needs to deal with an emergency. If a declaration has to be renewed periodically, in an extreme case a time limit should be placed on the duration of such a declaration, even if it is rolled over or it is made again. Even if only a formal restraint is created because it is a Governor’s proclamation on the advice of executive council and that restraint is to be removed and the decision is to be made by the administrative head of executive government, that restraint is not even there. In these circumstances some time limit is warranted as long as a proclamation can be continued where necessary. As I indicated at the outset, the Opposition does not oppose the bill.